Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-86-01864/USCOURTS-ca10-86-01864-0/pdf.json

Parties Involved:
Church of World Peace
Appellant
William T. Conklin
Appellant
A. Jerome Simpson
Appellee
United States of America
Appellee

Document Text:

PUBLISH 

FILED 

UNITED STATES COURT OF APPEALS 

United States Court of Appeals 

Tench Cir:ult 

FOR THE TENTH CIRCUIT 

UNITED STATES OF AMERICA and ) 

A. JEROME SIMPSON, Revenue ) 

Agent, Internal Revenue Service, ) 

) 

Petitioners/Appellants, ) 

Cross-Appellees, ) 

) 

v. ) 

) 

CHURCH OF WORLD PEACE and ) 

WILLIAM T. CONKLIN, ) 

) 

Respondents/Appellees, ) 

Cross-Appellants. ) 

JUL 0 3 1989 

ROBERT L. l:IOECKER 

Clerk 

Nos. 86-1863 

86-1864 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. NO. 84-X-236) 

Submitted on the briefs: 

Robert N. Miller, United States Attorney, Denver, Colorado, Roger 

M. Olsen, Assistant Attorney General, Michael L. Paup, Charles E. 

Brookhart and Murray S. Horwitz, Attorneys, Tax Division, 

Department of Justice, Washington, D.C., for Petitioners/ 

Appellants/Cross-Appellees. 

Richard F. Thurston, Denver, Colorado, for Respondents/Appellees/ 

Cross-Appellants. 

Before ANDERSON, BARRETT and BRORBY, Circuit Judges. 

ANDERSON, Circuit Judge. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

Appellate Case: 86-1864 Document: 01019569324 Date Filed: 07/06/1989 Page: 1 
assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

I. 

This case involves an appeal and a cross-appeal from an order 

of the United States District Court for the District of Colorado, 

denying motions by the appellants, United States of America (hereinafter "United States" or "IRS") and Internal Revenue agent A. 

Jerome Simpson, and by the cross-appellants, Church of World Peace 

("Church") and the Reverend William Conklin. The district court's 

denial of those motions was the culmination of a lengthy dispute, 

which originated with Agent Simpson's service of a summons on 

Reverend Conklin on April 4, 1984. The summons required the 

production of numerous books, records and papers of the Church. 1 

1 Specifically, the summons sought the production of the 

following: 

"books of accounts, bank records, bank statements, including cancelled checks, and records 

of receipts and disbursements with information 

indicating the source and nature of such 

receipts and purposes for the disbursements. 

All corresponding files, data and records 

relating to any and all assets owned or used 

by the Church ••• and the manner in which· 

such assets were acquired. Records regarding 

the nature and specific extent of all 

religious activities conducted by the Church 

to include but not limited to a list of all 

members of the Sacerdotal Order of the Church 

• • • and the manner by which such members are 

selected. Records to indicate which members, 

if any, have taken a vow of poverty with 

records of all, if any, of the assets or 

income turned over or to be turned over to the 

Church. All records and information on the 

(footnote continued on next page) 

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Appellate Case: 86-1864 Document: 01019569324 Date Filed: 07/06/1989 Page: 2 
When Reverend Conklin failed to comply with the summons, the 

United States and Agent Simpson, in accordance with 26 u.s.c. 

§§ 7402(b) and 7604(a), filed a Petition to Enforce Internal 

Revenue Summons in the district court. The Petition asserted that 

the "statutory and procedural requirements of 26 u.s.c. § 7605 and 

Treasury Regulations § 301.7605-l(b) have been complied with 

II The Petition further stated that "[t]he testimony and 

records sought in the summons are necessary to determine the tax 

liability of the Church of World Peace and to verify its right to 

tax exempt status by determining whether the Church of World Peace 

is engaging in activities incompatible with its tax exempt 

status." 2 R. Vol. I, tab 1 at 2, 3. 

Attached to the Petition was an affidavit of Agent Simpson, 

which explained more specifically why the various papers and 

documents sought in the summons were needed. Essentially, Agent 

Simpson averred that those papers and documents were needed to 

(footnote continued from previous page) 

specific activities conducted by such members 

to the extent that such activities are 

attributed to the religious purpose or creed 

of the church. All records and information 

concerning any contracts and agreements 

entered into by the.church with the Pastor, 

Reverend William Conklin. Documents and 

records related to the background of your 

ministers and trustees to include a precis of 

curriculum completed by the ordained ministers 

who are members of the church and the circumstances pertaining to their ordination." 

