Court Opinion

ID: 10793
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:57:14+00
Date Added: 2024-06-11T13:30:09.814564
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                           FOR THE FIFTH CIRCUIT

                           ____________________

                               No. 96-20224
                             Summary Calendar
                           ____________________

THOMAS O. MAXTON, JR.,

                                                    Petitioner-Appellant,

                                   versus

UNITED STATES OF AMERICA; INTERNAL REVENUE
SERVICE; CRIS FLORES,

                                                   Respondents-Appellees.

_________________________________________________________________

       Appeal from the United States District Court for the
                    Southern District of Texas
                         (94-MC-298)
_________________________________________________________________
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
                         November 26, 1996
Before JOLLY, STEWART and DENNIS, Circuit Judges.

PER CURIAM:*

     On July 27, 1994, the Internal Revenue Service issued third-

party recordkeeper summonses to two financial institutions seeking

information relating to Thomas Maxton's tax liability.                Maxton

filed a petition to quash the summonses. The government filed an

answer   and   a    counterclaim   that   sought   dismissal   of   Maxton's

     *
      Pursuant to Local 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this opinion should not be published and is not precedent except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 Local Rule 47.5.4.
petition and enforcement of the summonses.1               Maxton did not file a

reply    to   the   counterclaim.         The       district   court   denied   the

taxpayer's petition and ordered compliance with the summonses.

     Maxton first argues that the IRS has no probable cause to

issue the summons, and therefore enforcement of them would violate

his rights protected by the Fourth Amendment.                  Nevertheless, the

Supreme Court has held that the IRS "need not meet any standard of

probable cause to obtain enforcement of [a] summons."                      United

States v. Powell, 379 U.S. 48, 57, 85 S. Ct. 248, 255, 13 L. Ed. 2d
112 (1964).     Rather, the government needs only to make a minimal

prima facie showing that (1) the summons is issued for a proper

purpose; (2) the material sought is relevant to that purpose; (3)

the information sought is not already within the Commissioner's

possession; and (4) the administrative steps required by the

Internal Revenue Code have been followed.                Id.

     Here, the district court properly denied Maxton's petition to

quash and ordered the financial institutions to comply with the

summonses     based   on   the   answer       and   counterclaim   filed   by   the

government.     The government has satisfied the Powell test.                   The

summonses were issued to obtain information about Maxton's tax

liability and, therefore, was for a proper purpose.                The summonses

     1
      The IRS must apply to a district court to enforce its
summonses. See United States v. Claes, 747 F.2d 491, 494 (8th Cir.
1984).

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only requested information relevant to that purpose, including

ledger sheets for Maxton's accounts, and applications for loans.

There    is   no    evidence    that    the    IRS   possessed   the   requested

information. Finally, the IRS followed the required administrative

steps.

     Maxton contends that Revenue Agent Flores was not authorized

to issue and serve administrative summonses.                Under §§ 7602 and

7603 of the Internal Revenue Code ("IRC"), the Secretary of the

Treasury and his delegates are vested with authority to issue and

serve administrative summonses.           The Secretary of the Treasury has

vested    the      Commissioner    of    the    Internal   Revenue     with   the

responsibility for administering the Internal Revenue laws.                   See

Treas. Ord. No. 150-10 (Apr. 22, 1982); Treas. Ord. No. 150-37

(Mar. 17, 1955 and Apr. 22, 1982).             The Commissioner has the power

to designate IRS employees to issue summonses.                   Treas. Reg. §

301.7603-1(b)(T.D. 7188, 37 Fed. Reg. 12,796 (June 29, 1972), as

amended by T.D. 7297, 38 Fed. Reg. 34,803 (Dec. 19, 1973).                    The

Commissioner has exercised this power, and delegated her authority

to issue and serve summonses to revenue agents, like Revenue Agent

Cris Flores, who issued the summons here.              Delegation Order No. 4

(Rev. 20 § 1(d)(3)(March 5, 1990), 1990-1 C.B. 294 (55 Fed. Reg.

7626 (Mar. 2, 1990)).          Therefore, the summonses in this case were

properly issued and served.

                                         3
     Maxton   further    argues         that    the     authority    to     issue

administrative summonses applies only in connection with alcohol,

tobacco and   firearms   taxes     or       offenses.    This    contention   is

absolutely without merit.      26 U.S.C. § 7602 gives the IRS broad

authority to issues summons enforcing all types of taxes.                   See,

e.g., United States v. Sanders, 951 F.2d 1065, 1067 (9th Cir.

1991); United States v. Joyce, 498 F.2d 592, 594 (7th Cir. 1974).

District   courts   across   the   country       have   been    inundated   with

arguments similar to Maxton's.               See, e.g., Darland v. United

States, No. 4:96:MC:4, 1996 WL 498430 (W.D.Mich. June 10, 1996);

Hogan v. United States, 873 F. Supp. 80 (S.D. Ohio 1994); Wallace v.

United States, No. MS-1-94-035, 1994 WL 676498 (S.D. Ohio Aug. 22,

1994); United States v. Klimek, No. 91-4682, 1992 WL 99634 (E.D.Pa.

April 29, 1992); United States v. Streett, 791 F. Supp. 563 (D.Md.

1992).   Although the district court has shown restraint, it would

be well within its discretion to sanction a party under these

circumstances.

     Maxton also tosses a variety of constitutional arguments into

his brief.    None have merit; the IRS summonses issued here are

commonplace, and have been upheld in similar circumstances.                 See,

e.g., Powell, 379 U.S. 48.         The district court properly denied

Maxton's petition to quash and ordered enforcement of the third

                                        4
party recordkeeper summonses issued by the IRS.   Its judgment is

therefore

                                                  A F F I R M E D.

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