Ganey, Van Dusen and Gibbons, Circuit Judges.
The Government appeals from an order of the district court which denied judicial enforcement of twelve Internal Revenue Service summonses issued under authority of Section 7602 of the Internal Revenue Code of 1954, 26 U.S.C. § 7602 (1964), and Treasury Regulation § 301.7602-1 (T.D. 6421, October 23, 1959, and T.D. 6498, October 24, 1960). The petition to the district court was filed pursuant to Sections 7402(b) and 7604(a) of the Internal Revenue Code of 1954, 26 U.S.C. §§ 7402(b), 7604(a) (1964).
Appellee Egenberg is a certified public accountant who has prepared tax returns for various taxpayers including several non-resident opera performers who have performed in the United States. Each summons seeks from Egenberg records which an opera performer turned over to him for the purpose of having prepared United States Departing Alien Tax Returns (Form 1040c). These forms are the equivalent of an income tax return.
The petition discloses that the Internal Revenue Service wants the records in connection with an investigation of Egenberg's civil tax liability for the years 1960 through 1966. The supporting affidavit by Special Agent Peller alleges that the client records are material to an investigation of Egenberg's tax liability in that the documents will show:
"a). The fees paid by respondent's clients for services rendered;
b). fees or commissions due respondent based on refunds obtained by respondent on behalf of his clients;
c). various business and financial transactions between respondent and his clients relating to matters other than in the preparation of tax returns; and
d). the relationships and transactions between respondent and his clients from which income may have been generated."
In opposition to the petition appellant filed two affidavits. One of these, by an attorney, alleged that Egenberg had appeared on September 19, 1967 before the Special Agent in response to the summonses and had turned over twenty-three documents, representing that he had no other papers in his possession. The other, by Egenberg, disclosed that Egenberg had, on January 15, 1968, been indicted in the Southern District of New York for bribing a tax technician of the Internal Revenue Service. A supplemental affidavit by Egenberg alleged that the purpose of the summonses was to provide information that would be available to the United States Attorney for the Southern District of New York in the pending prosecution.
The district court heard the testimony of Egenberg and of Agent Peller, and had before it the depositions of five of Egenberg's artist clients*fn1 and one artist's representative.*fn2 Egenberg admitted having in his possession records belonging to Leonie Rysanek and to Mario Sereni. He denied having in his possession other records covered by the summonses, but that denial is contradicted in several respects by the depositions. He refused to turn over even those records he admitted having, and he refused to identify the representative of Birgit Nilsson to whom he claimed to have delivered her records. He asserted the privilege against self-incrimination, but also testified:
"THE COURT: Mr. Egenberg, how do you claim the Fifth Amendment privilege against self-incrimination in connection with records that do not belong to you? What is the basis for your claim of privilege?
THE WITNESS: I think I am protecting the rights of the taxpayer.
THE COURT: You are? That's what ...