R. Vol. I, tab 1, Ex. A. 

2 Although the 

United States and 

Conklin testify. 

remains at issue. 

original summons requested "testimony," the 

Agent Simpson no longer seek to have Reverend 

Accordingly, only the production of records 

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Appellate Case: 86-1864 Document: 01019569324 Date Filed: 07/06/1989 Page: 3 
determine "the organization's continued qualification for exemption under 26 u.s.c. § 50l(c)(3) and its classification as a 

church." Id. at 6. Additionally, Simpson's affidavit asserted 

that "(a]ccounting records and supporting documentation are 

requested for the purpose of examining any possible liability for 

Unrelated Business Income Tax under 26 U.S.C. §§ 511-514." Id. at 

5. 

After a hearing, and after considering the Pe~ition and Agent 

Simpson's affidavit, as well as the Reply to the district court's 

Order to Show Cause filed by the Church and Reverend Conklin, 

along with accompanying materials, the district court entered its 

Final Judgment and Enforcement Order granting the Petition to 

Enforce Summons. After both the district court and this court 

denied a motion for a stay of enforcement of the summons, Reverend 

Conklin complied with the summons and turned over the requested 

documents. 

On appeal of the order enforcing the summons, this court "set 

aside in its entirety" the order of enforcement. United States v. 

Church of World Peace, 775 F.2d 265, 268 (10th Cir. 1985). We 

held that the United States failed to prove, and the district 

court failed to find, that the "extent necessary" language of 26 

u.s.c. § 7605(c) had been satisfied.3 On remand, the Church and 

3 26 U.S.C. § 7605(c) provided in pertinent part: 

"(c) Restriction on examination of churches--

* * * 

(2) Books of account. No examination of 

the books of account of an organization which 

(footnote continued on next page) 

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Reverend Conklin filed a "Motion for Return of Records, Expunging 

of Files, and Prohibiting Use of Information Obtained from 

Records," seeking to have all records and copies thereof returned 

by the IRS, to have all information derived from those records 

expunged from the IRS' files, and seeking to prohibit the use of 

any such information by the IRS. 

In response, the United States indicated that it had returned 

all original documents to the Church and Reverend Conklin, but had 

retained "copies of a limited portion of the originals.'' Response 

to Respondents' Motion, R. Vol. I, tab 13 at 2. It sought "the 

opportunity to address the 'extent neces~ary' language of Section 

7605(c) and have the summons enforced~ .. " Id. Attached to the 

(footnote continued from previous page) 

claims to be a church • • • shall be made 

except after the giving of notice as provided 

in this subparagraph and except to the extent 

necessary (i) to determine the initial or 

continuing qualification of the organization 

under section 50l(c)(3); (ii) to determine 

whether the organization qualifies as one, 

contributions to which are deductible ..• ; 

(iii) to obtain information for the purpose of 

ascertaining or verifying payments made by the 

organization to another person in determining 

the tax liability of the recipient, such as 

payments of salaries, wages, or other forms of 

compensation; or (iv) to determine the amount 

of tax, if any, imposed by the Code upon such 

organization • • • • In any examination of a 

church or convention or association of 

churches for the purpose of determining unrelated business income tax liability pursuant 

to such notice, no examination of the books of 

account of the organization shall be made 

except to the extent necessary to determine 

such liability." 

Section 7605 has been superseded by 26 u.s.c. § 7611, which also 

places various restrictions on church tax inquiries and investigations. The parties apparently agree that section 7611 does not 

apply to this case. 

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Appellate Case: 86-1864 Document: 01019569324 Date Filed: 07/06/1989 Page: 5 
Response was an affidavit of Revenue Agent Ronald Cunningham, who 

replaced Agent Simpson in the investigation of the Church. The 

IRS asserts that the affidavit "meticulously satisfies the burden 

of the 'extent necessary' language of Section 7605(c) by explaining in detail the necessity of each of the categories of documents 

sought in the original summons ••• " Id. at 3. The IRS sought 

enforcement of the summons "only to the extent of the copied 

documents now in its possession." Id.4 The district court denied 

both motions, from which denials all parties appeal. 

II. 

The United States argues that, because the Church and 

Reverend Conklin have complied with the summons "as narrowed," the 

question of the enforceability of the summons is moot. Alternatively, the United States argues that the district court erred in 

refusing to enforce the "narrowed" summons and in failing to rule 

that the United States had satisfied the "extent necessary" 

language of section 7605(c) with respect thereto. The Church and 

Reverend Conklin argue that, while the United States' appeal may 

indeed be moot because it already has obtained the relief sought 

in its "narrowed" summons, the Church's and Reverend Conklin's 

appeals are not moot because they still seek to have all copies of 

documents returned and all information gleaned from those 

4 It is unclear from the IRS' Response whether it believed it 

satisfied the "extent necessary" language vis-a-vis the original 

summons, or merely vis-a-vis the smaller group of documents in its 

possession. It is clear, however, that the IRS sought enforcement 

of the summons only to the extent of the documents it retained. 

