Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-02891/USCOURTS-ca8-06-02891-0/pdf.json

Parties Involved:
Internal Revenue Service
Appellee
Robert L. Schulz
Appellant
United States
Appellee

Document Text:

1

The Honorable Richard G. Kopf, United States District Judge for the District

of Nebraska. 

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-2891

___________

Robert L. Schulz, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* District of Nebraska.

United States; Internal Revenue *

Service, Terry Cox, * [UNPUBLISHED]

*

Appellees. *

___________

Submitted: September 4, 2007

Filed: September 13, 2007

___________

Before WOLLMAN, COLLOTON, and BENTON, Circuit Judges.

___________

PER CURIAM.

Robert Schulz appeals the district court’s1

 order declining to quash a third-party

summons issued to PayPal by the Internal Revenue Service (IRS). We affirm.

The district court determined that the IRS issued the summons within its

authority under 26 U.S.C. § 7602, as interpreted in United States v. Powell, 379 U.S.

48, 57-58 (1964). According to Powell, to obtain enforcement of summons, the IRS

Appellate Case: 06-2891 Page: 1 Date Filed: 09/13/2007 Entry ID: 3351269
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“must 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 [IRS’s] possession, and that the administrative steps required by the

[Internal Revenue] Code have been followed.” Id. A court, however, “may not permit

its process to be abused,” and “[s]uch an abuse would take place if the summons had

been issued for an improper purpose, such as to harass the taxpayer or to put pressure

on him to settle a collateral dispute, or for any other purpose reflecting on the good

faith of the particular investigation.” Id. We conclude that the district court did not

clearly err in its determinations under Powell, and that Schulz did not meet his burden

to show that the IRS abused the summons process or lacked good faith. See United

States v. Norwood, 420 F.3d 888, 892 (8th Cir. 2005); United States v. Dynavac, Inc.,

6 F.3d 1407, 1414 (9th Cir. 1993). 

We also hold that the district court did not abuse its discretion in denying

Schulz’s request for an evidentiary hearing. See United States v. Nat’l Bank of S.D.,

622 F.2d 365, 367 (8th Cir. 1980) (per curiam). A district court has discretionary

authority to deny a hearing in summons enforcement proceeding, and an evidentiary

hearing is necessary only where substantial deficiencies in summons proceedings are

raised by party challenging summons. Id.

Finally, we conclude that Schulz’s constitutional arguments challenging the

IRS’s authority to enforce the tax laws are without merit. 

Accordingly, the judgment is affirmed. See 8th Cir. R. 47B.

______________________________

Appellate Case: 06-2891 Page: 2 Date Filed: 09/13/2007 Entry ID: 3351269