United States of America v. Ingram

Filing 14

FINDINGS and RECOMMENDATIONS Recommending that 1 Petition to Enforce IRS Summons be Granted; Objections Due within Fourteen Days signed by Magistrate Judge Stanley A. Boone on 2/16/2017. Referred to Judge Anthony W. Ishii. Objections to F&R due by 3/6/2017. (Sant Agata, S)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, Petitioner, 12 13 14 15 Case No. 1:16-cv-01663-AWI-SAB FINDINGS AND RECOMMENDATIONS RECOMMENDING THAT PETITION TO ENFORCE IRS SUMMONS BE GRANTED v. JAMES W INGRAM, (ECF No. 1) Respondent. OBJECTIONS DUE WITHIN FOURTEEN DAYS 16 17 18 Currently before the Court is Petitioner United States of America’s petition to enforce an 19 Internal Revenue Service (“IRS”) summons on November 2, 2016. (ECF No. 1.) For the 20 reasons set forth below, the Court recommends that Petitioner’s petition to enforce the IRS 21 summons be granted. 22 I. 23 BACKGROUND 24 The petition alleges that Internal Revenue Service (“IRS”) Revenue Officer Danielle 25 Moser is conducting an investigation of Respondent James W. Ingram concerning individual 26 federal income taxes for years ending December 31, 2009, December 31, 2013, and December 27 31, 2014. On January 27, 2016, Ms. Moser issued two IRS summonses directing Respondent to 28 testify and produce certain documents related to the investigation on February 24, 2016 at the 1 1 IRS’s office in Fresno, California. On January 27, 2016, Ms. Moser left a copy of the 2 summonses at the last and usual place of abode for Respondent, 1744 E. Caldwell Ave., Visalia, 3 CA 93292. Respondent did not appear on February 24, 2016, or otherwise respond to the 4 summonses. 5 On November 2, 2016, the instant petition was filed to enforce the IRS summonses. On 6 November 7, 2016, an order issued requiring Respondent to show cause why he should not be 7 compelled to obey the IRS summonses issued on January 27, 2016. On January 12, 2017, a 8 certificate of service was filed showing that Respondent was personally served on January 11, 9 2017. Respondent has not responded to the November 7, 2016 order. 10 II. 11 LEGAL STANDARDS 12 Pursuant to 26 U.S.C. § 7602, the IRS has authority to issue summonses to investigate tax 13 returns and tax liabilities. Enforcement of IRS summonses is governed by 26 U.S.C. § 7604, 14 which states, in pertinent part: 15 16 17 18 19 20 21 Whenever any person summoned under section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602 neglects or refuses to obey such summons, or to produce books, papers, records, or other data, or to give testimony, as required, the Secretary may apply to the judge of the district court or to a United States commissioner for the district within which the person so summoned resides or is found for an attachment against him as for a contempt. It shall be the duty of the judge or commissioner to hear the application, and, if satisfactory proof is made, to issue an attachment, directed to some proper officer, for the arrest of such person, and upon his being brought before him to proceed to a hearing of the case; and upon such hearing the judge or the United States commissioner shall have power to make such order as he shall deem proper, not inconsistent with the law for the punishment of contempts, to enforce obedience to the requirements of the summons and to punish such person for his default or disobedience. 22 26 U.S.C. 7604(b). Jurisdiction of this Court to enforce summonses is expressly provided under 23 26 U.S.C. § 7402(b) and 7602(a). In issuing an IRS summons: 24 25 26 27 ...the [government] need not meet any standard of probable cause to obtain enforcement of his summons, either before or after the three-year statute of limitations on ordinary tax liabilities has expired. He must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, that the information sought is not already within the Commissioner’s possession, and that the administrative steps required by the Code have been followed.... 28 2 1 U.S. v. Powell, 379 U.S. 48, 57-58 (1964). “The government’s burden is a slight one, and may 2 be satisfied by a declaration from the investigating agent that the Powell requirements have been 3 met.” U.S. v. Dynavac, Inc., 6 F.3d 1407, 1414 (9th Cir. 1993) (citing U.S. v. Abrahams, 905 4 F.2d 1276, 1280 (9th Cir. 1990); Liberty Financial Servs. v. U.S., 778 F.2d 1390, 1392 (9th Cir. 5 1985)). “Once the prima facie case is made, a ‘heavy’ burden falls upon the taxpayer to show an 6 abuse of process ... or lack of institutional good faith.” Id. (citations omitted). “The burden [on 7 the government] is minimal ‘because the statute must be read broadly in order to ensure that the 8 enforcement powers of the IRS are not unduly restricted.’” Crystal v. U.S., 172 F.3d 1141, 1144 9 (9th Cir. 1999) (quoting Liberty Fin. Servs. v. U.S., 778 F.2d 1390, 1392 (9th Cir. 1985)). 10 III. 11 DISCUSSION 12 “A prima facie case of good faith typically is made through the introduction of the sworn 13 declaration of the revenue agent who issued the summons.” United States v. Gilleran, 992 F.2d 14 232, 233 (9th Cir. 1993). In this instance, Ms. Moser has submitted a declaration stating that the 15 purpose of the investigation is to investigate Respondent’s tax liabilities for the taxable years 16 ending in December 2009, December 2013, and December 2014. The material sought is not 17 already in the possession of the IRS and is necessary to determine the existence and amounts of 18 tax liabilities for the taxable years ending in December 2009, December 2013, and December 19 2014. 20 Ms. Moser stated that she was authorized to issue the summonses and all the requisite 21 administrative steps required by the Internal Revenue Code for issuance of the summonses has 22 been taken. Petitioner has met its burden of meeting the Powell requirements and the Court finds 23 that the IRS summonses were issued for the legitimate purpose of investigating Respondent’s tax 24 liabilities. 25 As Respondent has not challenged the issuance of the summonses, he has not met his 26 burden to show an abuse of process or a lack of institutional good faith. Dynavac, Inc., 6 F.3d at 27 1414. Accordingly, the Court recommends that the petition to enforce the IRS summonses be 28 granted. 3 1 IV. 2 CONCLUSION AND ORDER 3 Based upon the foregoing, it is HEREBY RECOMMENDED that: 4 1. Petitioner’s petition to enforce the IRS summons be GRANTED; and 5 2. The United States is directed to promptly serve a copy of this findings and recommendations on Respondent and to file a proof of service with the Court. 6 These findings and recommendations are submitted to the district judge assigned to this 7 8 action, pursuant to 28 U.S.C. § 636(b)(1)(B) and this Court’s Local Rule 304. Within fourteen 9 (14) days of service of this recommendation, any party may file written objections to these 10 findings and recommendations with the Court and serve a copy on all parties. Such a document 11 should be captioned “Objections to Magistrate Judge’s Findings and Recommendations.” The 12 district judge will review the magistrate judge’s findings and recommendations pursuant to 28 13 U.S.C. § 636(b)(1)(C). The parties are advised that failure to file objections within the specified 14 time may result in the waiver of rights on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 839 (9th 15 Cir. 2014) (citing Baxter v. Sullivan, 923 F.2d 1391, 1394 (9th Cir. 1991)). 16 17 IT IS SO ORDERED. 18 Dated: February 16, 2017 UNITED STATES MAGISTRATE JUDGE 19 20 21 22 23 24 25 26 27 28 4

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