United States of America v. Cunamay

Filing 5

ORDER Granting 1 Petition to Enforce Internal Revenue Summons filed by United States of America. Signed by Judge Barry Ted Moskowitz on 4/9/2018.(mxn)

Download PDF
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 UNITED STATES OF AMERICA, 11 Petitioner, 12 v. 13 ERNEST CUNAMAY, 14 Respondent. 15 16 ) ) ) ) ) ) ) ) ) ) Case No. 18cv0025 BTM ORDER GRANTING PETITION TO ENFORCE INTERNAL REVENUE SERVICE SUMMONS The Government has petitioned the Court for an order enforcing the Internal 17 Revenue Service (“IRS”) Summons issued to Ernest Cunamay (“Respondent”). On 18 January 20, 2018, the Court issued an order setting a hearing on the petition to 19 enforce. On February 14, 2018, on the IRS’s third attempt to personally serve 20 Respondent, the IRS went to Respondent’s last known address and asked a man who 21 identified himself as Respondent’s bother, Phil Penales, whether Respondent was 22 home. Mr. Penales said that Respondent was home. When the IRS Revenue Officer 23 knocked on the door, Respondent did not answer. Mr. Penales agreed to take the 24 envelope containing a copy of the Court’s order, the Government’s petition to 25 enforce and supporting declaration and he placed it inside Respondent’s residence. 26 Respondent did not file a written response to the order. 27 The hearing was held on the Government’s petition on March 2, 2018, at 2:00 28 p.m. The Government was represented by Assistant United States Attorney Leslie 1 M. Gardner. Respondent did not appear. For the reasons explained herein, the 2 Government’s petition to enforce the summons is granted. 3 4 BACKGROUND On May 19, 2017, Nelli Ayrapetyan, a Revenue Officer employed by the IRS, 5 issued an IRS summons to Respondent. [Declaration of Revenue Officer Nelli 6 Ayrapetyan in Support of Petition, (“Ayrapetyan Decl.”), ¶ 4.] The IRS is 7 conducting an investigation to determine Respondent’s ability to pay his tax 8 liabilities for the 2005, 2006, 2007, 2009, and 2010 tax years. [Id. at ¶ 2.] On May 9 19, 2017, Revenue Officer Ayrapetyan served the summons on Respondent by 10 leaving an attested copy of the summons at his last and usual place of abode. [Id. at 11 ¶ 5.] The summons called for Respondent to appear before the IRS on June 20, 12 2017, at 9:00 a.m. [Id. at ¶ 6.] 13 On June 20, 2017, Respondent did not appear and did not provide any of the 14 summonsed information. [Id.] The Office of Division Counsel of the IRS and the 15 U.S. Attorney’s office subsequently sent a letter to Respondent directing him to 16 appear before the IRS. [Id. at ¶¶ 7, 9.] Respondent did not appear and did not 17 provide the IRS with the testimony and documents requested by the summons. [Id. 18 at ¶¶ 8, 10.] 19 On January 1, 2018, the Government petitioned the Court to enforce the 20 summons. On January 22, 2018, the Court ordered that Respondent appear before 21 the Court on March 2, 2018 at 2:00 p.m. The Court also ordered Respondent to 22 respond with any defense or opposition to the petition at least 14 days prior to the 23 hearing date. Respondent did not file a written response and did not appear at the 24 hearing. 25 26 DISCUSSION Pursuant to 26 U.S.C. § 7602(a)(1), the Secretary of the Treasury may 27 “examine any books, papers, records, or other data which may be relevant or 28 material” in connection with “ascertaining the correctness of any return, making a 2 1 return where none has been made, determining the liability of any person for any 2 internal revenue . . . or collecting any such liability.” Section 7602(a)(1) authorizes 3 the Secretary to issue summonses to compel persons in possession of such books, 4 papers, records, or other data to appear and produce the same and/or give testimony. 5 In order to obtain judicial enforcement of an IRS summons, the United States 6 “must first establish its ‘good faith’ by showing that the summons: (1) is issued for a 7 legitimate purpose; (2) seeks information relevant to that purpose; (3) seeks 8 information that is not already within the IRS’ possession; and (4) satisfies all 9 administrative steps required by the United States Code.” Fortney v. United States, 10 59 F.3d 117, 119 (9th Cir. 1995) (citing United States v. Powell, 379 U.S. 48, 57-58 11 (1964)). “The government’s burden is a ‘slight one’ and typically is satisfied by the 12 introduction of the sworn declaration of the revenue agent who issued the summons 13 that Powell requirements have been met.” Id. at 120. Once the government has 14 made a prima facie showing that enforcement of the summons is appropriate, the 15 burden shifts to the Respondent to show that enforcement of the summons would be 16 an abuse of the court’s process. Powell, 379 U.S. at 58. The Supreme Court has 17 characterized respondent’s burden as a heavy one. Id. 18 The Government’s petition and Revenue Officer Ayrapetyan’s supporting 19 declaration satisfy all four elements of the Powell standard. First, the IRS is 20 conducting an investigation to determine the collectability of Respondent’s tax 21 liabilities for the 2005, 2006, 2007, 2009, and 2010 tax years. [Ayrapetyan Decl., ¶ 22 2.] Such an investigation is expressly authorized by 26 U.S.C. § 7602(a). The 23 Internal Revenue Code explicitly allows the issuance of a summons for the purpose 24 of determining “the liability of any person for any internal revenue tax . . . or 25 collecting any such liability . . .” 26 U.S.C. § 7602(a). Thus, the summons was 26 issued for a legitimate purpose. Second, Revenue Officer Ayrapetyan has declared 27 in her declaration that the information requested by the summons may be relevant to 28 determine the collectability of Respondent’s tax liabilities. [Id. at ¶ 14.] Third, the 3 1 IRS does not already possess the testimony, papers, records, and other data sought 2 by the summons issued to Respondent. [Id. ¶ 12.] Finally, the IRS has followed and 3 exhausted all required administrative steps, but Respondent has not complied with 4 the summons. [Id. at ¶ 13.] Thus, the Government has made prima facie showing 5 that it is entitled to judicial enforcement of the summons. 6 7 CONCLUSION For the reasons set forth herein, the Government’s petition to enforce the IRS 8 summons is GRANTED. Respondent, Ernest Cunamay, is directed to appear before 9 IRS Revenue Officer Nelli Ayrapetyan or a designee, on April 19, 2018, at 10:00 10 a.m., at the offices of the Internal Revenue Service located at 333 W. Broadway, 11 Suite 906, San Diego, California, 92101, and to produce the documents and give 12 testimony as directed in the summons. The Government shall serve a copy of this 13 Order upon Respondent in accordance with Fed. R. Civ. P. 5, within 7 days of the 14 date that this Order is served upon counsel for the Government, or as soon thereafter 15 as possible. Proof of service shall be filed with the Clerk of Court as soon as 16 practicable. 17 Respondent is hereby notified that failure to comply with this Order may 18 subject him to sanctions for contempt of court. 19 IT IS SO ORDERED. 20 DATED: April 9, 2018 21 22 BARRY TED MOSKOWITZ, Chief Judge United States District Court 23 24 25 26 27 28 4

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?