FILED U.S. COURT OF AP P EALS E LEVEN T HC IRC U IT JUNE 30, 2008 THOMAS K. KAH

N CLERK [ P UB L I S H]

I N THE UN I TE D STATE S C OU RT OF APPE ALS F O R T H E E L E V E N T H C IR C U IT

________________________ N o. 08- 10283 N on -A rgum entC al endar

________________________ D. C . Do c k e tNo . 0 7 - 0 0 2 2 9 - C V- F T M- 3 4 - DN F U N I T E D S T A T E S O F A M E R I C A , P e titio n e r - A p p e lle e , v ersu s R O B E R T S . M O R S E , R e s p o n d e n t- A p p e lla n t.

________________________ A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f orthe M i ddl e D i s tr i c tof F l or i da

_________________________ ( Ju n e 30, 2008) B efo re C A RN E S , B A R K E T T an d P R Y O R , C i rcu i tJu d g es. P E R C U R I A M: R o b er t S . M o rs e, a tax p ay erp ro ce ed in g p ro se , ap p ea ls th e d istrict co u rt’s2

gr a ntof ape t i t i on t o e nf

or c e a n I R S s um m ons pur s ua ntt o 26 U . S . C . §§ 7402( b) a nd 7604( a ) . M or s e c ont e nds tha tthe di s tr i c tc ourte rr e d i n gr a nt i ng the gove rnm e nt ’ s pe t i t i on t o e nf or c e a n I R S s um m ons t o pr ovi de t e s t i m ony a nd pr oduc e doc um e nt s i n or de rt o a s s e s s hi s t a x l i abi l i ty . T he gove rnm e ntr e s ponds th a t M o r s e ’s a r g u m e n ts a r e f r iv o lo u s a n d s e e k s to im p o s e s a n c tio n s o n M o r s e .

I. M or s e c ont e nds tha tthe di s tr i c tc ourtc l e a r l y e rr e d by gr a nt i ng the gove rnm e nt ’ s pe t i t i on t o e nf or c e a n I R S s um m ons . H e a r gue s tha tthe I R S di d not ha ve al e gi t i m a t e purpos e i n s e e ki ng the s um m ons a nd tha tthe I R S w a s w i thout au th o r ity to s e e kto e n f

o r c e th e s u m m o n s b e c au s e th e au th o r ity o n ly e x te n d e d to i nv es t i gat i on s w here the t axpaye r f ai l ed t o fi l e at ax re turn. “ A n o rderenforci ng an I R S s um m ons w i l l notbe r e ve r s e d unl e s s c l e a r l y e rr one ous . ” U ni t e d S t a t e s v. M e d lin , 9 8 6 F .2 d 4 6 3 , 4 6 6 ( 1 1 th C ir . 1 9 9 3 ) . U nde rthe S i xt e e nth A m e ndm e nt , “ C ongr e s s s ha l l ha ve pow e rt o l a y a nd c ol l e c tt a xe s on i nc om e s , f r om w ha t e ve rs our c e de r i ve d, w i thoutapport i onm e nt a mo n g th e s e v e r a l s t a t e s , a n d w i th o u tr e g a r d t o a n y c e n s u s o re n u me r a t i o n . ” U . S. C ons t . A m e nd. X V I . T he I R S i s c ha r ge d w i th a dm i ni s t e r i ng a nd e nf or c i ng C on gres s’ po w ert o l ayand col l ec tt axes , i ncl ud i ng on i ncom e f rom w hat ever source deri ved. M adi son v . U ni t ed S t at es , 75 8 F . 2d 57 3, 57 4 (11 th C i r. 19 85 ).3

T he I R S i s author i z e d t o i s s ue as um m ons f orthe purpos e of

“ a s c e rt a i ni ng the corre ctness of any r eturn, m aki ng a r eturn w here no ne has been m ade, de t e rm i ni ng the l i abi l i ty of a ny pe r s on f

ora ny i nt e rna l r e ve nue t a x . . . , or c o lle c tin g a n y s u c h liab ility .” 2 6 U .S .C . § 7 6 0 2 ( a ) . A s u m m o n s m a y b e is s u e d to t a ke a ny t e s t i m ony of

the pe r s on c onc e rne d a nd t o s um m on the pe r s on l i abl e f or the t a x t o pr oduc e books , pape r s , r e c or ds , orothe rda t atha tm a y be r e l e va ntt o the i nq ui ry . Id. § 7 60 2(a) (2). N o agency s um m on s m aybe i ss ued i f there i s aJust i ce D e p a rtm e n t r e f

