Knudsen v. United States of America et al

Filing 6

ORDER that the United States' Motion to Dismiss the Motion to Quash (Doc. 3 ) is granted. The Clerk is directed to terminate this action and enter judgment accordingly. Signed by Judge G Murray Snow on 11/6/13.(LSP)

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WO

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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ORDER

Petitioner,

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No. MC-13-00021-PHX-GMS

Barry Knudsen,

v.
United States of America; and Gregory
Allison,

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Respondents.

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Pending before the Court is Respondent the United States of America’s (the

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“United States”) Motion to Dismiss the Petition to Quash the Internal Revenue Service’s

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(“IRS”) Third Party Summons. (Doc. 3.) For the following reasons, the Motion is

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granted.
BACKGROUND

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This case arises from the collection and investigation of Petitioner Barry

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Knudsen’s 2008 federal income tax liabilities. On March 8, 2013, Revenue Officer

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Gregory Allison issued a summons to American Express Merchant Services, located in

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Phoenix, Arizona, seeking certain documents relating to Knudsen. (Doc. 1 ¶ 7.) On

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March 29, 2013, Knudsen filed a Motion to Quash the Third Party Summons (Doc. 1) in

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this Court, alleging that the issuance of the summons was improper because the IRS had

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failed to give him timely notice as required by statute (Id. ¶¶ 8–9) and because of other

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deficiencies.

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On June 20, 2013, the United States filed the instant Motion to Dismiss Plaintiff’s

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Motion to Quash. (Doc. 3.) On July 29, 2013, this Court issued an order directing

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Knudsen to respond to Defendant’s Motion by August 12, 2013. (Doc. 4.) Plaintiff failed

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to file a response.
ANALYSIS

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The government moves to dismiss the petition under Fed. R. Civ. P. 12(b)(1) for

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lack of subject matter jurisdiction. The United States is immune from suit unless that suit

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falls within a valid waiver of sovereign immunity. Valdez v. United States, 56 F.3d 1177,

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1179 (9th Cir. 1995). The United States has waived its sovereign immunity with respect

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to certain actions to quash an IRS summons under 26 U.S.C. § 7609(b). Only those

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individuals who are entitled to receive notice of a summons under that statute have

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standing to move to quash that summons. Viewtech, Inc. v. United States, 653 F.3d 1102,

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1104 (9th Cir. 2011)

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Section 7609(a) outlines particular notice requirements for third-party summonses.

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26 U.S.C. § 7609(a). Section 7609(c) lists several exceptions to these notice

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requirements. These exceptions include that the notice requirement does not apply to

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third-party summonses issued in aid of the collection of “an assessment made or

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judgment rendered against the person with respect to whose liability the summons is

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issued” or the “liability at law or in equity of any transferee or fiduciary of [such a]

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person.” 26 U.S.C. 7609(c)(2)(D). The Ninth Circuit has construed these exceptions to

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state that a third party need not receive notice that the IRS has summonsed the third

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party’s records when that third party is “the assessed taxpayer, a fiduciary or transferee of

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the taxpayer, or the assessed taxpayer had ‘some legal interest or title in the object of the

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summons.’” Viewtech, Inc., 653 F.3d at 1105 (quoting Ip v. United States, 205 F.3d

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1168, 1175 (9th Cir. 2000)).

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Here, Knudsen is the assessed taxpayer. As such, he was not entitled to receive

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notice of the summons and thus lacks standing to bring this action to quash the summons.

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Therefore,

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IT IS ORDERED that the United States’ Motion to Dismiss the Motion to Quash

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(Doc. 3) is granted. The Clerk of Court is directed to terminate this action and enter

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judgment accordingly.

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Dated this 6th day of November, 2013.

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