Court Opinion

ID: 32212
Source: CourtListenerOpinion
Date Created: 2010-04-25 18:51:13+00
Date Added: 2024-06-11T16:47:27.552795
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
                  UNITED STATES COURT OF APPEALS
                       For the Fifth Circuit                 August 27, 2003

                                                         Charles R. Fulbruge III
                                                                 Clerk
                           No. 02-11165

               JOHN EULICH; VIRGINIA WALSH EULICH,

                                           Plaintiffs-Appellants,

                              VERSUS

                    UNITED STATES OF AMERICA,

                                                 Defendant-Appellee.

           Appeal from the United States District Court
                for the Northern District of Texas
                            (00-CV-587)

Before DAVIS, SMITH, AND DUHÉ, Circuit Judges.

PER CURIAM:1

      John and Virginia Eulich are under investigation by the

Internal Revenue Service for the tax years 1995, 1996, and 1997.

As part of its investigation, the IRS issued formal document

requests (FDRs) and summonses seeking documents relating to a

Bahamian trust and various corporations controlled by the trust.

The Eulichs ask this Court to reverse the district court order

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     Pursuant to 5th Circuit Rule 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5th Circuit
Rule 47.5.4.
enforcing the summonses and FDRs, arguing that (1) the FDRs are

facially defective and (2) the Eulichs have no control over the

requested documents.    We affirm the order as it applies to John

Eulich and reverse as to Virginia Eulich.

     In reviewing mixed questions of law and fact, this court

reviews conclusions of law de novo and findings of fact for clear

error.    Payne v. United States, 289 F.3d 377, 381 (5th Cir. 2002).

Fact findings are clearly erroneous only if the reviewing court is

left with a definite and firm conviction that a mistake has been

made. United States v. United States Gypsum Co., 333 U.S. 364, 395

(1948).

     The standards for enforcement of an FDR and a summons are

similar, though not identical. See Chris-Marine USA, Inc. v. United

States, 892 F. Supp. 1437, 1143 (M.D. Fla. 1995).   For either, the

IRS must establish that it has fulfilled the requirements set forth

in United States v. Powell, 379 U.S. 48, 57-58 (1964), which

include technical compliance with the applicable sections of the

Code.

     In the case of an FDR, the IRS must comply with the technical

requirements of 26 U.S.C. § 982.      Under § 982(c)(1)(D), the FDR

must include a description of the consequences of failure to

produce the documentation.    Eulich contends that under § 982 and

principles of due process, a specific definition of the “examined

item” is necessary to the description of the consequences.   Eulich

asserts that the FDR fails in this regard because it describes the

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“examined item” only in terms of the tax years under review.

     Neither § 982 nor the cases cited at argument support the

proposition that the FDR must provide a precise description of the

examined item in order to inform the taxpayer of the consequences

of noncompliance. The FDRs in the record reproduce the language of

§ 982 (a), stating clearly that failure to produce the documents

covered by the FDR will result in their exclusion in future court

proceedings.      We    conclude    that    the   IRS     complied    with   the

requirements of Powell, including the technical requirements of

§ 982, which themselves provide the taxpayer due process, including

a hearing.

     Next the Eulichs argue that the district court erred in

finding   that   they   have    custody    or   control    of   the   requested

documents.     Virgina Eulich asserts, and the government concedes,

that she is named in the FDRs and summonses only because she is

married to John Eulich and because community property was used in

establishing the trust.        We are left with the firm conviction that

the district court erred in finding that Virginia Eulich had

control of the documents.          Our review of the record reveals no

clear error with respect to John Eulich; therefore, we will not

disturb the finding that John Eulich has control of the documents.

     We conclude that John Eulich’s remaining arguments are without

merit.    We affirm the district court’s order with regard to John

Eulich, and reverse as to Virginia Eulich.

     AFFIRMED in part, REVERSED in part.

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