Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-01376/USCOURTS-ca10-91-01376-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 

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PUBLISH T' FILED 

Umted States Court of' Apneals Tenth Circuit • 

IN THE UNITED STATES COURT OF APPEALS JUl 2 ·Q 1994 

FOR THE TENTH CIRCUIT 

MARY ANN TAVERY, 

Plaintiff-Appellant, 

v. 

UNITED STATES OF AMERICA, 

Defendant-Appellee. 

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ROBERT L. HOECKER 

Clerk 

No. 91-1376 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 91-S-222) 

Mary Ann Tavery, Plaintiff-Appellant, Pro Se. 

James R. Walker of Rothgerber, Appel, Powers & Johnson, Denver, 

Colorado, Amicus Curiae, for Plaintiff-Appellant Mary Ann Tavery.* 

Kevin M. Brown, Trial Attorney, Tax Division, Department of 

Justice, Washington, D.C. (Shirley D. Peterson, Assistant Attorney 

General, James A. Bruton, Acting Assistant Attorney General, and 

Gary R. Allen, Jonathan S. Cohen, and Janet Kay Jones, Attorneys, 

Tax Division, Department of Justice, Washington, D.C., and Michael 

J. Norton, United States Attorney, Denver, Colorado, on the 

brief), for Defendant-Appellee. 

Before HOLLOWAY, McKAY, and GARTH,** Circuit Judges. 

HOLLOWAY, Circuit Judge. 

* This court appointed Mr. Walker to submit a supplemental 

brief, Amicus Curiae. Ms. Tavery requested that argument time 

allotted to her be given to Mr. Walker, and he argued the cause 

for her. 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 1 
Plaintiff-appellant Mary A. Tavery appeals a summary judgment 

in favor of defendant-appellee the United States. The district 

court dismissed Ms. Tavery's complaint alleging unlawful 

disclosures of tax return information by a government attorney in 

violation of 26 U.S.C. § 6103. We affirm. 

I 

In her complaint against the United States, Ms. Tavery 

alleges that "[o]n or about April 13, 1989, United States Attorney 

John D. Steffan filed a brief in the case of The United States of 

America v. Colorado Reform Baptist Church, Inc., Civil Action 

No. 88-X-259[,] in which he violated [26] USC [§] 7431 by 

disclosing return information regarding plaintiff's Tax Returns 

without plaintiff's permission." I R. Doc. 1 at ~ 4. Rev. 

William Conklin, the husband of Ms. Tavery, was the records 

custodian of the 1 church. Ms. Tavery alleges that Mr. Steffan 

made the following statement in his brief: 

** 

[T]he Internal Revenue Service refunded $964.67, 

$2,045.63, and $651.39, all on March 8, 1989, in federal 

taxes and accruals to the Conklins. In addition, upon 

The Honorable Leonard I. Garth, Senior Circuit Judge for the 

Third Circuit, sitting by designation. 

1 

Action No. 88-X-259 of the District of Colorado was a 

proceeding commenced by a government "Petition to Enforce Internal 

Revenue Service Summons." The summons was issued by an IRS 

Revenue Agent who was conducting an examination of the Colorado 

Reform Baptist Church for the purpose of determining its 

entitlement to federal tax exempt status and its potential 

liability for federal taxes. The petition to enforce the summons 

alleged that the Agent had issued the IRS administrative summons 

of February 2, 1988; it was served that day; it called for an 

appearance with materials on February 29; and no authorized 

representative appeared in response to the summons nor were any of 

the requested records turned over pursuant to the summons. 

Petition at ~~ 5, 7 and 9. 

2 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 2 
information and belief, Mrs. Conklin/Tavery is an 

engineer earning in excess of $40,000 a year.2 

Id. at ~~ 5. Ms. Tavery further avers that the disclosure, quoted 

above, was "willful", "knowing[]" or "negligen[t]" and therefore 

"in violation of 26 U.S.C. [§) 6103 (c)- (h)." Id. at ,I 6. 

Shortly after the filing of the instant complaint, Ms. Tavery 

filed a motion for summary judgment, claiming she was entitled to 

judgment on the basis of the government's allegedly unauthorized 

disclosure. I R. Docs. 5, 6. The government filed a brief 

opposing summary judgment for Ms. Tavery and supporting a 

cross-motion for summary judgment by the government. The 

government argued, inter alia, that Mr. Steffan's disclosure of 

tax information was authorized by 26 U.S.C. § 6103(h) (4) (B) or 

(C), which provide: 

A return or return information may be disclosed in a 

Federal or state judicial or administrative proceeding 

pertaining to tax administration, but only --

* * * 

(B) if the treatment of an item reflected on such 

return is directly related to the resolution of an issue 

in the proceeding; or 

(C) if such return or return information directly 

relates to a transactional relationship between a person 

who is a party to the proceeding and the taxpayer which 

directly affects the resolution of an issue in the 

proceeding . . . 

I R. Doc. 9 at 8-11. 

In an affidavit submitted in support of the government's 

response and cross-motion, Mr. Steffan stated that the information 

2 

Although married to each other, Ms. Tavery and 

had filed separate returns- for the relevant tax year. 

Opening Brief at 5; Brief for the Appellee at 23. 

3 

Mr. Conklin 

Appellant's 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 3 
regarding Ms. Tavery's income was disclosed in Case No. 88-X-259 

in the District of Colorado in connection with the right of 

Ms. Tavery's husband, Rev. William Conklin, to court-appointed 

counsel in subsequent potential contempt proceedings. I R. 

Doc. 8, Steffan Aff. at '' 5-10. 3 The information in question 

concerning Ms. Tavery was used by the government to support its 

argument that "Mr. Conklin could not establish his inability to 

pay his own attorney's fees, and thus was not entitled to 

appointed counsel." Id. at ,I 10. The affidavit stated that Mr. 

