## Facts

- The IRS issued income tax deficiency notices to several related corporations and to Thomas and Joseph Gambino after second examinations of corporate books and records for tax years 1966–1968.
- Petitioners alleged the second examinations, though formally permitted under I.R.C. § 7605(b), were not initiated or conducted in good faith for a legitimate purpose.
- Petitioners claimed their returns were selected for reexamination because Thomas and Joseph Gambino were related to an alleged organized-crime investigation target, and they cited an alleged statement suggesting officials sought to “get a Gambino.”
- Petitioners also alleged the deficiency determinations were arbitrary, including wholesale disallowance of claimed business expenses and income adjustments in round-dollar amounts.
- Before trial on the merits, petitioners moved under Tax Court Rule 103(a)(10) for a protective order requiring the government to produce and impound “all documents” relating to the audits and any related investigations by multiple agencies.
- Petitioners sought additional sanctions if their allegations were proved, including declaring the deficiency notices null and void or shifting to the Commissioner the burden of proof or at least the burden of going forward.

## Issues

1. Whether Tax Court Rule 103(a)(10) permits an impounding order to obtain broad access to government documents otherwise obtainable through ordinary discovery or other procedures.
2. Whether proven claims of discriminatory audit selection and allegedly arbitrary deficiency determinations would justify (a) voiding deficiency notices or (b) shifting the burden of proof or burden of going forward to the Commissioner.

## Decision

- The court denied the motion for a protective order.
- Rule 103(a)(10) could not be used to impound documents as a substitute for discovery when the materials could be sought through other available procedures.
- Even assuming petitioners could prove discriminatory selection for examination and alleged arbitrariness in the determinations, those showings would not render the deficiency notices null and void.
- Such allegations, standing alone, also would not automatically shift the burden of proof or the burden of going forward to the Commissioner.

## Legal Principles

- Tax Court Rule 103(a)(10) is a protective-order mechanism and cannot be converted into a broad, affirmative impoundment device to obtain access to government files obtainable through other authorized means.
- Allegations (even if proven) that the IRS discriminatorily selected a taxpayer for examination do not, by themselves, invalidate deficiency notices in Tax Court.
- Assertions that the IRS made arbitrary adjustments (e.g., blanket disallowances or round-number increases) may be litigated at trial but do not warrant pretrial nullification of notices or automatic burden shifting via a Rule 103 motion.

## Conclusion

The Tax Court refused to order broad impoundment of government records under Rule 103(a)(10) and held that alleged discriminatory audit selection or asserted arbitrariness in the IRS’s determinations did not, without more, void deficiency notices or reassign the usual burdens in Tax Court.


Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324 (1974)