Opinion ID: 537733
Heading Depth: 2
Heading Rank: 2

Heading: Delegation to Independent Auditors

Text: 48 The district court's power to entertain summons enforcement actions arises from 26 U.S.C. Sec. 7402(b), which reads as follows: 49 If any person is summoned under the internal revenue laws to appear, to testify, or to produce books, papers, or other data, the district court of the United States for the district in which such person resides or may be found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, or other data. 50 It is clear that  'an Internal Revenue Service summons can be enforced only by the courts.'  Coopers & Lybrand, 550 F.2d at 620 (quoting Bisceglia, 420 U.S. at 146, 95 S.Ct. 915, 43 L.Ed.2d 88). Nevertheless, courts often farm out decision-making. Complicated factual disputes are routinely submitted to court-appointed experts under Fed.R.Evid. 706, to special masters under Fed.R.Civ.P. 53, to magistrates under 28 U.S.C. Sec. 636(b)(1)(B), and to court-annexed arbitrators under 28 U.S.C. Secs. 651-58. However, in such cases the court retains the ultimate decision-making authority. By leaving the relevancy determination solely up to the independent auditor, the district court's actions amounted to complete delegation, hence violating the mandate that courts enforce IRS summonses. 51 Even if the delegation were of a lesser order, there appears no ground to support it. The task delegated to the independent auditors is surely outside the scope of Fed.R.Evid. 706, which allows experts to render an opinion on the facts of a case, but does not allow experts actually to decide the case. Alternatively, Rule 53 (pertaining to Masters) may be employed only upon a showing that some exceptional circumstance requires it, Fed.R.Civ.P. 53(b), and the Master's report must be reviewed by the court, Fed.R.Civ.P. 53(e)(2). Nor to our knowledge would the independent auditors be certified as court-annexed arbitrators under 28 U.S.C. Secs. 651-58. We note generally that [e]ven in complex litigation, use of these procedures is the exception and not the rule. Manual for Complex Litigation Second Sec. 21.5 (1985). 52 We conclude that the delegation of the determination of relevance to an independent outside auditor was unauthorized. Cf. Gomez v. United States, --- U.S. ----, 109 S.Ct. 2237, 2247, 104 L.Ed.2d 923 (1989) (suggesting the Court's general reluctance to allow courts to delegate in the absence of specific statutory authority by holding that [t]he absence of a specific reference to jury selection in the [Federal Magistrates Act], ... or indeed, in the legislative history, persuades us that Congress did not intend the additional duties clause [of the Act] to embrace th[e] function [of presiding at voir dire in a felony trial].). Policy considerations support this view. Summons enforcement proceedings are designed to be summary in nature. See Donaldson v. United States, 400 U.S. 517, 529, 91 S.Ct. 534, 541, 27 L.Ed.2d 580 (1971). The determination of whether the summons was a valid exercise of IRS authority was not intended to be complex or involved. As explained supra, the role of the judiciary, in guarding against IRS abuse of the summons authority, is limited to a simple determination of general relevance, and the notion of relevance in this context is a loose one. Hence, the determination to be made by the district court is not a particularly rigorous task. In light of the intended summary nature of the proceedings, and the loose relevancy examination intended by Congress, we think delegation of this matter would be contrary to public policy. 53