Steffan never worked on any case in the Department of Justice in 

which Ms. Tavery was a party and that accordingly he "was not 

given access by the Internal Revenue Service to any 'tax return 

information' of Ms. Tavery. " Id. at 11 3. The affidavit also 

expressed Mr. Steffan's belief that "the Internal Revenue Service 

was [not] the source of the information regarding Ms. Tavery's 

income, occupation or tax refunds." Id. at ,I 12. Accordingly, 

the government argued that Ms. Tavery's summary judgment motion 

should be denied because " [a] genuine issue of material fact 

remains: where did Mr. Steffan get the information which he used 

in the brief filed with the Court?" I R. Doc. 9 at 7-8. 

3 

In the underlying tax proceeding, No. 88-X-259, the 

respondent, Colorado Reform Baptist Church, Inc., had been served 

with the summons as mentioned above. Rev. Conklin, in his 

capacity as custodian of records for the church, had refused to 

comply, asserting that producing the records would violate his 

constitutional rights. I R. Doc. 8, Steffan Aff. at 11 7. As a 

result, the district court sought to ascertain Rev. Conklin's 

entitlement to appointed counsel in connection with a potential 

contempt citation in such proceedings. 

4 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 4 
In her brief filed in response to the government's 

cross-motion, Ms. Tavery argued that Mr. Steffan's claimed 

ignorance as to the source of the disclosed tax information proved 

actionable negligence in the admitted disclosure. I R. Doc. 10 at 

1-2. 4 Ms. Tavery's response did not directly discuss the 

4 

The concurring opinion takes the position that the statement 

in Mr. Steffan's affidavit that he "was not given access by the 

Internal Revenue Service to any tax 'return information' of Ms. 

Tavery" (I R., Doc. 8 at ~~ 3) was alone sufficient to compel 

summary judgment for the government in light of Ms. Tavery's 

failure to introduce contrary evidence. We disagree. Mr. 

Steffan's statement, even if uncontradicted, does not establish 

that the tax information disclosed by Mr. Steffan was not "return 

information" within the meaning of § 6103. It is true, as the 

concurring opinion notes, that in Stokwitz v. United States, 831 

F.2d 893, 897 (9th Cir.), cert. denied, 485 U.S. 1033 (1988), the 

Ninth Circuit affirmed judgment for the government under § 6103 on 

the grounds that "section 6103 applies only to information filed 

with and disclosed by the IRS, and Stokwitz' tax returns were not 

obtained directly or indirectly from the IRS." Nevertheless, it 

is clear that a United States officer or employee may violate the 

statute by disclosing return information, previously released by 

the IRS, even if the information was not received from the IRS 

directly. Section 6103(a) (" [N]o officer or employee of the 

United States, shall disclose any return or return 

information obtained by him in any manner[.]") (emphasis added); 

Stokwitz, 831 F.2d at 896 n.4 ("Section 6103 applies to all who 

receive information from the IRS, directly or indirectly.") 

(emphasis added). Thus, Mr. Steffan's statement in paragraph 3 of 

his affidavit cannot support summary judgment for the government. 

We note a further statement in paragraph 12 of Mr. Steffan's 

affidavit to the effect that "I do not believe that the Internal 

Revenue Service was the source of the information regarding Ms. 

Tavery's income, occupation or tax refunds." While this statement 

does deal with the proscription of§ 6103(a) against release of 

return information by the IRS, it is a mere statement of belief 

and therefore is insufficient to support summary judgment on the 

source of disclosure issue. Under Fed. R. Civ. P. 56(e), only 

statements "made on personal knowledge" will support a motion for 

summary judgment; statements of mere belief must be disregarded. 

Automatic Radio Mfg. Co. v. Hazeltine Research, 339 U.S. 827, 831 

(1950) (affidavit in support of motion for summary judgment made 

on information and belief does not comport with Rule 56(e)); 

see also Jameson v. Jameson, 176 F.2d 58, 60 (D.C. Cir. 1949) 

("Belief, no matter how sincere, is not equivalent to 

knowledge."); Carey v. Beans, 500 F. Supp. 580, 583 (E.D. Pa. 

(Footnote continued on next page) 

5 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 5 
government's assertion that its disclosure was authorized under 

§ 6103(h) (4) (B) and (C). Id. at 1-3. In a declaration previously 

filed in support of her own motion, however, Ms. Tavery had 

pertinently stated her position "that [her] income is not related 

to the resolution of any issue in the case 88-X-259." I R. 

Doc. 5, Declaration in Support of Plaintiff's Memorandum of Law. 

The district court denied Ms. Tavery's motion for summary 

judgment and granted the government's cross-motion. I R. Doc. 14. 

The court concluded that Ms. Tavery's income necessarily "had a 

substantial bearing on Reverend Conklin's ability to pay an 

attorney" and that the government's disclosure therefore "f[e]ll 

under either [subsection] (C) or (B) [of § 61 0 3 (h) ( 4 ) ] , and 

accordingly was not inappropriate." 5 Id. at 2. The complaint and 

(Footnote continued) : 

1980) (on summary judgment, "statements [in an affidavit] prefaced 

by the phrases 'I believe' or 'upon information and belief' or 

those made upon an 'understanding' ... are properly subject to a 

motion to strike."); lOA Wright, Miller and Kane, Federal 

Practice and Procedure: Civil 2d § 2738, pp. 486-89 (1983). 

5 

We feel it would be unfair to affirm the summary judgment 

against Ms. Tavery, as the concurring opinion suggests, on the 

different theory that she did not produce evidence that the IRS 

was the source of her return information. That argument was not 

made below. "The United States' Brief in Opposition to 

Plaintiff's Motion for Summary Judgment, and in Support of Its 

Cross-Motion for Summary Judgment," I R. Doc. 9, in Proposition 

III did argue that Ms. Tavery had not shown that the information 

in question necessarily flowed through the IRS. Id. at 6. But 

from this, the government concluded only that Ms. Tavery herself 

was not entitled to summary judgment. The government's position 

on this point was that: "A genuine issue of material fact 

remains: where did Mr. Steffan get the information which he used 

in the brief filed with the Court?" Id. at 7-8. Then the 

government brief turned to the grounds on which it said the 

government was entitled to summary judgment itself. In 

Proposition IV, the brief argued that "[b]ecause all the elements 

of section 6103(h) (4) (B) and (C) have been satisfied in this case, 

(Footnote continued on next page) 

6 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 6 
action were dismissed. Ms. Tavery timely appealed the court's 

judgment. I R. Doc. 16. 

