United States of America v. Kelly

Filing 8

FINDINGS AND RECOMMENDATIONS and ORDER signed by Magistrate Judge Deborah Barnes on 6/6/2017 RECOMMENDING that the I.R.S. summons served upon Respondent, Michael A. Kelly, be enforced and that Respondent be ordered to appear at the I.R.S. offices at 4330 Watt Avenue, MS 5041/3327, Sacramento, California, before Revenue Officer Kim Ulring or her designated representative, by 6/26/2017; REFERRING this matter to Judge William B. Shubb;ORDERING the parties to file and serve any objections within fou rteen (14) days; ORDERING that any reply to said objections be filed and served fourteen (14) days thereafter; ADVISING the parties that a failure to file objections within the specified time may waive the right to appeal the District Court's order; ORDERING the Clerk of Court to serve this and further orders on Michael A. Kelly at 6108 Watt Avenue, N. Highlands, CA 95660. (Michel, G.)

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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: (916) 554-2775 5 Facsimile: (916) 554-2900 Email: Bobbie.Montoya@usdoj.gov 6 7 Attorneys for Petitioner United States of America 8 IN THE UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, No. 2:17-cv-01022-WBS-DB Petitioner, 12 13 14 FINDINGS AND RECOMMENDATIONS AND ORDER RE: I.R.S. SUMMONS ENFORCEMENT v. MICHAEL A. KELLY, Respondent. 15 16 17 18 19 This matter came on before the undersigned on May 26, 2017, under the Order to Show 20 Cause filed March 30, 2017. (ECF No. 3.) The order, with the verified petition filed March 21, 21 2017, (ECF No. 1), and its supporting memorandum, (ECF No. 2-1), was personally served on 22 Respondent, on April 5, 2017, at his place of business, at 6108 Watt Avenue, N. Highlands, 23 California. (ECF 4.) Respondent did not file opposition or non-opposition to the verified 24 petition as provided for in the Order to Show Cause. At the hearing, Bobbie J. Montoya, 25 Assistant United States Attorney, appeared for Petitioner, and investigating Revenue Officer 26 Kim Ulring also was present in the courtroom. Respondent appeared at the hearing on his own 27 behalf.1 28 1 30 Respondent informed the court that he had difficulty locating some records. Petitioner 1 1 The Verified Petition to Enforce I.R.S. Summons initiating this proceeding seeks to 2 enforce an administrative summons issued June 17, 2016. See Exhibit A to the Petition, ECF 13 2. The summons is part of an investigation of the respondent to secure information related to the 4 tax liability or the collection of the tax liability for assessed federal income tax (Form 1040) for 5 the tax periods ending December 31, 2010, December 31, 2011, December 31, 2012, 6 December 31, 2013, December 31, 2014, and December 31, 2015. 7 Subject matter jurisdiction is invoked under 28 U.S.C. §§ 1340 and 1345, and is found to 8 be proper. I.R.C. §§ 7402(b) and 7604(a) (26 U.S.C.) authorize the government to bring the 9 action. The Order to Show Cause shifted to respondent the burden of rebutting any of the four 10 requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964). 11 The undersigned has reviewed the petition and documents in support. Based on the 12 uncontroverted petition verified by Revenue Officer Ulring, and the entire record, I make the 13 following findings: 14 (1) The summons (Exhibit A to the Petition, ECF 1-2) issued by Revenue Officer Kim 15 Ulring on June 17, 2016 and served upon Respondent on June 17, 2017, seeking testimony and 16 production of documents and records in Respondent’s possession, was issued in good faith and 17 for a legitimate purpose under I.R.C. § 7602, that is, to secure information related to the tax 18 liability or the collection of the tax liability for assessed federal income tax (Form 1040) for the 19 tax periods ending December 31, 2010, December 31, 2011, December 31, 2012, December 31, 20 2013, December 31, 2014, and December 31, 2015. 21 (2) The information sought is relevant to that purpose. 22 (3) The information sought is not already in the possession of the Internal Revenue 23 Service. 24 (4) The administrative steps required by the Internal Revenue Code have been 25 followed. 26 27 28 30 informed the court that respondent had produced some records prior to the May 26, 2017 hearing. 2 1 (5) There is no evidence of referral of this case by the Internal Revenue Service to the 2 Department of Justice for criminal prosecution. 3 (6) The verified petition and its exhibits made a prima facie showing of satisfaction of 4 the requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964). 5 (7) The burden shifted to respondent, Michael A. Kelly, to rebut that prima facie 6 showing. 7 (8) Respondent presented no argument or evidence to rebut the prima facie showing. CONCLUSION 8 9 Accordingly, IT IS HEREBY RECOMMENDED that the I.R.S. summons served upon 10 Respondent, Michael A. Kelly, be enforced and that Respondent be ordered to appear at the 11 I.R.S. offices at 4330 Watt Avenue, MS 5041/3327, Sacramento, California, before Revenue 12 Officer Kim Ulring or her designated representative, on or before June 26, 2017, as agreed to by 13 Revenue Officer Ulring and Respondent Michael A. Kelly at the show cause hearing, then and 14 there to be sworn, to give testimony, and to produce for examining and copying the books, 15 checks, records, papers and other data demanded by the summons, the examination to continue 16 from day to day until completed, unless compliance with the summons is fully achieved prior to 17 that date and time. Should the foregoing appointment date need to be continued or rescheduled, 18 the Respondent is to be notified in writing of a later date by Revenue Officer Ulring. I further 19 recommend that if it enforces the summons, the Court retain jurisdiction to enforce its order by 20 its contempt power. 21 These findings and recommendations are submitted to the United States District Judge 22 assigned to the case, under 28 U.S.C. § 636(b)(1)(B) and (C) and Rule 304 of the Local Rules of 23 the United States District Court for the Eastern District of California. Within fourteen (14) days 24 after being served with these findings and recommendations, any party may file written 25 objections with the court and serve a copy on all parties. Such a document should be titled 26 “Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the 27 objections shall be served and filed within fourteen (14) days after service of the objections. 28 The District Judge will then review these findings and recommendations pursuant to 28 U.S.C. 3 30 1 § 636(b)(1). The parties are advised that failure to file objections within the specified time may 2 waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 3 1991). 4 IT IS ALSO HEREBY ORDERED that: 5 THE CLERK SHALL SERVE this and further orders by mail to: Michael A. Kelly 6108 Watt Avenue N. Highlands, CA 95660 6 7 8 Dated: June 6, 2017 9 10 11 12 13 14 15 16 17 18 19 20 21 22 DLB:6 23 DB/orders/orders.civil/USvKelly0049.prop.f&rs 24 25 26 27 28 4 30

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