Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-01467/USCOURTS-cand-3_07-cv-01467-2/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7402 IRS: Petition to Enforce IRS Summons

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

ET AL., 

Petitioners,

v.

RAMON LAGUARDIN, GENERAL 

PARTNER,

Respondent.

________________________________/

No. C-07-1467 JCS

ORDER GRANTING ENFORCEMENT OF

INTERNAL REVENUE SERVICE SUMMONS

[Docket No. 1]

I. INTRODUCTION

Petitioners, the United States of America and Revenue Officer Dwight S. McDaniel, seek

enforcement of an Internal Revenue Service summons against Respondent, Ramon LaGuardin,

General Partner of Elite Parking. Petitioner McDaniel (“Petitioner”) is attempting to collect certain

federal tax liabilities of Elite Parking for the taxable periods ending March 31, 2001, June 20, 2001,

September 30, 2001, December 31, 2001, March 31, 2002, June 30, 2002, September 30, 2002,

December 31, 2005, March 31, 2006, June 30, 2006, and September 30, 2006. Verified Petition at

Exhibit A, and ¶ 3; Moore Declaration at ¶ 3 (noting that the summons sets forth the correct

periods). On December 18, 2006, Petitioner served a summons upon Respondent by taping a copy

of the summons to his desk. Id. at ¶ 7. The summons required Respondent to appear before

Petitioner on January 18, 2007, to give testimony and to bring for examination all documents and

records in his possession or control regarding receipt of income by Elite Parking for the time periods

listed above. Respondent did not appear on January 18, 2007, as requested in the summons. Moore

Declaration at ¶ 4.

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United States District Court

For the Northern District of California

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On March 14, 2007, Petitioner filed a verified petition to enforce an IRS summons against

Respondent, requesting that the Court order the Respondent to appear before Petitioner to give

testimony and produce items requested in the summons, at a time and place directed by the Court. 

Id. at ¶ B. Petitioner also requested that the Court grant its costs in this proceeding, as well as any

other relief that may be necessary and proper. Id. at ¶ C. On March 22, 2007, this Court issued an

order to show cause why the summons should not be enforced, and a hearing was held on May 11,

2007. At the hearing, Thomas Moore appeared for the United States. Respondent did not appear in

response to the OSC and did not oppose enforcement. 

For the reasons stated below, IT IS HEREBY ORDERED that Petitioners’ summons be

enforced and that Petitioners’ request for costs be GRANTED. 

II. DISCUSSION

A. Validity of Summons

The IRS is authorized to make administrative “inquiries, determinations, and assessments”

regarding all internal revenue taxes that are owed. 26 U.S.C. § 6201. In connection with such

inquiries, the IRS has the authority to summon the person liable for the tax to appear “at a time and

place named in the summons and to produce such book, papers, records, or other data, and to give

such testimony, under oath, as may be relevant or material.” 26 U.S.C. § 7602(a)(2). Such

summons may be issued for the purpose of “ascertaining the correctness of any return, making a

return where none has been made, determining the liability of any person for any internal revenue

tax or the liability at law or in equity of any transferee or fiduciary of any person in respect of any

internal revenue tax, or collecting any such liability.” 26 U.S.C. § 7602(a). However, no summons

may be issued or enforced “if a Justice Department referral is in effect with respect to such person.” 

26 U.S.C. § 7602(d)(1). Thus, a summons issued pursuant to 26 U.S.C. § 7602 is valid only if

“issued for a proper purpose and prior to a recommendation for criminal prosecution.” Donaldson v.

United States, 400 U.S. 517, 536 (1971). 

B. Standard for Enforcement of IRS Summons

The Supreme Court held in United States v. Powell that to obtain enforcement of a summons,

the IRS must first establish its “good faith” by showing that the summons: (1) is issued for a

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legitimate purpose; (2) seeks information relevant to that purpose; (3) seeks information not already

within the IRS’ possession; and (4) satisfies all administrative steps required by the United States

Code. 379 U.S. 48, 57-58 (1964). The government's burden is “a slight one” and typically is

satisfied by the introduction of the sworn declaration of the revenue agent who issued the summons

establishing that the Powell requirements have been met. United States v. Dynavac, Inc., 6 F.3d

1407, 1414 (9th Cir. 1993). Once a prima facie case is made, a “heavy” burden is placed on the

taxpayer to show an abuse of process or lack of good faith. Id.

First, to establish a legitimate purpose, the IRS must demonstrate that the summons is being

issued for one of the purposes for which is has authority: “ascertaining the correctness of any return,

making a return where none has been made, determining the liability of any person for any internal

revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect

of any internal revenue tax, or collecting any such liability.” 26 U.S.C. § 7602(a).