II 

While the ruling of the district judge was based on his 

conclusion that the government's disclosure came within either 

§ 6103(h) (4) (B) or (C), we conclude that the first exception, 

subsection (B), amply supports the summary judgment for the 

government. We are convinced that the challenged disclosure was 

covered by this exemption which applies "if the treatment of an 

item reflected on such return is directly related to the 

resolution of an issue in the proceeding." § 6103 (h) (4) (B) . 

Therefore we do not reach the additional issue whether the 

(Footnote continued) : 

the United States is entitled to summary judgment in its favor." 

I R. Doc. 9 at 11. Proposition V concluded the brief, arguing 

that the government's cross-motion for summary judgment should be 

granted on the good faith exception in § 7431(b). Id. at 11-12. 

Likewise the government's brief on appeal, while relying on Mr. 

Steffan's affidavit for other purposes, makes no argument that 

because Ms. Tavery failed to prove the information came from the 

IRS, that should be the basis for summary judgment for the 

government. In fact, the government's brief on appeal concludes, 

as below: "Thus, a fact question remains whether the information 

at issue falls within the statutory definition of 'return 

information.'" Brief for the Appellee at 27 n.8. 

We cannot agree to affirm the summary judgment on the basis 

that Ms. Tavery failed to produce evidence that the IRS was the 

source of her return information. Ms. Tavery was not alerted by 

the government below that such evidence had to be shown in order 

for her to avoid summary judgment. Accordingly, for us to rely on 

the absence of such evidence would, in effect, amount to entry of 

summary judgment sua sponte. This can only be done where "the 

losing party was on notice that she had to come forward with all 

of her evidence." Celotex Corp. v. Catrett, 477 U.S. 317, 326 

(1986) (emphasis added). Accord Buckingham v. United States, 998 

F.2d 735, 740 (9th Cir. 1993) ("[A] litigant must be given 

reasonable notice that the sufficiency of his or her claim will be 

in issue[.]"); Malhotra v. Cotter & Co., 885 F.2d 1305, 1310 

(7th Cir. 1989) ("When a party moves for summary judgment on 

ground A, his opponent is not required to respond to ground B -- a 

ground the movant might have presented but did not."). 

7 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 7 
information "directly relates to a transactional relationship 

between a person who is a party to the proceeding and the taxpayer 

which directly affects the resolution of an issue in the 

proceeding. " § 6103 (h) ( 4) (C) . 

6 

A 

The government argues that in the underlying Case 

No. 88-X-259 in the District of Colorado, the issue of 

Rev. Conklin's qualifying as an indigent for appointment of 

counsel under the Criminal Justice Act was an "issue in the 

proceeding" within the meaning of§§ 6103(h) (4) (B) and (C). As 

Mr. Steffan's affidavit shows, the district court ordered 

Rev. Conklin to comply with the court's previous order and the 

Internal Revenue Service summons to produce records. I R. Doc. 8, 

' 8. The order also directed, in part, that 

6 

to the extent that Rev. William Conklin seeks 

appointment of counsel to represent his interests, if 

any, in subsequent proceedings for Contempt of Court, 

Rev. Conklin is DIRECTED to appear before a Pretrial 

Ms. Tavery concentrates the arguments in her pro se appellate 

briefs on § 6103(h) (4) (C). However, she also makes generalized 

contentions such as that since "Rev. Conklin was not a party to 

the proceeding, the exceptions relied on by the lower Court cannot 

apply .... " Brief of Appellant at 7 (emphasis added). As 

noted, the district judge relied on both exceptions in his ruling. 

Ms. Tavery also says that the "United States Attorney 

violated the wrongful disclosure statute as alleged in the 

original complaint," id. at 7, where she alleged that her "income 

is not directly related to the resolution of any issue in the 

proceeding." Complaint,~~ 9, I R. Doc. 1 at 2. This position was 

similar to the one she took below in support of her motion for 

summary judgment. As noted, she there stated "that [her] income 

is not related to the resolution of any issue in the case 

88-X-259." I R. Doc. 5. On this record we will not construe 

Ms. Tavery's pro se briefs as conceding that the exception in 

§ 6103(h) (4) (B) applies to excuse the government's disclosures 

because of her focusing her appellate arguments on the other 

exception in§ 6103(h) (4) (C). 

8 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 8 
Services Officer . . . and to provide, under oath, full 

and complete disclosure of his assets, income and 

liabilities, on or before April 14, 1989; it is further 

ORDERED that financial an[d] other information 

submitted in connection with Rev. Conklin's application 

for appointed counsel shall be filed under seal and 

remain under seal until further order of the court; it 

is further 

ORDERED that the United States shall address the 

issue of Rev. Conklin's right to appointed counsel in a 

brief to be filed on or before April 14. 1989 .... 

I R. Doc. 9, Govt. Ex. A at 3-4 (emphasis added). 

It was in that brief, ordered by the court to be filed, that 

government counsel made the disclosure concerning Ms. Tavery's 

approximate income and the tax refunds to the Conklins. The 

affidavit of Mr. Steffan concluded that he made the disclosure in 

good faith, honestly believing that the statement about Ms. Tavery 

was authorized by§ 6103(h) (4) (B). The government thus argues 

that even assuming the material disclosed was "return 

information," which it does not concede, the disclosure was 

prompted by the district court's order that the government address 

Rev. Conklin's eligibility for court-appointed counsel in a 

potential civil contempt proceeding. Brief for the Appellee at 

17-18. 

