Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01377/USCOURTS-casd-3_10-cv-01377-0/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

SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Petitioner,

v.

NOEL S. CUNNINGHAM,

Respondent. ___________________________________

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Case No. 10cv1377 IEG (RBB)

ORDER GRANTING PETITION TO

ENFORCE INTERNAL REVENUE

SUMMONS

The Government has petitioned the Court for an order enforcing the Internal Revenue

Service (“IRS”) Summons issued to Respondent Noel S. Cunningham (“Respondent”). On June 30,

2010, the Court issued an order to show cause why the IRS summons should not be judicially

enforced. On July 6, 2010, the IRS personally served a copy of the order to show cause upon

Respondent. On August 30, 2010, Respondent filed an answer in response to the order to show

cause. On September 3, 2010, the Government filed a reply. On September 13, 2010, Respondent

filed a reply to the Government’s reply.

The hearing was held on the Government’s petition on September 13, 2010, at 10:30 a.m.

The Government was represented by Assistant United States Attorney Caroline J. Clark. 

Respondent appeared and represented himself. For the reasons explained herein, the Government’s

petition to enforce the summons is granted. 

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BACKGROUND

On February 19, 2010, John Black, a Revenue Officer employed by the IRS, issued an IRS

summons to Respondent. [Declaration of Revenue Officer John Black in Support of Petition,

("Black Decl."), ¶ 3.] The IRS is conducting an investigation regarding an erroneous refund that

was paid to Respondent and Respondent’s personal tax liabilities. The summons relates to the

collection of Respondent’s unpaid assessed federal income tax liability for the tax year 2008 and

information regarding an erroneous refund paid to him. [Id.] On February 22, 2010, the IRS

personally served a copy of the summons on Respondent. [Id. at ¶ 4.] 

The summons ordered Respondent to appear before the IRS on March 11, 2010. On March

10, 2010, Respondent provided a written request to Revenue Officer Black to make an audio

recording of his appearance. [Id. at ¶ 5.] On March 11, 2010, Respondent appeared before Revenue

Officer Black and to accommodate Respondent’s request, the appearance was rescheduled until

March 30, 2010. [Id.] On March 30, 2010, Respondent appeared before Revenue Officer Black but

he did not produce any of the testimony, books, papers, records, and other data sought by the

summons. [Id.] On April 29, 2010, Respondent appeared before Revenue Officer Black in response

to a letter sent by the Office of Division Counsel of the IRS. [Id. at ¶ 6-7.] Respondent again failed

to provide any of the information requested in the summons. [Id.] To date, Respondent has not

provided the IRS with the testimony and documents requested by the summons. [Id. at ¶ 8.]

On June 30, 2010, the Government petitioned the Court to enforce the summons. On

June 30, 2010, the Court set a hearing date for this matter and ordered Respondent to show cause

why he should not be compelled to comply with the IRS summons. The IRS served this order to

show cause on Respondent on July 6, 2010 and filed proof of service with the Court on

July 12, 2010. On August 30, 2010, Respondent filed an answer in response to the order to show

cause. On September 3, 2010, the Government filed a reply. On September 13, 2010, Respondent

filed a reply to the Government’s reply. On September 13, 2010, the Court held a hearing on the

order to show cause. /// 

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DISCUSSION

Pursuant to 26 U.S.C. § 7602(a)(1), the Secretary of the Treasury may “examine any books,

papers, records, or other data which may be relevant of material” in connection with “ascertaining

the correctness of any return, making a return where none has been made, determining the liability

of any person for any internal revenue . . . or collecting any such liability.” Section 7602(a)(1)

authorizes the Secretary to issue summonses to compel persons in possession of such books, papers,

records, or other data to appear and produce the same and/or give testimony.

In order to obtain judicial enforcement of an IRS summons, the United States “must first

establish it’s ‘good faith’ by showing that the summons: (1) is issued for a legitimate purpose; (2)

seeks information relevant to that purpose.; (3) seeks information that is not already within the IRS’

possession; and (4) satisfies all administrative steps required by the United States Code.” Fortney v.

United States, 59 F.3d 117, 119 (9th Cir. 1995) (citing United States v. Powell, 379 U.S. 48, 57-58

(1964)). “The government’s burden is a ‘slight one’ and typically is satisfied by the introduction by

the sworn declaration of the revenue agent who issued the summons that Powell requirements have

been met.” Id. at 120. Once the government has made a prima facie showing that enforcement of the

summons is appropriate, the burden shifts to the Respondent to show that enforcement of the

summons would be an abuse of the court’s process. Powell, 379 U.S. at 58. The Supreme Court has

characterized respondent’s burden as a heavy one. Id.

