Court Opinion

ID: 9906565
Source: CourtListenerOpinion
Date Created: 2023-12-04 16:01:33.145332+00
Date Added: 2024-06-11T09:25:12.749029
License: Public Domain

Appellate Case: 23-4020     Document: 010110962261       Date Filed: 12/04/2023    Page: 1
                                                                                   FILED
                                                                       United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                          Tenth Circuit

                              FOR THE TENTH CIRCUIT                         December 4, 2023
                          _________________________________
                                                                          Christopher M. Wolpert
                                                                              Clerk of Court
  DAVID MICHAEL BISHOP; SLIM
  VENTURES, LLC,

        Petitioners - Appellants,

  v.                                                Nos. 23-4020, 23-4021, 23-4022,
                                                          23-4026 & 23-4027
  UNITED STATES OF AMERICA;                         (D.C. Nos. 2:22-CV-00340-DBB,
  INTERNAL REVENUE SERVICE;                              2:22-CV-00344-DBB,
  TIMOTHY BAUER, Internal Revenue                        2:22-CV-00351-DBB,
  Agent (ID #0324589), in his official                  2:22-CV-00345-DBB &
  capacity,                                              2:22-CV-00352-DBB)
                                                                (D. Utah)
        Respondents - Appellees.
                       _________________________________

                              ORDER AND JUDGMENT*
                          _________________________________

 Before BACHARACH, BRISCOE, and McHUGH, Circuit Judges.
                  _________________________________

       In 2021, the Internal Revenue Service (IRS) began investigating petitioners

 David Michael Bishop and Slim Ventures, LLC, for commercially promoting

 monetized installment sales as a way of delaying the reporting of capital gains on the

 sale of assets. As part of that investigation, the IRS issued summonses to four banks

 that it believed might have records associated with petitioners’ activities. Petitioners

 responded by filing petitions to quash the summonses. After allowing the parties to

       *
          This order and judgment is not binding precedent, except under the doctrines
 of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
 its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Appellate Case: 23-4020     Document: 010110962261         Date Filed: 12/04/2023     Page: 2

 brief the matter, the district court denied the petitions to quash and entered separate

 judgments in favor of the government in each case. Petitioners now appeal.

 Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the judgments of the

 district court.

                                              I

                                    Factual background

        a) Monetized installment sales

        The Internal Revenue Code (Code) defines an “installment sale” as “a

 disposition of property where at least 1 payment is to be received after the close of

 the taxable year in which the disposition occurs.” 26 U.S.C. § 453(b)(1). The Code

 permits the seller in a typical installment sale to report capital gains either in the tax

 year that title to the property is transferred from the seller to the purchaser or in the

 tax year that the purchaser actually pays for the property, assuming that those years

 are different. Id. § 453(a), (c), (d).

        A monetized installment sale (MIS) attempts to delay the reporting of capital

 gains for many years. In an MIS, “an intermediary purchases appreciated property

 from a seller in exchange for an installment note, which typically provides for

 payments of interest only, with principal being paid at the end of the term.” Fed. Tax

 Coordinator, ¶ T-10164.10 (2d. Nov. 2023). “In these arrangements, the seller gets

 the lion’s share of the proceeds but improperly delays the gain recognition on the

 appreciated property until the final payment on the installment note, often slated for

 many years later.” Id.

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       In 2021, the IRS published a Chief Counsel Advisory warning that an MIS, for

 numerous reasons, has no legal effect. Aplt. App. at 50. “[A]n arrangement to swap

 equal sums of cash in 30 years, solely to avoid taxation, is a quintessential farce”

 according to the IRS. Id. “Since issuing that advisory, the IRS has twice included

 MIS on its annual list of ‘dirty dozen’ scams to watch out for.” Id.; see Dirty Dozen:

 Watch Out For Schemes Aimed At High-Income Filers; Charitable Remainder

 Annuity Trusts, Monetized Installment Sales Carry Risk, IRS News Release,

 IR-2023-65, 2023 WL 2727299 (Mar. 31, 2023).

       b) Bishop

       Bishop received a law degree from George Mason University in 1996, and

 subsequently worked as a financial planner. In November 2003, the IRS filed a civil

 action against Bishop in the United States District Court for the District of Utah

 seeking to enjoin him from promoting the “Employee Leasing and Foreign Deferred

 Compensation” program. Aple. Br. at 6–7; see United States v. Bishop,

 2:03-cv-01017-BSJ (D. Utah). At the time it filed the lawsuit, the IRS had recently

 published guidance warning of an “abusive arrangement” whereby taxpayers,

 typically those who were self-employed, sought to defer or avoid taxes by forming a

 foreign corporation which then “leased” their labor back to their business in the

 United States. Aple. Br. at 7 (citing IRS Notice 2003–22, 2003–18 I.R.B. 851, 2003–

 1 C.B. 851, 2003 WL 1786830). In December 2003, the district court overseeing the

 matter entered a permanent injunction barring Bishop from, among other things,

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 promoting any tax plan that Bishop knew or had reason to know was false or

 fraudulent as to any material matter.1 Aplt. App. at 51.

       c) Slim Ventures

       In 2021, the IRS’s Lead Development Center (LDC)2 began identifying

 promoters of MIS. One of those promoters was an entity called Slim Ventures, LLC

 (Slim Ventures). “Promotional materials on Slim Ventures’ website promised that

 ‘[a]n owner of highly appreciated assets c[ould] sell them and defer 100% of the

 capital gains tax for up to 30 years while receiving up to 95% of the value in cash.’”