Second, the standard for relevance is whether the information sought might shed light on the

taxpayer’s liability. United States v. Ryan, 455 F.2d 728, 733 (9th Cir. 1972). However, the Ninth

Circuit has cautioned that “the government’s burden, while not great, is also not non-existent” and it

is not necessarily satisfied by an IRS agent’s mere assertion of relevance. United States v. Goldman,

637 F.2d 664, 667 (9th Cir. 1980). Thus, the Court may “scrutinize the summons to determine

whether [the IRS] seeks information relevant to a legitimate investigative purpose” and may choose

either to refuse enforcement or narrow the scope of the summons. Goldman, 637 F.2d at 667. A

summons should not be enforced if it is so overbroad that it constitutes a violation of the Fourth

Amendment ban on unreasonable search and seizure. United States v. Malnik, 489 F.2d 682 (5th

Cir. 1974).

Third, a statement by the government that it does not possess the information sought by the

summons is generally sufficient to shift the burden to the taxpayer to show actual possession in order

to defeat the summons. United States v. Garrett, 571 F.2d 1323 (5th Cir. 1978). 

Fourth, to comply with administrative requirements, the summons must be served either by

delivery “in hand to the person to whom it is directed” or by leaving it at that person’s “last and

usual place of abode.” 26 U.S.C. § 7603. Where the summons requires production of documents,

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“it shall be sufficient if such books, papers, records, or other data are described with reasonable

certainty.” Id. The time and place of the examination must be “reasonable under all the

circumstances” and must be at least 10 days from the date the summons is served. 26 U.S.C. §

7605(a).

C. Analysis of the Summons and Verified Petition

As an initial matter, the summons issued by Petitioners is valid because it was issued for the

proper purpose under 26 U.S.C. § 7602(a) of collecting Elite Parking’s tax liability and there is no

evidence that a Justice Department referral has been made with regard to Respondent.

The government has met its initial burden under Powell through its Verified Petition. First,

the IRS issued the summons for the legitimate purposes of completing its inquiry into Elite

Parking’s federal tax liability and collecting that liability. Verified Petition at ¶¶ 3, 4, 8. Second,

the IRS states that the information it seeks is “relevant and material” to collecting Respondent’s tax

liability. Id. at ¶ 4. The IRS also asserts that the information sought “can reasonably be expected to

assist in the collection of” Elite’s tax liability, and “was and now is essential to completion of” its

inquiry into Elite’s tax liability. Id. at ¶ 8. This Court finds that the information sought by the IRS

is both reasonable and relevant to the purpose of collecting Elite Parking’s tax liability. Third, the

IRS has met its burden of establishing its need for this information through its assertion that it does

not otherwise have “access, possession, or control” of the information it seeks in the summons. Id.

at ¶ 6. Fourth, the IRS states that it has fulfilled all of the required administrative steps under the

United States Code. Id. at ¶11. The IRS properly served the summons upon Respondent by leaving

it on his desk at his “last and usual place of abode” address, id. at ¶¶ 7, 11, and Exhibit A, which is

an acceptable form of service. United States v. Gilleran, 992 F.2d 232 (9th Cir. 1993). In addition,

the summons is sufficiently clear, and the date of the requested appearance was more than 10 days

after the summons was served.

Thus, the IRS has met its burden by presenting evidence through its Verified Petition that the

summons was issued for a legitimate purpose; that the information sought may be relevant to that

purpose; that the summoned information is not already in possession of the IRS; and that the proper

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administrative steps have been followed. Respondent has submitted no evidence to refute these

facts, and has not opposed enforcement of the summons. 

D. Request for Costs

Costs may be awarded to the government as a prevailing party in actions to enforce IRS

summonses under Rule 54(d)(1) of the Federal Rules of Civil Procedure. See, e.g., Conklin v.

United States, 1985 WL 2211 (D. Colo.); Holderbaum v. United States, 589 F. Supp. 107 (D.Colo.

1984). Fed. R. Civ. P. 54(d)(1) provides that “except when express provision therefor is made in a

statute of the United States or in these rules, costs other than attorney's fees shall be allowed as of

course to the prevailing party unless the court otherwise directs.” As there is no applicable

exception to this rule in this case, it is recommended that costs be awarded to the Petitioners. The

government should submit a bill of costs so that a determination may be made as to the appropriate

costs.

III. CONCLUSION

IT IS HEREBY ORDERED that the summons be enforced and that Respondent appear for

examination and provide the requested books, papers, records, and data. In addition, Petitioners’

request for an award of costs is GRANTED. 

IT IS SO ORDERED.

DATED: June 29, 2007

 

JOSEPH C. SPERO

United States Magistrate Judge

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