Opinion ID: 52516
Heading Depth: 2
Heading Rank: 1

Heading: Petition to Quash

Text: Anderson essentially argues that the district court erred in dismissing his petition to quash. Anderson maintains that the government did not satisfy its burden of proof and, specifically, the government did not follow proper administrative steps for the issuance of the summons, and so the summons was illegal. Anderson asserts that the government did not establish that he was a taxpayer or that Agent Kuebler was vested with the delegated authority to issue the summons.2 Anderson also contends that the district court’s findings were unsupported. We review a district court’s conclusions of law de novo. MiTek Holdings, Inc. v. Arce Eng’g Co., Inc., 89 F.3d 1548, 1554 (11th Cir. 1996) (citation omitted). By contrast, because we assume that Anderson’s objections to the magistrate judge’s report and recommendation preserved this issue on appeal, we will review the court’s factual-findings for clear error. La Mura v. United States, 2 Although these two claims were not formally raised until the motion to amend the petition to quash, Anderson did mention these points before the magistrate judge during the hearing on the petition to quash and the government did not object at that time. Thus, to the extent that these new claims were raised below, in light of Anderson’s pro se status, we address them here. See Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 2003) (per curiam) (“Pro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed.” (citation omitted)). 10 765 F.2d 974, 981, n.10 (11th Cir. 1985) (citations omitted). “[T]he Secretary of the Treasury, or the IRS as his designee, may ‘examine any books, papers, records, or other data which may be relevant or material to . . . ’ ascertaining the correctness of any return and may issue summonses to those in ‘possession, custody, or care’ thereof to appear and produce them to the IRS.” La Mura, 765 F.2d at 978-79 (quoting 26 U.S.C. § 7602). “The IRS’[s] power to investigate under section 7602 has been described as ‘broad’ and ‘expansive.’” Id. (citations omitted). The power to investigate is not without limit, however. “To obtain enforcement of a summons, the IRS must demonstrate (1) that the investigation will be conducted pursuant to a legitimate purpose, (2) that the inquiry will be relevant to that purpose, (3) that the information sought is not already in the IRS’[s] possession and, (4) that it has taken the administrative steps necessary to the issuance of a summons.” Id. (citing United States v. Powell, 379 U.S. 48, 57-59, 85 S. Ct. 248, 255 (1964)). Once the government satisfies these requirements, the burden then shifts to the party contesting the summons to “disprove one of the four elements of the government’s prima facie showing or convince the court that enforcement of the summons would constitute an abuse of the court’s process.” Id. at 979-80 (citations omitted). A summons for records or 11 documents maintained by a third-party is issued for a legitimate purpose so long as the IRS is investigating potential criminal violations of the tax code and has not already referred the matter to the Department of Justice for criminal prosecution. Id. The government’s burden of showing relevance is “slight.” Id. at 981. Information is relevant if it “‘might throw light upon the correctness of the taxpayer’s return.’” Id. (citation omitted). The government must establish that it has a “‘realistic expectation rather than an idle hope that something might be discovered.’” Id. (citation omitted). A “taxpayer” is defined as “any person subject to any internal revenue tax.” 26 U.S.C. § 7701(a)(14). We have noted that § 7601 “gives the Internal Revenue Service a broad mandate to investigate and audit ‘persons who may be liable’ for taxes.” La Mura, 765 F.2d at 979. Upon review of the record and the parties’ briefs, we find no reversible error in the district court’s conclusion that the government properly issued the summons under Powell, even assuming that Anderson is correct that the court’s factualfinding as to his place of employment is unsupported by the record. The summons here was issued for a legitimate reason. An IRS agent testified at a hearing on the petition to quash that the IRS’s investigation of Anderson was merely civil in nature at this point, and his file had not been referred to the Department of Justice 12 for criminal investigation or prosecution. See id. at 980 n.9 (noting “that the IRS may not issue a summons if it has referred the case to the Department of Justice for criminal prosecution”). Moreover, this inquiry was relevant to the IRS’s civil investigation of potential federal tax liability from 2000 through 2003, given that Anderson admitted that he had not filed federal tax returns during that time period, the summons sought monthly statements from those years, and it is undisputed that the IRS did not possess the information sought in the summons at the time of the summons’s issuance. Also, the IRS had taken the administrative steps necessary to the issuance of a summons. Anderson “may be” liable for taxes, because he admitted to working in New York and has not filed federal tax returns since 2000. See id. at 979. In addition, IRS agents are vested with the authority to issue third-party summonses. The Secretary of Treasury delegated this power to the IRS, see id. at 978-79, and the IRS, in turn, re-delegated this power to its agents. See 26 C.F.R. § 301.7701-9(c); 26 C.F.R. § 301.7701-9(b); IRS Delegation Order No. 4 Rev. 22, 1997 WL 33479254 (Aug. 18, 1997) (Commissioner of IRS re-delegating authority to internal revenue agents). Because the government satisfied its prima facie showing under Powell, and Anderson failed to prove otherwise or to show that the summons was an abuse of the court’s process, the district court properly denied the 13 petition to quash.