e rr a l in e f

f e c t w ith r e s p e c t to th e p e r s o n in v o lv e d . I d . § 7 6 0 2 ( d ) ( 1 ) . I n or de rt o s uc c e e d i n e nf or c i ng as um m ons , the I R S m us ts how f our e le m e n ts : “th a t th e in v e s tig a tio n w ill b e c o n d u c te d p u r s u a n t to ale g itim a te purpos e , tha tthe i nqui ry m a y be r e l e va ntt o the purpos e , tha tthe i nf orm a t i on s oughti s nota l r e a dy w i thi n the [ I R S ’ s ] pos s e s s i on, a nd tha tthe a dm i ni s tr a t i ve s t e p s r e q u i r e d b y th e Co d e h a v e b e e n f o l l o w e d . ” U n i t e d St a t e s v . Po w e l l , 3 7 9 U . S. 48, 57–58, 85 S . C t . 248, 255 ( 1964) . T he I R S m a y s a t i s f y i t s m i ni m a l bur de n by p r e s e n tin g th e s w o rn a f f id a v it o f th e a g e n t w h o is s u e d th e s u m m o n s a tte s tin g to th e s e f a c ts . M e d lin , 9 8 6 F .2 d a t 4 6 6 . O n c e th e s h o w in g r e q u ir e d b y P o w e ll is m a d e , “th e b u r d e n s h if ts to th e p a rty co n testin g th e s u m m o n s to d isp ro v e o n e o f th e f o u r e lem en ts o f th e g o v er n m en t’ s p r im af a c ie s h o w in g o rc o n v in c e th e c o u rt th a t e n f o r c e m e n t o f

th e s u m m o n s w o u ldThis Court has held that dec isions of Unit B of the f ormer F ifth Circuit are binding 1 prec edent. SeeStein v. Rey nolds Sec., Inc., 667 F .2d 33, 34 (11th Cir. 1982).

4 c ons t i tut e a n abus e of

the c ourt ’ s pr oc e s s . ” L aM ur av. U ni t e d S t a t e s , 765 F . 2d 974, 979–80 ( 11th C i r . 1985) . T he t a xpa y e rdoe s notm e e thi s bur de n by c ont e s t i ng the unde r l y i ng va l i di ty of the a s s e s s m e ntbe c aus e the va l i di ty of the as se ss m entm ayno tbe chal l enged i n a sum m on s e nforcement proce edi ng . U ni t ed S t at es v. H arper, 66 2 F . 2d 33 5, 33 6 (5th C i r. U ni tB N ov . 19 81 ). 1 R e v e n u e O f

f ic e rC . L e w is s ta te d in h e rd e c la r a tio n th a t: ( 1 ) s h e is i nve s t i ga t i ng the c ol l e c t i on of M or s e ’ s t a x l i abi l i t i e s f orthe y e a r s 1996, 1997, a nd 1998, w hi c h i s apr ope rpurpos e f ori s s ui ng the s um m ons , a nd tha tthe s um m ons m a t e r i a l m a y be r e l e va ntt o the i nve s t i ga t i on; ( 2) the s um m one d m a t e r i a l s a r e not a l r e a dy i n the pos s e s s i on of the I R S ; ( 3) a l l a dm i ni s tr a t i ve s t e ps r e qui r e d f orthe i s s ua nc e of

the s um m ons ha ve be e n f ol l ow e d; a nd ( 4) no J us t i c e D e pa rtm e nt r e f e rr a l i s i n e f

f e c tf o rM o r s e . Th i s d e c l a r a t i o n i s s u f f i c i e n tt o ma k e o u tap r i ma fa ci e c as e f

or enforci ng the sum m on s. S ee P ow el l , 37 9 U . S . at57 –5 8, 85 S . C t . at 2 5 5 ; M e d lin , 9 8 6 F .2 d a t 4 6 6 . M o r s e ’s c h a lle n g e to th e u n d e r ly in g ta x liab ility is no tsuff i ci entt o rebutthe go vernm ent ’ s pri m a f ac i e c as e, se e H arper, 66 2 F . 2d at 3 3 6 , so h e h as fai l ed t o est ab l i sh th atth e p et i t i o n sh o u l d b e d en i ed . A cco rd i n g l y, w e a f f irm .5 II. T he gove rnm e ntha s m ove d f ors a nc t i ons a ga i ns tM or s e f orm a i nt a i ni ng a f r i vol ous appe a l , c ont e ndi ng tha tthe i s s ue s r a i s e d by M or s e on appe a l a r e f r i vol ous a nd tha the ha d be e n w a rne d aboutr a i s i ng the m . B e f or e the di s tr i c tc ourta nd a ga i n on appe a l , M or s e ha s c ont e nde d tha tthe I R S l a c ke d author i ty t o i s s ue the sum m on s on the grou nd thathe i s nota t axpaye r and hi s i ncom e, w hi ch w as d e r iv e d f r o m e m p lo y m e n t in th e p r iv a te s e c to r , is n o t s u b je c t to f e d e r a l ta x a tio n . In i t s a m ended o rderenforci ng the sum m on s, the di stri ctcourtw arned M orse that h is a r g u m e n ts th a t th e I R S la c k e d p o w e rto is s u e as u m m o n s a n d to in v e s tig a te h im w e r e “ utt e r l y w i thoutm e r i t , ” a nd thi s C ourtha s l ong he l d tha tthi s type of a r gum e nti s f