We are persuaded by the government's argument that in these 

circumstances the disclosure came within§ 6103(h) (4) (B). In the 

underlying case, Rev. Conklin's eligibility as an indigent for 

appointment of counsel was made an "issue in the proceeding" by 

the district judge's order for the government brief to address the 

issue. Because of a possible contempt proceeding in which 

Rev. Conklin could face loss of liberty, the court wanted to have 

9 

.. 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 9 
information to determine Rev. Conklin's possible eligibility for 

appointment of counsel, i.e. whether he was financially unable to 

obtain adequate representation, 18 U.S.C. § 3006A(a). See Walker 

v. McLain, 768 F.2d 1181, 1183 (lOth Cir. 1985), cert. denied, 474 

u.s. 1061 (1986). 

The scope of the relevant inquiry on the financial inability 

issue is broad. See United States v. Barcelon, 833 F.2d 894, 897 

& n.5 (lOth Cir. 1987) (detailing numerous factors to be 

considered, including "the availability of income to the defendant 

from other sources such as a spouse .... "). The factors to 

consider include money sent to the applicant by his mother, Souder 

v. McGuire, 516 F.2d 820, 821 (3d Cir. 1975), and transfers in 

trust. United States v. Schmitz, 525 F.2d 793, 794 (9th Cir. 

1975) (opinion of Chambers, Chief Judge) . "Financial inability 

includes an inquiry into whether there is available to the 

defendant funds for his defense from other sources such as family, 

friends, trusts, estates, or defense funds." United States v. 

Martinez-Torres, 556 F. Supp. 1275, 1279 (S.D.N.Y. 1982). Under 

this broad test, we hold that the district court correctly decided 

that Ms. Tavery's income and tax refunds were relevant to the 

issue of Rev. Conklin's eligibility for appointment of counsel, 

and that the government's disclosure of this information was 

therefore permissible under § 6103(h) (4) (B). See Lebaron v. 

United States, 794 F. Supp. 947, 951 (C.D. Cal. 1992) 

(§ 6103(h) (4) (B) permitted disclosure of a party's tax information 

"because it directly related to the discovery issue before the 

10 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 10 
Magistrate Judge."). 

B 

We briefly address the argument by Special Counsel that "[i]n 

order to fall within th[e] § 6103(h) (4)] exception, the third 

party's tax return information must have a 'direct relationship' 

to the resolution of the taxpayer's tax liability[,]" a 

relationship that was clearly lacking in the potential contempt 

proceedings at issue here. Brief of Special Counsel at 7 

(emphasis in original). In support, Special Counsel relies on and 

quotes the following portion of the legislative history of 

§ 6103 (h) (4): 

The disclosure of a third party return in a tax 

proceeding (including the United States Tax Court) will 

be subject to the same item and transaction tests 

described above, except that such items and transactions 

must have a direct relationship to the resolution of an 

issue of the taxpayer's liability. 

Only such part or parts of the third party's return or 

return information which reflects the item or 

transaction will be subject to disclosure both before 

and in a tax proceeding. Thus, the return of a 

third-party witness could not be introduced in a tax 

proceeding for the purposes of discrediting that witness 

except on the item and transaction grounds stated above. 

Brief of Special Counsel at 7 (quoting S. Rep. No. 94-938, 94th 

Cong. 2d Sess. (1976), reprinted in 1976 U.S. Code Cong. & Adm. 

News 3439, 3755) (emphasis in brief). 

While the foregoing legislative history may provide some 

support for Special Counsel's argument, the plain language of 

§ 6103 itself does not. Instead, with respect to IRS disclosures 

of return information in judicial or administrative proceedings 

"pertaining to tax administration", § 6103(h) (4) (B) provides that 

such information may be disclosed when the treatment of an item 

11 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 11 
reflected therein 11may be related to an issue in the 

proceeding [ . J 11 (Emphasis added.) 7 Nowhere does the statute limit 

disclosure to instances where taxpayer liability is in issue and 

the disclosed information relates thereto. To the extent tension 

may exist between the broad but plain language of the statute and 

7 

Section 6103(b) (4) defines 11 tax administration 11 in part as 

(i) the administration, management, conduct, 

direction, and supervision of the execution and 

application of the internal revenue laws or related 

statutes (or equivalent laws and statutes of a State) 

and tax conventions to which the United States is a 

party, . . 

Consistent with the foregoing provision, we have held that 11 [t]he term 'tax administration' is to be interpreted broadly. 11 

First Western Government Securities. Inc. v. United States, 796 

F.2d 356, 360 (lOth Cir. 1986) (holding that 11 tax administration11 

for purposes of § 6103(h) (4) (C) includes IRS audit). See also 

Rueckert v. IRS, 775 F.2d 208, 210-12 (7th Cir. 1985) ( 11 tax 

administration11 includes investigation of state revenue agents' 

potential conflicts of interest); United States v. Mangan, 575 

F.2d 32, 40 (2d Cir.) ( 11 tax administration11 includes criminal 

prosecution for mail fraud, inter alia, not involving 

determination of defendant's tax liability), cert. denied, 439 

U.S. 931 (1978); Davidson v. Brady, 559 F. Supp. 456, 461 

(W.D. Mich. 1983) ( 11 tax administration11 includes criminal 

sentencing hearing not involving determination of tax liability), 

aff'd, 732 F.2d 552 (6th Cir. 1984); see also Black's Law 

Dictionary 1204 (6th ed. 1990) (defining 11 proceeding 11 as including 11 all possible steps in an action from its commencement to the 

execution of judgment 11 ). But see Mallas v. United States, 993 

F.2d 1111, 1121-23 (4th Cir. 1993) (criticizing First Western and 

interpreting 11 administrative proceeding 11 to exclude tax 

investigations and audits for purposes of applying 

§ 6103(h) (4) (C)); McLarty v. United States, 741 F. Supp. 751, 

754-55 (D. Minn 1990) (interpreting 11 tax administration 11 to 

exclude pro hac vice hearing involving attorney application to 

represent defendant in criminal tax case, thus viewing hearing as 

separate from underlying tax matter for purposes of applying 

§ 6103(h) (2) and (4)), summ. judgment granted. on recons., 784 

F.2d 1401 (D. Minn. 1991). 