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Appellate Case: 86-1864 Document: 01019569324 Date Filed: 07/06/1989 Page: 6 
documents expunged from the IRS files. 5 They further argue that 

the district court did not err when it denied summary enforcement 

of the summons, but that it did err in refusing to order the 

return of all copies of documents in the IRS' possession, the 

expunging of information from the IRS files, and the suppression 

of the use of any information obtained from the summons. To this 

last argument, the United States responds that it is premature to 

seek suppression of the information prior to the attempted use of 

that information by the United States. 

We agree with the United States that the appeals in this case 

are moot. While we note that our earlier opinion in this case did 

not address the issue, most courts hold that compliance with an 

IRS summons renders any appeal of a district court enforcement 

order moot. See, ~' United States v. Orlowski, 808 F.2d 1283, 

1287 (8th Cir. 1986), cert. denied, 482 U.S. 927 (1987); United 

States v. Sherlock, 756 F.2d 1145, 1147 (5th Cir. 1985); United 

States v. Porter, 711 F.2d 1397, 1400 (7th Cir. 1983); United 

States v. Trails End Motel, Inc., 657 F.2d 1169, 1170-71 (10th 

Cir. 1981) (per curiam); United States v. Arthur Andersen & Co., 

623 F.2d 720, 725 (1st Cir.), cert. denied, 449 U.S. 1021 (1980); 

United States v. Deak-Perera Int'l Banking Corp., 610 F.2d 89 (2d 

Cir. 1979); but see Gluck v. United States, 771 F.2d 750, 754 (3d 

Cir. 1985) ("the surrendering of the documents to the IRS does not 

end the controversy between the parties because, if we find that 

5 The Church and Reverend Conklin assert that "[t]he government 

is using the information to harass persons affiliated with the 

Church as well as in the continuing audit of the Church." Brief 

for the Appellees-Cross-Appellants at 2. 

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Appellate Case: 86-1864 Document: 01019569324 Date Filed: 07/06/1989 Page: 7 
the summons were illegal, we can still fashion a remedy--

prohibition of the use of the summoned documents--to afford [the 

taxpayer] effective relief."). As we recognized in Trails End 

Motel, taxpayers who have complied with a summons "may adequately 

protect their asserted interest by challenging the IRS procedure 

if and when the government attempts to make further use of the 

information obtained by the summonses." Trails End Motel, 657 

F.2d at 1170; see also United States v. Kis, 658 F.2d 526, 533 

(7th Cir. 1981) (noting the "well-established rule that questions 

of suppression should not be considered until the time when the 

Government seeks to use that evidence."), cert. denied sub nom, 

Salkin v. United States, 455 U.S. 1018 (1982). While the Church 

and Reverend Conklin assert in their brief that "[t]he government 

is using the information [gained from the summons] to harass 

persons affiliated with the Church as well as in ·the continuing 

audit of the Church," their mere allegation is insufficient to 

establish a current case or controversy concerning suppression of 

the information obtained by the summons. 6 

We recognize that this case differs slightly from cases cited 

above involving the mootness of appeals from district court 

enforcement orders. In this case, there has already been an 

appeal of the district court enforcement order, in which this 

court did not find the appeal moot, but instead set aside the 

6 In addition to the allegation in the brief of the Church and 

Reverend Conklin, the record contains those parties' Motion for 

Order for Return of Records, etc., which makes the same allegation 

that the IRS is in fact using the information obtained from the 

summons to audit and "harass" persons and entities associated with 

the Church. 

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Appellate Case: 86-1864 Document: 01019569324 Date Filed: 07/06/1989 Page: 8 
enforcement order.7 Nonetheless, the question in this appeal 

relates to the enforceability of the summons as narrowed by the 

IRS to include only certain of the documents originally sought. 

It is undisputed that the Church and Reverend Conklin have 

complied with that narrowed summons. Thus, the rule regarding the 

mootness of an appeal regarding a summons with which the taxpayer 

has complied applies. 

For the foregoing reasons, the appeal of the United States 

and Agent Simpson is dismissed as moot. The cross-appeal of the 

Church and Reverend Conklin is also dismissed as moot, without 

prejudice to their right to file a timely suppression motion at 

such time as the United States seeks to use the information 

obtained by means of the summons. 

7 Despite the failure of the previous panel opinion to find the 

appeal moot, it does appear that the mootness rule was established 

in this circuit. See Trails End Motel, 657 F.2d 1169. 

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