Tax Procedure: A Look at Summons Enforcement Proceedings

IRS BuidlingCongress has directed the Internal Revenue Service “to make the inquiries, determinations, and assessments of all taxes . . . imposed by this title.” I.R.C. § 6201(a). To make these “inquiries, determinations, and assessments,” the IRS has the authority to issue a summons for testimony or for relevant books and records. See I.R.C. § 7602(a). If the taxpayer fails to comply, the IRS can then bring a summons enforcement proceeding in district court. See I.R.C. § 7402(b) (granting jurisdiction over summons enforcement proceedings.

A summons will be enforced if the IRS can 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.” United States v.Read More

Enforcing the Summons Against Microsoft

Today we are really pleased to welcome guest blogger Keith Fogg, who is a Professor of Law at Villanova Law School, and who currently is visiting at Harvard Law School this academic year to start and direct the tax clinic there. He is a co-founder of the blog, Procedurally Taxing, which seeks to comment on tax procedure issues. Before joining the Villanova Law School faculty, Keith worked for over 30 years with the Office of Chief Counsel, IRS. Keith previously has served as the Chair of the ABA Tax Section’s Pro Bono and Tax Clinic Committee, working to extend the representation of low income taxpayers before the Tax Court, and he currently is a member of the Tax Section Council.Read More

Summons Enforcement: “Shall” Really Does Mean Shall.

The Internal Revenue Code gives the IRS the authority to issue a summons to third parties, but it also imposes a notice requirement; if the IRS wants to summon Jane Smith’s bank records from her bank, she must be given at least twenty-three days prior notice. I.R.C. § 7609(a)(1).

When the IRS seeks to enforce a summons, it must meet the requirements of United States v. Powell, 379 U.S. 48 (1964), which require a showing that

  • the IRS is conducting an investigation for a legitimate purpose;
  • the information sought is relevant;
  • the IRS does not already have the information; and
  • the IRS has followed the “administrative steps required” by the Code.
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