Court Opinion

ID: 4181356
Source: CourtListenerOpinion
Date Created: 2017-06-27 19:02:02.846436+00
Date Added: 2024-06-11T14:39:21.140723
License: Public Domain

UNITED STATES DISTRICT COURT
                        FOR THE DISTRICT OF COLUMBIA

 BYRON BURTON NEVIUS,
     Petitioner,
     v.                                             Misc. Action No. 16-650 (CKK)
 UNITED STATES,
      Respondent.

                              MEMORANDUM OPINION
                                  (June 27, 2017)

       Presently before the Court is Respondent’s [9] Motion to Dismiss the Petition,

which seeks dismissal of Respondent’s [1] Petition to Quash. Because Respondent’s [9]

Motion relied on materials outside of the pleadings, the Court converted it to a motion for

summary judgment pursuant to Federal Rule of Civil Procedure 56, as provided for by

Federal Rule of Civil Procedure 12(d). In so doing, the Court provided notice to the parties

and an opportunity to supplement their briefing in light of the conversion by submitting

additional pleadings. May 31, 2017 Order, ECF No. 13 (citing Taylor v. FDIC, 132 F.3d

753, 765 (D.C. Cir. 1997)).

       The [1] Petition to Quash relates to two administrative summonses issued by the

Internal Revenue Service (“IRS”). As to the first of these summonses, issued to the First

National Bank of Omaha, the Petition was dismissed for lack of subject-matter jurisdiction

because Plaintiff had “not identified any factual basis to conclude that First National Bank

of Omaha resides or is found in the District of Columbia, and the Court has not identified

any such basis.” June 6, 2016 Order, ECF No. 8. This leaves the Summons at issue in this

Memorandum Opinion, which was issued by the IRS to PNC Bank on March 23, 2016,

and sought records in relation to an investigation being conducted by the IRS into

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Petitioner’s tax liability from 2010 to 2014 (the “Summons”). Decl. of Michelle Ellis, ¶¶

2–3.

          Upon consideration of the pleadings, as supplemented, the relevant legal

authorities, and the record for purposes of the pending summary judgment motion, 1 the

Court GRANTS Respondent’s [9] Motion and DENIES the [1] Petition to Quash

Summons. This matter is DISMISSED WITH PREJUDICE.

                                  I. LEGAL STANDARD

          Summary judgment is appropriate where “the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter

of law.” Fed. R. Civ. P. 56(a). 2 The mere existence of some factual dispute is insufficient

on its own to bar summary judgment; the dispute must pertain to a “material” fact. Id.

Accordingly, “[o]nly disputes over facts that might affect the outcome of the suit under the

governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). Nor may summary judgment be avoided based on

just any disagreement as to the relevant facts; the dispute must be “genuine,” meaning that

1
    The Court’s consideration has focused on the following documents:

      •   Pet. to Quash Summons, ECF No 1;
      •   United States’ Mot. to Dismiss the Pet., ECF No. 9;
      •   Decl. of Michelle Ellis, ECF No. 9-3;
      •   Mot. in Opp. to Summ J. and Mot. to Transfer this Case to the United States Court
          of Federal Claims, ECF No. 11;
      •   Reply in Supp. of Mot. to Dismiss, ECF No. 12;
      •   Supp. Brief for Summ. J, ECF No. 14.
2
 As the Court disposes of this matter on a motion for summary judgment, the Court does
not present the legal standard for a motion to dismiss.
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there must be sufficient admissible evidence for a reasonable trier of fact to find for the

non-movant. Id.

       In order to establish that a fact is or cannot be genuinely disputed, a party must (a)

cite to specific parts of the record—including deposition testimony, documentary evidence,

affidavits or declarations, or other competent evidence—in support of its position, or (b)

demonstrate that the materials relied upon by the opposing party do not actually establish

the absence or presence of a genuine dispute. Fed. R. Civ. P. 56(c)(1). Conclusory

assertions offered without any factual basis in the record cannot create a genuine dispute

sufficient to survive summary judgment. See Ass’n of Flight Attendants-CWA, AFL-CIO v.

Dep’t of Transp., 564 F.3d 462, 465-66 (D.C. Cir. 2009). Moreover, where “a party fails

to properly support an assertion of fact or fails to properly address another party’s assertion

of fact,” the district court may “consider the fact undisputed for purposes of the motion.”

Fed. R. Civ. P. 56(e).

       When faced with a motion for summary judgment, the district court may not make

credibility determinations or weigh the evidence; instead, the evidence must be analyzed

in the light most favorable to the non-movant, with all justifiable inferences drawn in his

favor. Liberty Lobby, 477 U.S. at 255. If material facts are genuinely in dispute, or

undisputed facts are susceptible to divergent yet justifiable inferences, summary judgment

is inappropriate. Moore v. Hartman, 571 F.3d 62, 66 (D.C. Cir. 2009). In the end, the

district court’s task is to determine “whether the evidence presents a sufficient

disagreement to require submission to a jury or whether it is so one-sided that one party

must prevail as a matter of law.” Liberty Lobby, 477 U.S. at 251–52. In this regard, the

non-movant must “do more than simply show that there is some metaphysical doubt as to

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the material facts,” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574,

586 (1986); “[i]f the evidence is merely colorable, or is not significantly probative,

summary judgment may be granted.” Liberty Lobby, 477 U.S. at 249–50 (internal citations

omitted).

