United States of America v. Craft

Filing 8

MEMORANDUM AND RECOMMENDATIONS on 1 Petition to Enforce IRS Summons filed by United States of America. Objections to M&R due by 2/18/2020. Signed by Magistrate Judge David S. Cayer on 2/3/2020. (mek)

Petitioner

Respondent

)

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Pursuant to the October 10,2019 Order to Show Cause (Doc. 2) and the Order Continuing

Show Cause Hearing to Enforce IRS Summons (Doc. 5), this matter came before the undersigned

United States Magistrate Judge for Show Cause Hearing on December 77,2019, then continued

until February 3,2020, on the Petition of the United States of America, on behalf of the Intemal
Revenue Service (the "IRS"), under the authority

of 26 U.S.C.

$$ 7402(b) and 7604(a), to

judicially enforce an IRS Summons issued to Respondent Kevin B. Craft ("Respondent") on
March 21,2019 (the "Summons").
In support of its request to judicially enforce the Summons, the United States tendered the
October 9,2019 Declaration of Teresa H. Driver (the "Driver Declaration"), who is a dulycommissioned Revenue Officer

of the IRS, employed in the Small Business/Self-Employed

Division, South Atlantic Compliance Area.
Upon the Petition and the Driver Declaration, this Court entered its October 10,2019 Order

to Show Cause, in which the Court found that the United States had made a prima facie showing
that:

1)

An investigation is being conducted by the IRS for

a

legitimate purpose;

2)

The inquiries made may be relevant to that purpose;

3)

The information sought is not already within the possession of the IRS; and,

4)

The administrative steps required by the Internal Revenue Code have been

substantially followed.
See Doc.

2, atp.2,n3;'

see also United State v.

Powell,379 U.S. 48, 57-58 (196$; Conner v.

United 9tates,434F.3d676,680 (4th Cir.2006); Alphinv. United States,809 F.2d 236,238 (4th

Cir. 1987).
The Court also found in the October 10,2019 Order to Show Cause that the burden of
coming forward and opposing enforcement of the Summons had shifted to Respondent, ordered
Respondent to appear for the Show Cause Hearing on December 17,2019, and further ordered
Respondent to present any defenses or opposition to the Petition in writing to be filed with the

Clerk and served on counsel for the United States at least 21 days prior to the Show Cause Hearing.
See Doc.

2, atp.2,14.

Pursuant to Federal Rule

of Civil Procedure 4(e)(1) and North Carolina Rule of Civil

Procedure afi)(1)(c), Revenue Officer Driver personally served Respondent with copies of the

Petition, with exhibits, and the Order to Show Cause by mailing a copy of these documents
certified mail, return receipt requested to Respondent Kevin B. Craft, 126 Chandeleur Drive,
Mooresville, North Carolina 28117.

A

signed copy of the green card evidencing delivery and

receipt on October 19,2019 was attached to the United States'Proof of Service. See Doc. 3.
Respondent did not file any response to the Petition, nor did Respondent appear at the
Show Cause Hearing. Assistant United States Attomey ("AUSA") Seth Johnson appeared at the
December 17,2}lg Show Cause Hearing on behalf of Petitioner. Revenue Officer Driver was also
present. At the Show Cause Hearing, AUSA Johnson informed the Court that Respondent had not

contacted his office nor had Respondent contacted Revenue Officer Driver since service of the
Petition, with exhibits, and Order to Show Cause.
Thereafter, Respondent informed the Government and the Court that he had appeared for
the December 17,2019 Show Cause Hearing at the incorrect courthouse. The Government moved

to continue the show cause hearing, which the Court granted. (Docs. 5 and 6).
Respondent Craft failed to comply with the IRS Summons prior to the February

IT IS THEREFORE

RECOMMENDED that the Petition (Docket Entry 1)

be

GRANTED and that an Order (the "Enforcement Order") be entered compelling Respondent
Kevin B. Craft to fully comply with and obey the Summons, by producing to Revenue Officer
Driver, or any other person designated by the IRS, all books, papers, records, and other data that
are demanded by the Summons and that are in his possession, custody, or control, by no later than

April 3, 2020, by appearing on April 3, 2020 at 10:00 a.m., at the IRS's office located at 4905
Koger Blvd, Suite 102, Greensboro, NC27407, before Revenue Officer Driver, or any other person
designated by the IRS, and give testimony, as demanded by the Summons.

Within 14 days of being served with this Recommendation, Respondent and/or Petitioner
may file written objections with the Court and serve a copy of those objections on all parties. Such

a document should be entered "Objections to Recommendation of United States Magistrate
Judge." Any response to the Objections must be filed and served on all parties within l4 days after
service of the Objections. Failure to file Objections within the specified time may waive the right

of appeal of the Court's Enforcement Order. See l|rright v. Collins, 7 66 F .2d 841 , 845-46 (4th Cir.
198s).