Opinion ID: 484309
Heading Depth: 3
Heading Rank: 2

Heading: Prima Facie Showing of Good Faith

Text: 33 The affidavits of the IRS contain identical statements concerning the purposes of Revenue Canada's investigation: 34 By letter dated January 3, 1984, the Government of Canada, through Mr. Philip Pinkus, Director, Provincial and International Relations Division, Revenue Canada, made a request for information to be used to determine the correct tax liability of [the taxpayers], under the laws of Canada. The Canadian taxing authorities' investigation of [the taxpayers] is a criminal investigation, preliminary stage. 35 In its briefs and at oral argument, the government asserted that the burden is on the taxpayers to show that the criminal investigation in Canada has reached a stage analogous to a referral to the Department of Justice. They must do so without the benefit of discovery unless they can allege specific facts that raise a sufficient doubt concerning the department's purpose. United States v. Samuels, Kramer & Co., 712 F.2d 1342, 1347-48 (9th Cir.1983); United States v. Church of Scientology, 520 F.2d 818, 823-24 (9th Cir.1975). 36 The government can establish its prima facie case for enforcement of a domestic summons with an affidavit from the agent who issued the summons stating that the requirements of the good faith doctrine have been met: (1) the investigation is being conducted for a legitimate purpose; (2) the inquiry is relevant to the purpose; (3) the information sought is not already within the service's possession; and (4) the required administrative steps have been followed. Id. at 821; see also Powell, 379 U.S. at 57-58, 85 S.Ct. at 254-55; Samuels, Kramer & Co., 712 F.2d at 1344-45. The government conceded at oral argument that its affidavits in domestic cases usually state that there has been no referral for prosecution, and affidavits quoted in reported decisions bear this out. See, e.g., Moutevelis v. United States, 727 F.2d 313, 314 (3d Cir.1984). We hold that in order to establish its prima facie case by affidavit, the IRS must make an affirmative statement that the investigation has not reached a stage analogous to a Justice Department referral. The service is in the best position to determine this: it can consult with Canada's competent authority and can be expected to have greater familiarity with Canadian administrative procedures. We do not believe that requiring the IRS to make such a statement will unduly restrict the service's summonsing authority or impede enforcement of summonses. Moreover, this requirement avoids the anomaly of placing a burden of proof upon the taxpayer and then denying access to what may be the very information needed to meet that burden. United States v. Stuckey, 646 F.2d 1369, 1373-74 (9th Cir.1981), cert. denied, 455 U.S. 942, 102 S.Ct. 1436, 71 L.Ed.2d 653 (1982). 37 Although we are convinced that disputes such as presented here are justiciable, we are also mindful of the importance of promptly disposing of challenges to summonses. See United States v. Kis, 658 F.2d 526, 535-36 (7th Cir.1981), cert. denied, 455 U.S. 1018, 102 S.Ct. 1712, 72 L.Ed.2d 135 (1982). Delay may defeat the purpose for which the summons is sought. By requiring the affidavit to contain information establishing that the summonses could be obtained under domestic law, the delay encountered in appeals such as this one would be avoided. Ambiguous statements about the purpose of an investigation invite challenges and lead to delay, as this case illustrates. 38 We conclude that it was clear error to find that the affidavits made a prima facie showing of legitimate purpose. The court on remand should allow the IRS the opportunity to amend its affidavits to include the required statement, see United States v. Lincoln First Bank, 45 A.F.T.R.2d (P-H) 80-942, 80-944 to 80-945 (S.D.N.Y.1980).