For purposes of this case, we believe the term 11 tax 

proceeding 11 , as defined in the statute, is broad enough to 

encompass a potential contempt proceeding against Rev. Conklin in 

connection with the enforcement proceeding concerning the tax 

exempt status of Rev. Conklin's church. 

12 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 12 
its legislative history, we follow Judge Friendly's application of 

"'the canon of construction of the wag who said, when the 

legislative history is doubtful, go to the statute.'" Mangan, 575 

F.2d at 40 (rejecting claim that disclosure under § 6103 is 

limited to cases involving a determination of taxpayer liability, 

and quoting Greenwood v. United States, 350 U.S. 366, 374 (1956)). 

See also Rueckert, 775 F.2d at 210-12i Davidson, 559 F. Supp. at 

461. 

We thus conclude that Ms. Tavery's return information was 

properly disclosed pursuant to § 6103(h) (4) (B) because of its 

demonstrated relationship to the underlying tax administration 

proceeding as indicated by the district judge's order requiring 

the government to brief the issue of Rev. Conklin's eligibility 

for appointment of counsel. The relevance of the return 

information to the underlying proceeding brings the government's 

disclosure of the information within the parameters of 

§ 6103 (h) (4) (B) • 

III 

The exceptions in § 6103 are stated in the disjunctive. See 

United States v. Hashimoto, 878 F.2d 1126, 1129 n.5 (9th Cir. 

1989) . Since we are convinced that the exception in 

§ 6103(h) (4) (B) applies here, we need go no further. 

AFFIRMED. 

13 

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Tavery v. United States - No. 91-1376 

GARTH, Circuit Judge, concurring: 

The majority has concluded that it should affirm the 

district court's summary judgment in favor of the Government. I 

totally agree with that result. However, I would reach that 

conclusion without ever addressing or relying upon the disclosure 

exceptions of 26 u.s.c. § 6103(h) (4). Rather, I am persuaded 

that, as a threshold matter and pursuant to summary judgment 

principles, the record cannot support Ms. Tavery's allegation 

that Mr. Steffan, the Government attorney, disclosed "return 

information" within the intendment of 26 u.s.c. § 6103. This 

being so, Ms. Tavery cannot prevail. 

I. 

Ms. Tavery alleged in her complaint that Mr. Steffan, the 

United states attorney identified in her submissions, disclosed 

"return information regarding [Ms. Tavery's] Tax Returns without 

[her] permission," and that such disclosure was made in violation 

of § 6103. I R Doc. 1 at ~~ 4, 6. The plain language of § 

6103(b) (2) indicates that the statutory provision, which accords 

confidentiality to "return information," is intended to act as a 

general prohibition only against public disclosure of tax 

information filed by the taxpayer with the IRS and disclosed by 

the IRS. 26 U.S.C. § 6103(b) (2) (defining "return information" 

to include element that it be "received by, recorded by, prepared 

by, furnished to, or collected by the Secretary with respect to a 

return***."); see Stokwitz v. United States, 831 F.2d 893, 897 

Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 14 
(9th Cir.) (holding that "section 6103 applies only to 

information filed with and disclosed by the IRS"), cert. denied, 

485 U.S. 1033 (1988); see also First Western Gov't Sees. v. 

United States, 796 F.2d 356, 358 (lOth Cir. 1986) ("Return 

information requires some nexus between the data or information 

obtained and the furtherance of obligations controlled by Title 

26. 11 ). 

A. 

Summary judgment is appropriate only "if the pleadings, 

depositions, answers to interrogatories, and admissions on file, 

together with the affidavits, if any, show that there is no 

genuine issue as to any material fact and that the moving party 

is entitled to a judgment as a matter of law." Fed.R.Civ.P. 

56(c); Anderson v. Liberty Lobby, 477 U.S. 242, 247-48 (1986); 

accord Clemmons v. Bohannon, 956 F.2d 1523, 1525 (lOth Cir. 1992) 

(en bane). Statements of fact in support of, or in opposition, 

to a motion for summary judgment must be made under oath, and 

must be admissible in evidence. Fed.R.Civ.P. 56(e) . 1 The 

1. Fed. R. Civ. P. 56(e) requires that: 

Supporting and opposing affidavits shall be made on personal 

knowledge, shall set forth such facts as would be admissible 

in evidence, and shall show affirmatively that the affiant 

is competent to testify to the matters stated therein. 

Sworn or certified copies of all papers or parts thereof 

referred to in an affidavit shall be attached thereto or 

served therewith. The court may permit affidavits to be 

supplemented or opposed by depositions, answers to 

interrogatories, or further affidavits. When a motion for 

summary judgment is made and supported as provided in this 

rule, an adverse party may not rest upon the mere 

allegations or denials of the adverse party's pleadings, but 

the adverse party's response, by affidavits or as otherwise 

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failure of a party resisting a summary judgment motion to 

contradict, specifically and affirmatively, the sworn fact 

statements of the moving party will result in judgment for the 

moving party. Id. 

B. 

In support of her motion for summary judgment, Ms. Tavery 

made only the following declaration: 

1. I am Mary Ann Tavery, the plaintiff in the aboveentitled action. 

2. I did not give the United states Attorney the 

permission to disclose my return information in [Mr. 

Steffan's brief] which is attached to the complaint. 

3. It is my opinion that my income is not related to the 

resolution of any issue in the case 88-X-259. 

4. I was not a party to the litigation in case 88-X-259. 

5. I filed married-filing separately for the years 1986 to 

present. 

I R. Doc. 6. 

In opposition to Ms. Tavery's motion for summary judgment 

and in support of its cross motion, the Government submitted the 

affidavit of Mr. Steffan. In that affidavit, Mr. Steffan, under 

oath, averred that he "was not given access by the Internal 

Revenue Service to any tax 'return information' of Ms. Tavery." 

