Untitled Texas Attorney General Opinion

THEAITORNEYGENERAL OF TEXAS Honorable John H. Winters Executive"Dlrector State Department of Public Welfare Austin 3, Texas Dear Sir: Opinion No. O-6894 Re: The Department of Public Welfare should not permit an official of the Treasury Department to in- '_ spect and make photostatlccoples of certain records relating to old age assistance recipient, whose son is beinglnvestigated for income tax liability. .-."Yourrecent letter addressed to this office states'that the Treasury Department, Internal Revenue Service,'has requested the-Department of Public Welfare to permit an officlal~of'the Treasury Department to inspect and makephotostatic copXes of bertxnent bapers contained in your records relating to an old ageassistance recipient whose son hisbeing 1nvestlgated~'fo'r income tax liabilfty. You desire this departments opinron as to'whether~or not the information requested by t'heInternally Revenue Se'.rvice of the Treasury Department should be~disclosed to the Treasury Department, based either upon an informal re- quest oi?in'the court, should the Treasury Department Issue a subpoena duces tecum. . The Social Security Act, (Title 42, U.S.C.A. par 302) provides: "(a) A State plan for old-age assistance must . . . (8) effective July 1, 1941, provide safeguards which restrict the use"'ordisclosure of Informantion concerning applicants and recipients to purpose dl- Pectly'connected with the administration of old-age assistance." Pursuant to this ~mandatory provision of the Federal statute our statutes (Vernon's Annotated Civil Statutes, Art. 695c, Sec. 23) provides as follows: "Sec. 33. (1) It shall be unlawful, except for purposes directly connected with the administration Honorable John H. Winters, page 2 0 -6894 of general assistance, old age assistance; aid to the blind, or aid to dependent children, and in accoraance with . .the^ rules and regulations of,the . State Deparcmenc, I-orany person or persons co solicit, disclose, receive, tiake'usbof, or to"au- thorize, knowingly pertilt,pai?ticipateiii,' or ac-' puiesce'in"the use of, any-list'of, br names bf, or any information"c'oncei+ning, persons applying for or receiving such assfstance, directly or'lndir&ctly d&ived from the tiecords'; paupers,' files,'or bc%munl- bations of the State Department or subdivisions or agencies thereof, or &quired in the course of the performance of official duties. _. "(2) The tile-making power of the State Depart- ment shall include the power to establish and enforce reasonable rules'and regualtions governing 'the custody, use, and preservation of the records, p&per&, files, Andycommunications of the State Department and '%ts lbcal offices. WhereveP,~under provisions'of law,' names and addresses of recipients of piiblicassistance are furnished to or held by any other agency or de- partment of government, such agency or d&%ii+tmentof governtientshall'be required tomadopt regulations ~' necessary to prevent the publication of'llsttithereof or their use for purposes n&directly connected with the administration of public assistance. . The Internal Revenue Code (Title 26 U.S.C.A.) par. 3614, is as follows: "(a) To determine liability of the taxpayer. The Commissioner, for the purpose of ascertaining the correctness of any return or for the.purpbse of making a return where none has been made, is authoi+ized, by any officer or employee of the Bureau'of Internal Revenue, ihcludlng the field serv'ice,designated by H.fozi; that purpose',to"examine any books, uauers, or memoranda bearinn uvon the matters re- -quir&d io be included In the return, and may require the"attendance of the person rendering the return or of any~officer or employee of such person, or the attendance of any other person havlnu knOWledR=n the Dremlses; and may take his t&stimong with refer- ence to the matter reauired bs law to be Lncluded 1n such return, with power to-administer oaths to such person or persons. "(b) To determine liability'of a transferee. The Commissioners, for the m.xrDose of determining . - Honorable John H. Wimters, page 3 o-6894 the liabllllty at law or in eaultr of a transferee of the property of any person with respect to any Federal taxes imposed upon such person, is hereby~-. authorized, by any officer or employee of the Bureau f Internal Revenue including the.field service, doesignatedby,hIm"f& that purpose to' 'examineany bjooks,bauers;rdc'ords, ormemora&a~'bearMgupon such ITabllity, aid may require'the attendance ~of ttietransferor transferee,'or of any officer or employee'of'suCh person, or'the'attendanc~e' of'any other"'persoii having knowledge ln'the premises,“and ~* may take his testimony with reference to the matter, with power to administer oaths to such-"personor persons." (Underscoring ours for emphasis) ., The~Interhal Revenue (Title 26 U.S.C.A.) par. 3633, further provides as follows: "(a) To enforce summbns. If any'person"'fs.' , summoned under the internal'revenue laws to appear, 'tbtestify, or to produce books, papers, ‘or other data, the district court of the United State'sfor the district in which such person residesshall have jurisdlctlbnby appropriate process'to com- pel such~attendance, testimony;,or production of books, _ papers, . or other data. Paragraph 3197 of the 1l;tternal Revenue Code, (Title 26 U.S.C.A.) entitled 'Definitions provides that: "(a) when used in this title, where not 'other- wise distinctly expressed or manifestly incompatible with the intent thereof - "(1) per'son".The term 'fperson'shall be con- strhed.to"'meanand include an individual, a trust estate, partnership, company, or corporation. ,, "(2) Partnership and'partner. The term 'part- nership' Includes 8 syndicate; group; pobl, joint venture, or other unincorporated organiiation,"' through or by means of which any business, financial operation, or ventiire Is carried on, ana which is not,'within the meaning'o'fthis title, a'.