The Government’s petition and Revenue Officer Black’s supporting declaration satisfy all

four elements of the Powell standard. First, the IRS is conducting an investigation with respect to

the collection of Respondent’s unpaid assessed federal tax liabilities for the tax year 2008 and

information regarding an erroneous refund he was paid. [Black Decl., ¶ 2.] Such an investigation is

expressly authorized by 26 U.S.C. § 7602(a). The Internal Revenue Code explicitly allows the

issuance of a summons for the purpose of determining “the liability of any person for any internal

revenue tax . . . or collecting any such liability . . .” 26 U.S.C. § 7602(a). The purpose for issuing a

summons may include “inquiring into any offense connected with the administration or enforcement

of the internal revenue laws.” 26 U.S.C. § 7602(b). Thus, the summons was issued for a legitimate

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1/ The IRS, as a delegate of the Secretary of Treasury, has the authority to issue summons

to investigate a taxpayer’s federal income tax liability. United States v. Derr, 968 F.2d 943, 945 (9th

Cir. 1992). 

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purpose. Second, Revenue Officer Black has declared in his affidavit that the information requested

by the summons may be relevant to the IRS determination of the collectibility of Respondent’s

assessed income tax liability. [Id. at ¶ 11.] Third, the IRS does not already possess the testimony,

papers, records, and other data sought by the summons issued to Respondent. [Id. ¶ 9.] Finally, the

IRS has followed and exhausted all required administrative steps, but Respondent has not complied

with the summons. [Id. at ¶ 10.] Thus, the Government has made prima facie showing that it is

entitled to judicial enforcement of the summons.

In his answer, his reply brief filed on the date of the hearing, and during oral arguments, Mr.

Cunningham argued the IRS lacks authority to issue and enforce summonses because the citation

authority has not been published in the Federal Register. Mr. Cunningham also argued the summons

violates the Paperwork Reduction Act because it does not display a valid OMB control number. 

Finally, Respondent argued he is not engaged in taxable activity. These arguments lack merit. 

Notwithstanding Mr. Cunningham’s arguments, Congress has imposed a tax on the taxable

income of every individual, whether married or single. 26 U.S.C. § 1(a) - (e). Congress has also

granted the Secretary of the Treasury broad authority to discover and enforce individual income tax

assessments.1/ 26 U.S.C. § 7601 et seq. As relevant to this action, the statute provides as follows:

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 . . . the

Secretary is authorized – 

(1) To examine any books, papers, records, or other data which may be

relevant or material to such inquiry;

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(3) To take such testimony of the person concerned, under oath, as may be

relevant or material to such inquiry.

26 U.S.C. § 7602(a) (emphasis added).

Furthermore, Congress has given the district courts jurisdiction to hear petitions to enforce

IRS summons. Pursuant to 26 U.S.C. § 7604(a), “[i]f any person is summoned under the internal

revenue laws to appear, to testify, or to produce books, papers, records, or other data, the United

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States district court for the district in which such person resides or is found shall have jurisdiction

by appropriate process to compel such attendance, testimony, or production of books, papers,

records, or other data.” (Emphasis added). Both § 7602(a) and § 7604(a) give the IRS authority to

seek information from “any person,” and there is no requirement that the IRS first demonstrate that

the individual has taxable income or is liable to pay a tax. 

The Ninth Circuit has found that the payment of federal income taxes is not voluntary. In re

Becraft, 885 F.2d 547, 548 (9th Cir. 1989) (noting that the court “need comment on the patent

absurdity and frivolity” of respondent’s argument that the Constitution does not authorize Congress

to implement an individual income tax); see also Wilcox v. Commissioner, 848 F.2d 1007, 1008 (9th

Cir. 1988) (rejecting taxpayer’s arguments that payment of taxes is voluntary and that income tax

violates the Constitution). 

The Federal Regulation Act, 44 U.S.C. §§ 1501-1511, does not require the IRS to publish the

delegation of authority to issue summonses. United States v. Saunders, 951 F.2d 1065, 1068 (9th

Cir. 1991) (Treasury Department Orders delegating the Secretary’s power to administer various

aspects of the tax laws to the Commissioner are not subject to publication under the Federal

Registration Act and therefore the failure to publish those orders does not impact the validity of the

delegation of authority). Furthermore, the Paperwork Reduction Act does not apply to IRS requests

for information in the course of its investigation. Lonsdale v. United States, 919 F.2d 1440, 1448

(10th Cir. 1990). Thus, the arguments raised by Mr. Cunningham do not relieve him of the obligation

to comply with the IRS summons.

CONCLUSION

For the reasons set forth herein, the Government’s petition to enforce the IRS summons is

GRANTED. Respondent, Noel S. Cunningham, is directed to appear before IRS Revenue Officer

John Black or a designee, on October 7, 2010, at 9:00 a.m., at the offices of the Internal Revenue

Service located at 880 Front Street, Suite 3295, San Diego, California, and to produce the documents

and give testimony as directed in the summons. The Government shall serve a copy of this Order

upon Respondent in accordance with Fed. R. Civ. P. 5, within 7 days of the date that this Order is

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served upon counsel for the Government, or as soon thereafter as possible. Proof of such service

shall be filed with the Clerk of Court as soon as practicable. 

Respondent is hereby notified that failure to comply with this Order may subject him to

sanctions for contempt of court.

IT IS SO ORDERED.

DATED: September 15, 2010

IRMA E. GONZALEZ, Chief Judge

United States District Court

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