I R. Doc. 8 at ~ 3. The affidavit submitted by the Government 

denying that Mr. Steffan obtained the disclosed information from 

the IRS created a genuine issue of material fact, thereby 

precluding summary judgment in favor of Ms. Tavery. Lujan v. 

provided by this rule, must set forth specific facts showing 

that there is a genuine issue for trial. If the adverse 

party does not so respond, summary judgment, if appropriate, 

shall be entered against the adverse party. 

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National Wildlife Fed'n, 497 u.s. 871, 888 (1990) ("where the 

facts specifically averred by the [party opposing summary 

judgment] contradict facts specifically averred by the movant, 

the motion must be denied."). 

In order to resist the Government's cross motion for summary 

judgment, Ms. Tavery then had to "go beyond the pleadings and by 

her own affidavits, or by the 'depositions, answers to 

interrogatories, and admissions on file,' designate 'specific 

facts showing that there [was] a genuine issue for trial.'" 

Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Rule 

56(e)); accord Clemmons, 956 F.2d at 1525. Her sworn averment in 

response to the Government's properly-supported cross motion had 

to contain more than "mere allegations or denials." 

Fed.R.Civ.P.56(e). That is because the object of Rule 56(e) "is 

not to replace conclusory allegations of the complaint with 

conclusory allegations of an affidavit." Lujan, 497 u.s. at 888. 

"Rather, the purpose of Rule 56 is to enable a party who believes 

there is no genuine dispute as to a specific fact essential to 

the other side's case to demand at least one sworn averment of 

that fact before the lengthy process of litigation begins." Id. 

at 888-89. 

c. 

Ms. Tavery failed to present any countervailing evidence 

that would have created a dispute of material fact over the 

source of the information disclosed by Mr. Steffan. Her only 

offering on this point was a facetious, "Maybe a little bird told 

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him. 112 Ms. Tavery could not survive summary judgment in favor 

of the Government because she did nothing more than raise "some 

metaphysical doubt as to the material facts.'" Clemmons, 956 

F.2d at 1525 (quoting Matsushita Elec. Indus. Co. v. Zenith 

Radio, 475 u.s. 574, 586 (1986)). 

Although Mr. Steffan's affidavit shed no light on the actual 

source of the disclosed information, the Government, in order to 

2. Ms. Tavery replied to the Government's motion for summary 

judgment in an unsworn reply as follows: 

The government argues that the unlawful disclosure is 

not an unlawful disclosure under 26 USC 7431 and 26 USC 6103 

because the United states Attorney claims that he did not 

get the $40,000 amount of income from the IRS but from 

somewhere else. Maybe a little bird told him. The fact is, 

the United States Attorney at the very least doesn't know 

where he gleaned the information which shows he acted in a 

negligent fashion and his negligence would lead to an 

assessment against the government for damages under 26 USC 

7431. In the Tenth Circuit the only thing the plaintiff has 

to show is simple negligence. See Chandler v. [United 

States, 687 F. Supp. 1515 (D. Utah 1988)]. The United 

States Attorney claims he knew how much money Mary Ann 

Tavery made in a year but didn't know she filed married 

filing separately. The fact that he knew the amount of 

money Mary Ann Tavery made from some undetermined source but 

didn't know that Mary Ann Tavery filed separate returns 

clearly shows simply negligence under Chandler, supra. 

There is only issue for the Court to decide. Can the 

United states Attorney make a specific unlawful disclosure 

and escape from a charge of simple negligence by claiming he 

didn't get the information from the IRS when he clearly can 

state no other source for his information? 

Assuming arguendo that the United States attorney did 

not get this information from the IRS; then where did he get 

it? If he got it from some individual who he was not able 

to identify in his affidavit; he still made an unlawful 

disclosure because that individual whether or not he worked 

for the IRS would not have legal authority to publish 

Tavery's return information. Two wrongs do not make a 

right? 

* * * I R. Doc. 10 at 1-2. 

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succeed on its cross motion for summary judgment, did not have to 

disprove Ms. Tavery's allegations; it was sufficient that Mr. 

Steffan in his sworn affidavit affirmatively and specifically 

denied that he had been given access by the IRS to Ms. Tavery's 

"return information." See Windon Third Oil and Gas v. Federal 

Deposit Ins., 805 F.2d 342, 346 (lOth Cir. 1986) ("The moving 

party's burden cannot be enhanced to require his proof of a 

negative; that is, not only is there no evidence in the record, 

but plaintiff's evidence need not be disproved."), cert. denied, 

480 u.s. 947 (1987) 0 

Summary judgment for the Government was appropriate because 

Ms. Tavery did not establish by affidavit or any other 

affirmative sworn evidence that the source of the information 

disclosed by Mr. Steffan was the IRS. Fed. R. Civ. P. 56(e); 

Anderson, 477 u.s. at 257 ("plaintiff must present affirmative 

evidence in order to defeat a properly supported motion for 

summary judgment. This is true even where the evidence is likely 

to be within the possession of the defendant, as long as the 

plaintiff has had a full opportunity to conduct discovery."); see 

also Thornton v. United States, 493 F.2d 164, 167 (3d Cir. 1974) 

(holding that unsworn statements in a brief do not constitute 

evidence) • 

Because the information disclosed by Mr. Steffan was never 

shown to be "return information," (a burden which Ms. Tavery 

failed to carry) the district court never had to reach the 

question of whether the exceptions of§ 6103(h) (4) shielded the 

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Government from liability for disclosure of that information. 

See Stokwitz, 831 F.2d at 896 ("Nothing in [§ 6103] or its 

legislative history suggests an intention to protect a taxpayer's 

financial data from any potential risk of disclosure except that 

arising from the filing of the taxpayer's return with the IRS."); 

see also United States v. Bacheler, 611 F.2d 443, 446 (3d Cir. 

