Opinion ID: 186229
Heading Depth: 2
Heading Rank: 2

Heading: Discovery and an Evidentiary Hearing

Text: 22 Judicial Watch next claims it is entitled to discovery and to an evidentiary hearing regarding the IRS's motive for the audit because it has develop[ed] facts from which a court might infer a possibility of some wrongful conduct by the Government. Kis, 658 F.2d at 540. In response the IRS, quoting SEC v. McGoff, 647 F.2d 185, 194 (D.C.Cir.1981), characterizes Judicial Watch's allegations as no more than diffuse speculations [that] do not establish the exceptional circumstances necessary to take this case out of the general rule against discovery when resisting enforcement of an administrative summons. We review the district court's decision to deny Judicial Watch discovery and an evidentiary hearing only for an abuse of discretion. See United States v. Gertner, 65 F.3d 963, 969 (1st Cir.1995) (decision to withhold an evidentiary hearing in a summons enforcement proceeding reversible only if the appellant demonstrates an abuse of the trial court's substantial discretion); Brune v. IRS, 861 F.2d 1284, 1288 (D.C.Cir.1988) (district court's decision to allow or deny discovery is reviewable only for abuse of discretion). 23 In this circuit discovery regarding the motivation for an audit is permitted only when the movant has shown extraordinary circumstances, McGoff, 647 F.2d at 193, that take him out of the class of the ordinary taxpayer, whose efforts at seeking discovery would, if allowed universally, obviously be too burdensome to the IRS. United States v. Fensterwald, 553 F.2d 231, 231-32 (D.C.Cir.1977); see United States v. Exxon Corp., 628 F.2d 70, 77 n. 7 (D.C.Cir.1980). Judicial Watch has not established such extraordinary circumstances. Indeed, as we saw in Part II. A. above, it has not established anything out of the ordinary about the motivation of the IRS. 24 Judicial Watch urges us to follow the Seventh Circuit in requiring that it establish only the possibility of an improper motive before it may obtain further discovery. But that would not avail it. What Judicial Watch calls the possibility standard, the Seventh Circuit has explained, is significantly more stringent than [the standard that must be met by] a party opposing a motion for summary judgment, Kis, 658 F.2d at 543; that is, Judicial Watch would have to have evidence sufficient to raise a genuine issue of fact material to whether the audit is an act of political retaliation. Again as we have seen, Judicial Watch has proffered no evidence of that sort. 25 In any event, the district court did not merely, as Judicial Watch states in bold type and italics,  refus[e] it all discovery and an evidentiary hearing.  Rather, the district court itself required the IRS to produce affidavits, see Fensterwald, 553 F.2d at 232-33 (holding the District Judge should allow some measure of discovery, preferably by specific interrogatories ... or perhaps by an overall affidavit made by a ... responsible and knowledgeable official as to all relevant details of how taxpayer ... was selected for this audit); the court also required the IRS to produce all documents relating to its motivation and purpose for the audit — which came to more than 1,000 pages — and it held a hearing at which it heard arguments regarding the materials produced. Although Judicial Watch was not allowed to propound its own requests for further discovery, the decision whether to permit party-directed discovery is within the sound discretion of the district court. See id. at 233 (requiring only discovery procedures deemed appropriate by the district court). Nor is Judicial Watch entitled to an evidentiary hearing at which to cross-examine the various IRS agents and officials who submitted sworn declarations at the request of the court. If the taxpayer cannot develop even the evidence necessary to [suggest an audit was improper], then an evidentiary hearing would be a waste of judicial time and resources. Kis, 658 F.2d at 540. In sum, the district court did not abuse its discretion in denying Judicial Watch further discovery and another hearing.