Opinion ID: 186229
Heading Depth: 2
Heading Rank: 1

Heading: Tax-related Purpose

Text: 14 Judicial Watch argues the district court should not have enforced the summons because the audit lacks any legitimate tax-related purpose. According to the taxpayer, the district court ignore[d] the wealth of competent evidence presented by Judicial Watch of an improper, political and retaliatory motive for the audit and summons. 15 We review the district court's determination of whether the factual conditions for enforcement of a summons have been met for clear error. United States v. Ins. Consultants of Knox, Inc., 187 F.3d 755, 759 (7th Cir.1999); see Mazurek v. United States, 271 F.3d 226, 229 (5th Cir.2001); Spell v. United States, 907 F.2d 36, 39 (4th Cir.1990). For the court to enforce the summons the Government must have established a prima facie case by showing: (1) the investigation will be conducted pursuant to a legitimate purpose; (2) the inquiry may be relevant to the purpose; (3) the information sought is not already within the [IRS's] possession; and (4) in issuing the summons the administrative steps required by the [tax] Code have been followed by the IRS. United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964). This initial burden, however, is a slight one, for the statute must be read broadly in order to ensure that the enforcement powers of the IRS are not unduly restricted. United States v. Kis, 658 F.2d 526, 536 (7th Cir.1981); see Alphin v. United States, 809 F.2d 236, 238 (4th Cir.1987) (burden is fairly slight because this is a summary proceeding). 16 The district court properly concluded that declarations in which the IRS agents and officials responsible for the audit attest to each of the four elements of the prima facie case discharged the slight burden placed upon the IRS. See Kis, 658 F.2d at 536 (No more than [such affidavits are] necessary to make the prima facie case). It then fell to Judicial Watch to disprove the actual existence of a valid civil tax determination or collection purpose by showing the enforcement of the summons would be an abuse of the court's process. United States v. LaSalle Nat'l Bank, 437 U.S. 298, 316, 98 S.Ct. 2357, 2367, 57 L.Ed.2d 221 (1978). The court's process would be abused if the summons [was] issued for an improper purpose, such as to harass the taxpayer. Powell, 379 U.S. at 58, 85 S.Ct. at 255. 17 Judicial Watch argues the timing of the audit, coming shortly after Judicial Watch had sued the IRS and immediately after Judicial Watch had issued its report on impeachment, demonstrates the retaliatory motive behind the audit. This post hoc, ergo propter hoc argument would be fallacious even if it were consistent with that. The IRS decided to audit Judicial Watch in December 1997, six months before Judicial Watch filed suit against the IRS and nine months before it accused President Clinton of impeachable offenses. 18 Judicial Watch also argues the political motivation for the audit is shown by two statements an IRS agent made to the taxpayer's counsel early in 2000, both of which Judicial Watch characterizes as warnings that the organization was still on the Service's radar screen. Judicial Watch portrays these statements as menacing solely because each followed shortly after important developments in Judicial Watch corruption litigation against the Clinton Administration. The timing point does not deserve a further response. There is nothing nefarious, moreover, about a notice to counsel that a matter is still pending; such notice is ordinarily a courtesy to the taxpayer and is in no event suggestive of an abuse of government power. 19 Judicial Watch next argues the comments of several IRS agents evidence an improper retaliatory motive. According to the taxpayer, one agent said the audit was a hot potato, and another rhetorically asked, What do you expect when you sue the President? Such expressions of opinion by front line revenue agents are of no moment. If there was an improper motive for initiating the audit, then that motive has to have been harbored by a person or persons with authority to initiate it. Two independent investigations by the TIGTA turned up no evidence that the Clinton Administration or any political appointee at the IRS used the audit process to retaliate against Judicial Watch. More important, Judicial Watch proffers no evidence they did. 20 Judicial Watch does proffer two pages of notes written by James Carville, a political advisor to President Clinton, and letters and e-mails from members of the public that were forwarded to the IRS by the White House and by Democrats in the Congress. None of these communications, however, suggests the [i]mproper political pressure Judicial Watch claims. The Carville notes do not so much as mention the IRS, an audit, or Judicial Watch; although they do suggest Democrats should make known how right-wing foundations ... provide funding for much of the Republican attack `machine,' they primarily suggest establishing a clearinghouse for information which exposes the motives and methods behind Republican partisan attacks. The letters and e-mails forwarded by the White House and by Members of Congress simply evidence constituent service, which our political system accepts and even applauds. Rossotti, 317 F.3d at 406 n. 2. Those forwarding the inquiries asked only that appropriate action be taken; they made no demand upon the IRS either to audit Judicial Watch or to rescind its tax exemption. 21 Finally, Judicial Watch argues that even if the initiation of the audit was legitimate, the later decisions of the IRS to reinstate and to expand the audit were made solely to punish Judicial Watch for its advocacy and anti-corruption activities. There simply are no facts, however, to support this assertion. We agree with the district court, therefore: Judicial Watch failed to show enforcing the summons would be an abuse of the court's process.