1979) (discussing legislative history). The district court 

nevertheless did reach that issue; but, as I have pointed out, 

did so unnecessarily and gratuitously. 

II. 

In its October 15, 1991 order denying Ms. Tavery's motion 

for summary judgment and granting the cross motion of the 

Government, the district court never found that the information 

disclosed by Mr. Steffan had emanated from the IRS. The district 

court merely assumed that the allegation raised in Ms. Tavery's 

complaint was correct, and that the information disclosed by Mr. 

Steffan was, in fact, "return information." Those assumptions 

fueled the need for the district court to discuss the exceptions 

to disclosure found in 26 u.s.c. § 6103(h) (4). However, in 

making those assumptions, the district court completely 

disregarded the Supreme Court's instructions that: 

It will not do to "presume" the missing facts because 

without them the affidavits would not establish the injury 

that they generally allege. That converts the operation of 

Rule 56 to a circular promenade: plaintiff's complaint 

makes general allegation of injury; defendant contests 

through Rule 56 existence of specific facts to support 

injury; plaintiff responds with affidavit containing general 

allegation of injury, which must be deemed to constitute 

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averment of requisite specific facts since otherwise 

allegation of injury would be unsupported (which is 

precisely what defendant claims it is). 

Lujan, 497 u.s. at 889. 

In reviewing the district court's order of summary judgment, 

we, of course, view the case in the same manner as the district 

court. Conaway v. Smith, 8530 F.2d 789, 792 (lOth Cir. 1988). 

Hence, we examine the affidavits and all other materials which 

were before the district court so as "to determine whether any 

genuine issue of material fact pertinent to the ruling remains, 

and if not, whether the substantive law was correctly applied." 

Id. (citing Fed. R. Civ. P. 56). 

In responding to the Government's cross motion for summary 

judgment, Ms. Tavery relied solely on the unsupported and 

conclusory allegations contained in her pleadings. She offered 

no documentary or testimonial evidence based on personal 

knowledge, containing facts which would be admissible at trial, 

to substantiate her claim that the information disclosed was 

"return information" within the meaning of § 6103. Ms. Tavery 

could not defeat the Government's properly supported summary 

judgment cross motion because she presented no evidence, let 

alone significant probative evidence, contradicting Mr. Steffan's 

affidavit or tending to support her own motion for summary 

judgment. See Conaway, 853 F.2d at 792-93 (indicating that a 

party's sole reliance on verified complaint would be insufficient 

to satisfy the standards set forth by the Supreme Court in 

Celotex, 477 U.S. 317, and Anderson, 477 u.s. 242, "especially 

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Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 21 
when the allegations contained in the pleading are merely 

conclusory."). 

The district court therefore was correct in granting summary 

judgment for the Government, but wrong in assuming as a matter of 

law that the information disclosed by the Government was "return 

information," thereby requiring application of the exceptions of 

§ 6103 (4). 

The majority takes an opposing view. It believes that "it 

would be unfair to affirm the summary judgment against Ms. 

Tavery," as I suggest, "on the different theory that she did not 

produce evidence that the IRS was the source of her return 

information." Ante at __ (maj. op. typescript at 6 n.5). The 

majority's stated reason for not affirming summary judgment in 

favor of the Government on this basis is that the Government did 

not raise this argument before the district court, and therefore 

"Ms. Tavery was not alerted by the government below that such 

evidence had to be shown in order for her to avoid summary 

judgment." Ante at __ (maj. op. typescript at 7 n.5). 

Contrary to the majority's position, Ms. Tavery clearly was 

on notice that, in order to survive the Government's cross motion 

for summary judgment, she had to come forward with sufficient 

countervailing evidence that the IRS was the source of the 

disclosed information. Ms. Tavery was provided with such notice 

by the Government's submissions to the district court both in 

opposition to her motion for summary judgment and in support of 

its own cross motion for summary judgment. 

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The Government argued before the district court that Ms. 

Tavery had not shown that the disclosed information was "[t]ax 

'return information,' i.e., that the source of the information 

was the IRS; as a result, she is not entitled to summary 

judgment." In its brief to the district court, the Government 

also noted that the affidavit of Mr. Steffan, "attached to the 

United states' Response and Cross-Motion, establishes that the 

information concerning Ms. Tavery did not flow through the IRS, 

but rather was obtained by Mr. Steffan in some other, 

independent, way." I.R. Doc. 9 at 6 (emphasis added). Not only 

was Ms. Tavery well aware of the Government's position that the 

disclosed information was not "return information" because it had 

not come from the IRS, her unsworn reply to the Government's 

cross motion for summary judgment focused on this precise point. 

Indeed, she identified as the "only issue for the Court to 

decide" the issue of whether Mr. Steffan could "escape from a 

charge of simple negligence by claiming he didn't get the 

information from the IRS when he clearly can state no other 

source for his information? 113 

Once the Government properly supported its cross motion for 

summary judgment with the affidavit of Mr. Steffan, Ms. Tavery 

could "not rest upon mere allegations or denials, but [had to] 

set forth specific facts showing a genuine issue for trial, 

relying upon the types of evidentiary materials contemplated by 

Rule 56." John Hancock Mut. Life Ins. Co. v. Weisman, _ F.3d __ 

3. See supra note 2. 

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Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 23 
1992 WL 275385 *2 (lOth Cir. June 22, 1994) (citing Fed. R. Civ. 

P. 56(e)). Specifically, Ms. Tavery was required to satisfy the 

standards for affidavits set forth in Rule 56(e) in order to 

survive the Government's properly supported cross motion for 

summary judgment. See Conaway, 853 F.2d at 792 ("Rule 56(e) 

requires that the affidavit be based on personal knowledge, 

contain facts which would be admissible at trial, and show that 

the affiant is competent to testify on the matters stated 

therein."). 

Irrespective of the fact that a pro se litigant is held to 

less stringent standards than lawyers with respect to procedural 

infractions, see Meade v. Grubbs, 841 F.2d 1512, 1526 (lOth Cir. 