                                    II. DISCUSSION

       For an IRS administrative summons to be enforceable, the Government must

establish a “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. Judicial Watch, Inc., 371 F.3d 824, 829 (D.C. Cir. 2004) (internal quotation marks

and alterations omitted) (citing United States v. Powell, 379 U.S. 48, 57–58 (1964)). These

are commonly referred to as the Powell factors. In this respect, the “initial burden” on the

IRS “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.” Id. (internal quotation marks

omitted).

       In the usual case, “the IRS can satisfy that standard by submitting a simple affidavit

from the investigating agent.” United States v. Clarke, 134 S. Ct. 2361, 2367 (2014).

According to the United States Supreme Court, “summons enforcement proceedings are to

be summary in nature . . . and courts may ask only whether the IRS issued a summons in

good faith, and must eschew any broader role of overseeing the IRS’s determinations to

investigate.” Id. (internal quotation marks and alterations omitted). Once the IRS

discharges its “slight burden,” the obligation shifts to the taxpayer to “disprove the actual

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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.” Judicial Watch,

Inc., 371 F.3d at 829 (internal quotation marks omitted). Such an abuse could occur, for

example, if the summons was issued for an “improper purpose, such as to harass the

taxpayer.” Id.

       Here, the Government has submitted a declaration of the IRS Revenue Agent

conducting an investigation of Petitioner’s tax liability from 2010 through 2014. Decl. of

Michelle Ellis, ¶¶ 1–2. This declaration suffices to meet the Government’s burden with

respect to each of the Powell factors. 3 The declaration indicates that the Summons was

issued to PNC Bank in order to obtain books, papers, records, or other data that is necessary

to properly investigate Petitioner’s tax liability. Id. ¶¶ 3, 10. Accordingly, as to the first

Powell factor, the investigation is being conducted for a legitimate purpose (i.e., assessing

Petitioner’s tax liability), and as to the second Powell factor, the summons seeks

information that may be relevant to that purpose. This accords with the statutory basis for

the Government’s subpoena power in this case, which states that a summons may be issued

for “determining the liability of any person for any internal revenue tax . . . .” 26 U.S.C. §

7602(a).

       The declaration also represents that the materials sought by the Summons “are not

already in the possession of the [IRS,]” thereby satisfying the third Powell factor, and that

“[a]ll administrative steps required by the Internal Revenue Code for issuance of a

summons have been taken[,]” thereby satisfying the fourth Powell factor. Id. ¶¶ 7–8. This

3
  Petitioner challenges the veracity of various representation in this declaration, but offers
no evidence in support of his contentions. See Supplemental Brief for Summ. J., at 9. As
already stated, the Court may rely upon the declaration of the examining IRS agent.
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last point is further evidenced by the face of the subpoena, which indicates that it was

authorized and signed by the Revenue Agent’s supervisor, as required by Internal Revenue

Manual section 25.5.1.3.3; the Government’s representation that no Justice Department

referral is in effect with respect to Petitioner, as required by 26 U.S.C. § 7602(d); and the

Government’s representation that appropriate notice of the Summons was provided to

Petitioner, as required by 26 U.S.C. § 7609(a). Decl. of Michelle Ellis, ¶¶ 5, 9; ECF No. 9-

3, at 5. Accordingly, the Government has met its burden with respect to all of the Powell

factors.

           Although Petitioner has submitted voluminous briefs, both before and after the

Court converted the pending motion to one for summary judgment, he has failed to provide

the Court with any credible evidence that could impugn the Government’s motives behind

issuing the Summons, and to thereby suggest that the Summons was issued without good

faith, or for some improper purpose. Rather, Petitioner primarily seems to contend that he

is not subject to federal taxation, because he is either not a citizen of the United States (but

rather a citizen of the state of Missouri), or because federal taxation does not extend to the

state of Missouri. The Court shall not countenance these arguments, which have been

routinely rejected, and in any event, Plaintiff’s contentions do nothing to dislodge the

conclusion that the Government has established that it acted in good faith and that there

was a proper investigatory purpose for issuing the Summons. See Maxwell v. O’Neill, No.

CIV.A.00-01953 (HHK), 2002 WL 31367754, at *7 (D.D.C. Sept. 12, 2002) (“courts have

readily dismissed [tax protest claims] as frivolous”); Order, Nevius v. Internal Revenue

Serv., No. 13-cv-4228 (W.D. Mo. April 24, 2014) (ECF No. 39) (finding that Petitioner’s

challenge to an earlier summons issued to PNC Bank “consist[ed] of nothing more than

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tired, tax protestor rhetoric that has been consistently rejected for reasons that have been

clearly and repeatedly articulated and thus merit no recitation here”) (collecting cases). To

the extent Petitioner challenges the jurisdiction of this Court, that argument is foreclosed

by statute. See 26 U.S.C. § 7609(h)(2). Furthermore, the Court has already denied

Petitioner’s unfounded request to transfer this matter to the Court of Federal Claims. June

6, 2016 Order, ECF No. 8.

       Accordingly, the Court concludes that the Summons may be enforced, and that no

further proceedings in this matter are warranted, as Plaintiff has failed to bring to the

Court’s attention, despite multiple opportunities to do so, any “specific facts or

circumstances plausibly raising an inference of bad faith.” Clarke, 134 S. Ct. at 2367.

                                   III. CONCLUSION

       For the foregoing reasons, the Court GRANTS Respondent’s [9] Motion, and

DENIES the [1] Petition to Quash. Summary judgment is entered in favor of Respondent,

and this matter is DISMISSED WITH PREJUDICE.

       An appropriate Order accompanies this Memorandum Opinion.

Dated: June 27, 2017

                                                         /s/
                                                      COLLEEN KOLLAR-KOTELLY
                                                      United States District Judge

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