United States of America v. Timothy Lee Nipper, et al.

Tulsa, Oklahoma defendant represented himself pro se tax collection matter.





This is a civil action in which the United States seeks to reduce to judgment certain outstanding tax assessments against Timothy Lee Nipper for tax years 1981-1988, to set aside allegedly fraudulent conveyances of real property, and to foreclose federal tax liens against certain real property. [Doc. No. 1]. To obtain evidence to support its claims, the United States served discovery requests (i.e., interrogatories, requests for admission, and requests for production) on Mr. Nipper personally. These requests sought information about Mr. Nipper's tax returns, sources of income, bank accounts and statements, and payments and gifts made to others.





In response to the United States' discovery requests, Mr. Nipper asserted a Fifth Amendment privilege and refused to provide any information. The United States has moved to compel Mr. Nipper's responses over his Fifth Amendment objections, arguing that Mr. Nipper cannot assert a Fifth Amendment privilege because he has no reasonable fear of prosecution given that the statute of limitations for tax years 1981-1988 has run. The Court does not agree, and finds that Mr. Nipper has demonstrated a reasonable fear of prosecution for wilful tax evasion.





To validly assert a Fifth Amendment privilege against self-incrimination, Mr. Nipper must demonstrate that he is confronted with a substantial and real, and not merely a trifling, remote or imaginary risk of incrimination.1 Mr. Nipper argues that he has a substantial and real fear that he could be prosecuted today for wilfully



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evading paying taxes for tax years 1981-1988. The Supreme Court has defined the crime of income tax evasion under 26 U.S.C. § 7201 as: (1) failure to pay the tax, (2) an affirmative act of evasion, and (3) willfulness.2



The statute of limitations for tax evasion under § 7201 is six years. See 26 U.S.C. § 6531. The Supreme Court has held that this statute of limitations does not begin to run until the underlying crime has been committed. United States v. Habig, 390 U.S. 222, 225, 88 S.Ct. 926, 19 L.Ed.2d 1055 (1968). Thus, one can be guilty of evading taxes due more than six years prior as long as one or more affirmative acts of evasion is committed within the past six years. "[I]t is the date of the latest act of evasion, not the due date of the taxes, that triggers the statute of limitations." United States v. Ferris, 807 F.2d 269, 271 (1st Cir.1986).3 Mr. Nipper argues that he has a substantial and real fear that he could still be prosecuted for evading to pay his taxes for tax years 1981-1988 given that the government need only demonstrate that at some point in the last six years he took some affirmative act of evasion in connection with his 1981-1988 income or tax liability.





To assert his Fifth Amendment right, Mr. Nipper is not "required to prove the hazard [of incrimination] in the sense in which a claim is usually required to be established in court . . . ." Hoffman v. United States, 341 U.S. 479, 486, 71 S.Ct. 814, 95 L.Ed. 1118 (1951). Exercise of the privilege against self-incrimination also does not depend upon a judge's prediction of the likelihood of prosecution. Resnover



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v. Pearson, 965 F.2d 1453, 1462 (7th Cir. 1992). "[C]ourts should not engage in raw speculation as to whether the government will actually prosecute." United States v. Sharp, 920 F.2d 1167, 1171 (4th Cir.1990). That prosecution is possible is enough absent clear evidence of an absolute bar to prosecution. Id. "[I]t is only when there is but a fanciful possibility of prosecution that a claim of Fifth Amendment privilege is not well taken." In re Folding Carton Antitrust Litigation, 609 F.2d 867, 871 (7th Cir.1979). Mr. Nipper has shown more than just a fanciful possibility of prosecution in this case, especially given the fact that the United States has already alleged in its complaint against Mr. Nipper that Mr. Nipper engages in fraudulent conveyances of property to conceal his income and assets. The government could certainly attempt to argue in an evasion prosecution that any such similar conveyance in the last six years constituted a continuing act of evasion.





The privilege should be made in response to individual questions based upon a reasonable belief that a response would pose a substantial and real hazard of criminal liability. United States v. Clark, 847 F.2d 1467, 1474 (10th Cir. 1988). In this case, however, Mr. Nipper has not made a blanket assertion of the privilege. Rather, in response to individual questions posed in discovery requests, he has asserted his Fifth Amendment privilege. In fact, in response to the United States' first set of interrogatories, Mr. Nipper did answer some questions, and interposed his Fifth Amendment privilege as to others.

Mr. Nipper has validly asserted his Fifth Amendment right in connection with the discovery served on him by the United States. Absent immunity, the United States will have to obtain evidence to establish its claims against Mr. Nipper from sources other than Mr. Nipper himself.



The Government's motion to compel was denied.