1988}, cert. denied, 493 U.S. 1059 (1990}, Ms. Tavery failed to 

offer any evidence whatsoever that the IRS was the source of the 

information, or to refute the unequivocal assertion of Mr. 

Steffan that he had not been given access by the IRS to Ms. 

Tavery's "return information." Under such circumstances, the 

district court should have entered summary judgment in favor of 

the Government on the basis that there was no evidence that the 

information disclosed was "return information" within the 

intendment of § 6103. 

The cases cited by the majority for a contrary result are 

inapposite to its position. See Ante at (maj. op. typescript 

at 7 n.5). In contrast to the instant case, those cases--

Celotex, 477 U.S. 317 (1986); Buckingham v. United States, 998 

F.2d 735 (9th Cir. 1993}, and Malhotra v. Cotter & Co., 885 F.2d 

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1305 (7th Cir. 1989) -- did not involve cross motions for summary 

judgment. 

In Buckingham, the Ninth circuit reversed a district court 

which, after hearing the government's motion for summary judgment 

and without notice to the government, had sua sponte granted 

summary judgment for Buckingham, the non-moving party, despite 

the existence of genuine issues of material fact. 998 F.2d at 

742. Unlike the sibuation in Buckingham, here Ms. Tavery had 

notice and actually responded to the Government's cross motion 

for summary judgment, but did so without furnishing any 

affirmative evidence that would have created a genuine issue of 

material fact precluding summary judgment for the Government. 

Compare id. 

The majority's reliance on the Seventh Circuit case of 

Malhotra also is misplaced. If anything, Malhotra supports the 

proposition I have espoused here -- that Ms. Tavery's failure to 

offer evidentiary materials to rebut Mr. Steffan's affidavit was 

fatal to her claim that the Government had disclosed "return 

information." In Malhotra, the defendant employer in an 

employment discrimination case had urged summary judgment on 

procedural grounds, but had supported its summary judgment motion 

with a substantive affidavit that set forth facially 

nondiscriminatory reasons for its denial of two of numerous 

promotions sought by the plaintiff employee. Because the 

employee failed to offer any evidentiary materials to rebut the 

employer's affidavit, the Seventh Circuit held that summary 

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judgment was properly granted in favor of the employer on the two 

failure-to-promote claims refuted in the affidavit. Malhotra, 

885 F.2d at 1311. 

The majority cites Malhotra for the proposition that "'when 

a party moves for summary judgment on ground A, his opponent is 

not required to respond to ground B a ground the movant might 

have presented but did not.'" Ante at ___ (maj. op. typescript 

at 7 n.5) (citing Malhotra, 885 F.2d at 1310). That language was 

used by the Malhotra court in explaining why the employer in that 

case should not have been granted summary judgment on the 

employee's six remaining claims of discrimination in promotion, 

which the employer had failed to refute in its affidavit. 

Because the employer had not furnished an affidavit on these 

remaining six claims, the Seventh Circuit held that the employee 

was not required to produce evidence rebutting "a ground the 

movant might have presented but did not." Id. at 1310. 

Finally, the majority quotes language from the supreme Court 

case of Celotex to bolster its position that Ms. Tavery was not 

required to furnish evidence on the issue of whether the IRS was 

the source of the disclosed information because the Government 

had not explicitly made that argument in its cross motion for 

summary judgment. See ante at ___ (maj. op. typescript at 6-7 

n.5). The majority apparently reads in isolation the Celotex 

court's observation that summary judgment sua sponte is 

appropriate "'so long as the losing party was on notice that she 

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Appellate Case: 91-1376 Document: 01019283591 Date Filed: 07/20/1994 Page: 26 
had to come forward with all of her evidence.'" Id. (quoting 

Celotex, 477 u.s. at 326) (emphasis added by majority). 

In Celotex, the Court was not dealing with the issue we face 

here. The issue in Celotex was whether a district court properly 

could grant summary judgment on the motion of a defendant when 

that motion was not supported by affirmative evidence negating 

the plaintiff's wrongful-death claims. The Celotex Court held 

that 

the plain language of Rule 56(c) mandates the entry of 

summary judgment, after adequate time for discovery and upon 

motion, against a party who fails to make a showing 

sufficient to establish the existence of an element 

essential to the party's case, and on which that party will 

bear the burden of proof at trial. 

477 u.s. at 322. Because the parties in Celotex had already 

conducted discovery, the Court determined that the plaintiff 

could not seriously claim that she was not on notice that summary 

judgment could be entered against her. Noting that "district 

courts are widely acknowledged to possess the power to enter 

summary judgments sua sponte, so long as the losing party was on 

notice that she had to come forward with all of her evidence~" 

the Court reasoned that "[i]t would surely defy common sense to 

hold that the District Court could have entered summary judgment 

sua sponte in favor of [the defendant], but that [the 

defendant's] filing of a motion requesting such a disposition 

precluded the District Court from ordering it." Id. at 326. 

In the instant case, the Government unquestionably was 

entitled to summary judgment on its cross motion. The majority 

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and I are in full agreement on that point. Unlike the majority, 

however, I am convinced that the district court relied on the 

wrong grounds in entering summary judgment in favor of the 

Government. "In the review of judicial proceedings the rule is 

settled that if the decision below is correct, it must be 

affirmed, although the lower court relied upon a wrong ground or 

gave a wrong reason." Helvering v. Gowran, 302 U.S. 238, 245 

(1937), reh'g denied, 302 u.s. 781 (1938}; accord Robert-Gay 

Enters., Inc. v. State Corp. Comm'n of Kansas, 753 F.2d 857, 862 

n.5 (lOth Cir. 1985}. Accordingly, I would affirm the district 

court's order granting summary judgment on the Government's cross 

motion, even though the district court relied on the wrong 

grounds. 

I, therefore, respectfully concur in the result reached by 

the majority, but I do so without reaching any issue of 

disclosure as provided by 26 U.S.C. § 6103(h) (4). 

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