r i vol ous , s e e M a di s on, 758 F . 2d a t574 ( “ T he a s s e rt i on tha tthe T r e a s u ry D e p a rtm e n t a n d I n te rn a l R e v e n u e S e rv ic e h a v e n o p o w e ro v e rth is appe l l a nta nd thi s s ubj e c tm a tt e ri s f r i vol ous . C ongr e s s ha s the pow e rt o l a y a nd col l ec tt axes and m ay‘ l ayand col l ec tt axes on i ncom e, fr om w hat eversource deri ved, w i tho utappo rt i on m entam on g the se vera l st at es . ’ ” ( ci t at i on s om i tt ed)) . F e d e r a l R u le o f

A p p e lla te P r o c e d u r e 3 8 p r o v id e s th a t “[ i]f ac o u rt o f

ap p e a ls de t e rm i ne s tha ta n appe a l i s f r i vol ous , i tm a y , a f

t e ras e pa r a t e l y f

i l e d m ot i on or no t i ce fr om the courtand reas on abl e opp ortun i ty t o res po nd , aw ar d j ustdam ages a nd s i ngl e ordoubl e c os t s t o the appe l l e e . ” F e d. R . A pp. P . 38. T he gove rnm e nt6

s e p a r a te ly f

ile d am o tio n f

o rs a n c tio n s , w h ic h g a v e M o r s e af u ll o p p o rtu n ity to re spon d. H i s r es po nse w as si m pl y t o rea ss erthi s f ri vo l ou s argum ent s. In H ys l ep v . U n ite d S ta te s , 7 6 5 F .2 d 1 0 8 3 ( 1 1 th C ir . 1 9 8 5 ) , w e s ta te d th a t “th o s e w h o w o u ld l i t i ga t e i n thi s c i r c ui ta r e puton not i c e tha tthe y m a y be e xpe c t e d t o ha ve s a nc t i ons i m po se d agai nstthem i f they c on t i nu e t o rai se these sort s of f ri vo l ou s c on t ent i on s. ” Id . at1 0 8 4

– 8 5 . W h i l e w e are reluctant t o i m p o se san ct i o n s o n p ro se l i t i g an t s, W oo ds v. IR S , 3 F . 3d 40 3, 40 4 (11 th C i r. 19 93 ), w e have i m po se d sanct i on s on p ro s e litig a n ts in c e rta in s itu a tio n s , s e e K in g v . U n ite d S ta te s , 7 8 9 F .2 d 8 8 3 , 8 8 4 ( 1 1 th Ci r . 1 9 8 6 ) ( i mp o s i n g s a n c t i o n s o n ap r o s e l i t i g a n tw h o w a s w a rn e d th a th i s c l a i ms w er e m er i t l es s) ; se e a l so B on fi gl i o v . N ug ent , 98 6 F . 2d 13 91 , 13 94 –9 4 (11 th C i r. 1993) ( i m pos i ng s a nc t i ons on apr o s e l i t i ga ntw ho w a s a l s o a n a tt orne y ) ; P ol l a r d v. C o m m ’ r, 8 1 6 F . 2 d 6 0 3 , 6 0 5 (1 1 th C i r. 1 9 8 7 ) (i m p o si n g san ct i o n s o n a p ro se litig a n t w h o h a d p r e v io u s ly b r o u g h t f r iv o lo u s ta x c la im s ) . B e c aus e M or s e ’ s a r gum e nt s a r e f r i vol ous a nd he ha d be e n w a rne d about r a i s i ng the m , w e c onc l ude tha ts a nc t i ons a r e appr opr i a t e . I n or de rt o de t e rm i ne the a m ountof

s a nc t i ons , w e di r e c tthe gove rnm e ntt o f i l e w i thi n f

ourt e e n da y s of

the d a t e o f th i s o p i n i o n as u p p l e me n tt o i t s mo t i o n s e tt i n g f o rth i t s c o s t s , th e t i me r e c o r d s o f

its a tto rn e y s , a n d ap p r o p r ia te a f f id a v its e s tab lis h in g r e a s o n ab le h o u r ly r a te s f o rth o s e a tto rn e y s . M o r s e m a y f ile ar e s p o n s e to th is s u p p le m e n t w ith in7

se ven d ay s f

rom the dat e he i s s erved w i th the supp l em ent . W e w i l l i ss ue a s e pa r a t e or de rs e tt i ng the a m ountof the s anc t i on. AF F I RME D; MOT I ON F OR S AN CT I ON S GR AN T E D.