United States of America v. Canepa

Filing 12

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Edmund F. Brennan on 11/20/2017 FINDING that the summons issued by the IRS on 3/18/2016 and served upon Respondent on 3/18/2016, seeking testimony and production of documents and records in Resp ondents possession, was issued in good faith and for a legitimate purpose. The Clerk shall serve this and further orders by mail to William C. Canepa, 219 S. Fairmont, Lodi, California 95240. Objections due within 14 days after being served with these findings and recommendations. (Hunt, G)

1 PHILLIP A. TALBERT
United States Attorney
2 BOBBIE J. MONTOYA
Assistant United States Attorney
3 Eastern District of California
501 I Street, Suite 10-100
4 Sacramento, CA 95814-2322
Telephone: [phone]
5 Facsimile: [phone]
Email: [e-mail]
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7 Attorneys for Petitioner United States of America
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IN THE UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,
Petitioner,

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2:17-CV-01020-TLN-EFB
[PROPOSED] MAGISTRATE JUDGE’S
FINDINGS AND RECOMMENDATIONS
AND ORDER RE: I.R.S. SUMMONS
ENFORCEMENT

v.
WILLIAM C. CANEPA,
Respondent.

Taxpayer:
WILLIAM C. CANEPA

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This matter came on before Magistrate Judge Edmund F. Brennan on November 8, 2017,

20 under the Order to Show Cause filed May 17, 2017, ECF 4, and the continuance of hearing order
21 filed September 25, 2017, ECF 9. The order, with the verified petition filed May 11, 2017,
22 ECF 1, and its supporting memorandum, ECF 2-1, were personally handed to the Respondent at
23 his residence at 219 S. Fairmont, Lodi, California, by Revenue Officer Cynthia J. Kallich on
24 June 8, 2017. ECF 5. Respondent did not file opposition or non-opposition to the verified
25 petition as provided for in the Order to Show Cause. Respondent engaged a power of attorney
26 to represent him before the I.R.S., who was working with Revenue Officer Kallich to get
27 Respondent in compliance with the tax summons at issue in this proceeding before the hearing.
28 The court continued the hearing twice in order to give Respondent additional time to fully
Magistrate Judge’s Findings and Recommendations
and Order Re: I.R.S. Summons Enforcement

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1 comply without the hearing, but Respondent has failed to produce to Revenue Office Kallich all
2 of the requested records. At the hearing, Bobbie J. Montoya, Assistant United States Attorney,
3 personally appeared on behalf of Petitioner, and investigating Revenue Officer Kallich also was
4 present in the courtroom. Respondent failed to appear at the hearing.
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The Verified Petition to Enforce I.R.S. Summons initiating this proceeding seeks to

6 enforce an administrative summons issued March 18, 2016. See Exhibit A to the Petition,
7 ECF 1-2. The summons is part of an investigation of the Respondent to secure information
8 relating to the tax liability and the collection of the tax liability for Form 1040 for the calendar
9 periods ending December 31, 2004, December 31, 2005, December 31 2006, December 31,
10 2007, December 31, 2008, December 31, 2009, December 31, 2010, and December 31, 2011.1
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Subject matter jurisdiction is invoked under 28 U.S.C. §§ 1340 and 1345, and is found to

12 be proper. The I.R.C. §§ 7402(b) and 7604(a) (26 U.S.C.) authorize the government to bring the
13 action. The Order to Show Cause shifted to the respondent the burden of rebutting any of the
14 four requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964).
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The court has reviewed the petition and documents in support. Based on the

16 uncontroverted petition verified by Revenue Officer Cynthia J. Kallich and the entire record, the
17 court makes the following findings:
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(1)

The summons (Exhibit A to the Petition, ECF 1-2) issued by Revenue Officer

19 Cynthia J. Kallich on March 18, 2016, and served upon Respondent on March 18, 2016, seeking
20 testimony and production of documents and records in Respondent’s possession, was issued in
21 good faith and for a legitimate purpose under I.R.C. § 7602, that is, to secure information
22 relating to the tax liability and the collection of tax liability, currently limited to Form 1040
23 calendar periods ending December 31, 2004, December 31, 2005, December 31 2006,
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The summons specifies that it applies to the tax liability or the collection of the tax liability for
the calendar periods ending December 31, 2001, December 31, 2003, December 31, 2004, December 31,
26 2005, December 31, 2006, December 31, 2007, December 31, 2008, December 31, 2009, December 31,
2010, and December 31, 2011. See Summons, Exhibit A to Petition, ECF 1-2, at p. 3. However, the
27 investigation at this time is limited to the tax years ending December 31, 2004, December 31, 2005,
December 31, 2006, December 31, 2007, December 31, 2008, December 31, 2009, December 31, 2010,
28 and December 31, 2011; since issuance and service of the summons, investigation for tax years ending
December 31, 2001 and December 31, 2003 has become moot. See Petition, ECF 1, at ¶ 8.
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Magistrate Judge’s Findings and Recommendations
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and Order Re: I.R.S. Summons Enforcement

1 December 31, 2007, December 31, 2008, December 31, 2009, December 31, 2010, and
2 December 31, 2011.2
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(2)

The information sought is relevant to that purpose.

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(3)

The information sought is not already in the possession of the Internal Revenue

5 Service.
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(4)

The administrative steps required by the Internal Revenue Code have been

7 followed.
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(5)

There is no evidence of referral of this case by the Internal Revenue Service to the

9 Department of Justice for criminal prosecution.
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(6)

The verified petition and its exhibits made a prima facie showing of satisfaction of

11 the requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964).
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(7)

The burden shifted to respondent, William C. Canepa, to rebut that prima facie

13 showing.
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(8)

Respondent presented no argument or evidence to rebut the prima facie showing.

15 The court therefore recommend that the I.R.S. summons served upon Respondent, William C.
16 Canepa, be enforced and that Respondent be ordered to appear at the I.R.S. offices at 4643 Quail
17 Lakes Drive, Stockton, California, before Revenue Officer Cynthia J. Kallich or her designated
18 representative, on the twenty-eighth (28th) day after the filing date of the District Judge’s
19 summons enforcement order, or at a later date to be set in writing by Revenue Officer Cynthia J.
20 Kallich, then and there to be sworn, to give testimony, and to produce for examining and
21 copying the books, checks, records, papers and other data demanded by the summons, the
22 examination to continue from day to day until completed. It is further recommended that if the
23 summons is enforced, the Court retain jurisdiction to enforce its order by its contempt power.
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These findings and recommendations are submitted to the United States District Judge

25 assigned to the case, under 28 U.S.C. § 636(b)(1)(B) and (C) and Rule 304 of the Local Rules of
26 the United States District Court for the Eastern District of California. Within fourteen (14) days
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See n.1, infra.

Magistrate Judge’s Findings and Recommendations
and Order Re: I.R.S. Summons Enforcement

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1 after being served with these findings and recommendations, any party may file written
2 objections with the court and serve a copy on all parties. Such a document should be titled
3 “Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the
4 objections shall be served and filed within fourteen (14) days after service of the objections.
5 The District Judge will then review these findings and recommendations pursuant to 28 U.S.C.
6 § 636(b)(1). The parties are advised that failure to file objections within the specified time may
7 waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir.
8 1991).
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THE CLERK SHALL SERVE this and further orders by mail to William C. Canepa, 219

10 S. Fairmont, Lodi, California 95240.
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IT IS SO ORDERED.

12 DATED: November 20, 2017.
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Magistrate Judge’s Findings and Recommendations
and Order Re: I.R.S. Summons Enforcement

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