~trustor estate or a corporation; end the term 'partner' includes a member in sucha syndicate, group, pool, joint venture, or 0rganizatFon." _ It should be noted that the-Public Welfare-Act 'o'f1939;’ repealed by the present Public Welfare Act of 1941, contafned a - . ., Honorable John H. Winters, Pam 4 O-6894 corresponding provFslon to V.A.C.S., Art. 695c, Sec. 33, supra. Referring to the records of the Public Welfare Department, the' Act of 1939 provides that 'suchrecords "shall be open to lnspec- tion only~to persons duly authorized by the State, or the United States, to make such Inspection In connectionwith their official duties." It'is~"alsoto be noted that- in 1939 the' Social Security Act was amended by Congress by adding subdivl- sion8 tosection 302,~'supra,and Inobedience to the"Congres- slonal mandate the Texas Public Welfare Act of 1941 made no such exception. The United States Supreme Court, in the case of Boske vs.~Comi~~~ore,(1899)'177 U.S. 459,.44 Li ed. 846;..20'53.m' 701. upheld the regulationof the Secretarr of Treasurr'ln bro- hrbiting the use o? Internal Revenue Collector for any"other ~ than purposesof collecting revenues and further thata colIec- tor'of Internal Revenue cannot be held under State process on'.'.' refusal to produce such records. .'Thlscase involved facts 'where a collector of Internal Revenue had been adjudged In contempt of a Kentucky State Court for refusing, while giving his depo- sition, to file copies of reports in his custody. In affirming the order of the United States District Court dlscharging.Xhe Collector from thencustody of the Sheriff, the court declared at pages 469-70 that: I, . . . This being the case, we do not perceive iipon.what'groundthe regulationin question can be regarded as inconsistent with law, unless Lt be"that the records and papers in the office of a collector of Internal revenue are at all times open,of right to inspection and examination by the public, despite the wishes of the Department. That cannot be admitted. The papers in question, copies of which were sought from the appellee, were the property of the United States, and were in his official custody under a regulation forbidding him to permit their use except for purposes relating to the collection of the revenue of the United States. Reasons of public policy may well have suggested the necessity, in the interest of!the Government, of not allowing access to the re- cords Ln the offices of collectors of internal revenue, except as might be directed by the Secretary of the Treasury. The Interests of persons compelled, under the revenue laws, to furnish information as to their private business affairs would often be seriously affected if the disclosure so made were not properly guarded. Besides, great confusion might arise in the business of the Department if the Secretary allowed the use of records and papers in the custody of collectors to depend upon the discretion or judg- . .A . Honorable John H. Winters, page 5 o-6894 ment of subordinates. At any rate, the Secretary deemed the regulation in question a wise and proper one, and we cannot perceive that his action was be- yond the authtrlty conferred upon him by Congress. . . . . . . . In Carter vs. Irvine (Waco Court of Civil Appeals 1934) 77 S.W. 2d 247, the court at page 249 said: 11 . . . It Is provided in the~federal code that no revenue agent, except as provided by law, shall divulge or make known the amount or source of ln- come, profits, losses, expenditures, or any partlcu- lar thereof set forth or disclosed in any income tax return. A violation of said provision is declared a misdemeanor and punishable by fine or imprisonment, or both. 18 USCA, title 18, Sec. 216; Id., 26 USCA Sections 62 and 1025. Restrictions imposed on revenue agents and others by regulations issued by the Trea- sury Department with reference to disclosures con- cerning such returns have been held to have the force and effect of law, and to constitute Immunity to such agents from enforced disclosures with reference there- to as witnesses In a state court. Boske vi Comingore. 177 U.S.~ 459, 20 S. Ct. 701, 44 L. Ed. 846; Stegail v; Thurman (D.C.) 175 F. 813." It is therefore the opinion of this department that the State Department of Public Welfare should not permit an official of the Treasury Department to Inspect and make photostatic copies of the records relating to an old age assistance recipient, whose son is being investigated for income tax liability. However, In the event you are subpoenaed to appear and produce the records, before doing so we suggest that you con- sult this office. Yours very truly ATTORNEY GENERAL OF TEXAS DW:zd:wc 'By s/bavld Wuntch David Wuntc'h APPROVED NOV 23, 1945 Assistant s/Carlos C. Ashley FIRST ASSISTANT ATTORNEY GENERAL Approved Opinion Committee By s/BWB Chairman