 Id. The website described how MIS worked and stated that the first step was for an

 interested seller of any capital asset to find a buyer and then contact Slim Ventures.

 The website stated that Slim Ventures would act as “an intermediate purchaser from

       1
          In the final judgment of permanent injunction entered in the case, the district
 court found that Bishop “ha[d] not admitted the [government’s] allegations that [he
 had] engaged in conduct that [wa]s subject to penalty under” the IRC, but had
 nevertheless “consented to the entry of judgment for injunctive relief . . . to prevent
 [him] from (1) engaging in conduct subject to penalty under [the IRC]; and
 (2) organizing, promoting, and selling [an] ‘Employee Leasing and Foreign Deferred
 Compensation’ program.” Aple. Br., Addendum at 2. The judgment also, more
 specifically, prohibited Bishop from “[m]aking false statements that participation in
 the ‘Employee Leasing and Foreign Deferred Compensation’ program will eliminate
 taxes on income in excess of consumption levels or will eliminate or defer capital
 gains taxes,” and from “[e]ncouraging, instructing, advising and assisting others to
 violate the tax laws, including to evade the payment of taxes legally due, by
 participating in the ‘Employee Leasing and Foreign Deferred Compensation’
 program.” Id.
       2
         According to the record, the LDC “receives, identifies, and develops leads on
 individuals and entities that promote or aid in the promotion of abusive tax schemes.”
 Aplt. App. at 65. The LDC is part of the IRS’s Office of Promoter Investigations.
 Aple. Br. at 12.
                                            4
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 the seller” and “re-sell[] the asset to the final buyer.” Id. But, according to the

 website, “[t]he deed or other title instrument . . . ‘w[ould] pass directly (in a

 ‘directed’ transfer) from Slim Ventures LLC’s seller to Slim [V]entures LLC’s buyer,

 without going through Slim Ventures.’” Id. Thereafter, Slim Ventures would “pay[]

 the seller with ‘an unsecured installment contract’ for about 95% of the sale

 proceeds.” Id. “The entire principal on this installment contract [would be] due in

 30 years.” Id. As part of the transaction, “a ‘third-party lender’ [would] give[] the

 seller a cash loan equal to the principal.” Id. “The interest that the seller owe[d] the

 third-party lender [would] equal[] the interest owed to the seller on Slim Ventures[’]

 installment contract.” Id. at 51–52. This meant that the seller would “delay paying a

 capital gains tax for 30 years, while [receiving] 95% of the sale proceeds up front.”

 Id. at 52.

        d) The IRS’s investigation of Slim Ventures

        The IRS determined that Slim Ventures was established by Bishop, and that

 Bishop served as its managing director. On September 30, 2021, IRS Revenue Agent

 Tim Bauer3 interviewed Bishop regarding his promotion of MIS. Bauer explained at

 the outset of the interview that the IRS was investigating whether Bishop could be

 liable for tax penalties under 26 U.S.C. § 6700 resulting from the MIS transactions.

 Bishop told Bauer that he learned about MIS from a financial advisor named Stanley

        3
         This is a pseudonym employed by the United States in this case for privacy
 and safety reasons.
                                              5
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 Crow, who had a website promoting MIS.4 According to Bishop, he studied Crow’s

 website for six months before deciding to market MIS himself. Bishop stated that he

 used the information from Crow’s website to write Slim Ventures’ promotional

 materials.

       Bishop characterized MIS as his first “pay day” and he told Bauer that, during

 the previous three years, he had averaged three to four sellers per month. Aplt. App.

 at 52. Bishop said that he used a bank named Summit Crest Financial LLC (Summit

 Crest) as the third-party lender for all of the MIS. Bishop also told Bauer that a

 family trust, of which his daughters were beneficiaries, owned Slim Ventures and

 that he simply managed Slim Ventures. Bauer suspected, however, that Bishop was

 the de facto owner of Slim Ventures and was using the family trust to hide that fact.

       Between June 2021 and February 2022, the IRS formally requested from

 Bishop documents related to his promotion of MIS or similar tax plans. Bishop

 responded with some information but, according to the IRS, “left myriad questions

 unanswered.” Id. at 53. For example, Bishop refused to respond to the IRS’s

 requests for his accounting records, bank statements, and client list.

       Bauer searched Slim Ventures on the IRS’s Information Returns Processing

 (IRP) system. “IRP stores data on payments to third parties.” Id. In the IRP, Bauer

 found information indicating that Wells Fargo Bank had paid Slim Ventures $11,227

       4
          According to the IRS, Crow “was himself under investigation for promoting
 abusive tax schemes.” Aple. Br. at 12 (citing S. Crow Collateral Corp. v. United
 States, 782 F. App’x 597, 598 (9th Cir. 2019)).
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 in interest in 2020. According to the IRS, “[s]uch a large amount of ordinary bank

 interest indicates that Slim Ventures likely held a substantial sum of money with

 Wells Fargo in 2020.” Id. “Further research on internal IRS systems indicated that

 Key Bank and Zions Bank [(Zions)] m[ight] likewise have information relevant to

 Bishop’s promotion of MIS.” Id. at 53–54.

       e) The IRS’s summonses

       Based upon this information, Bauer prepared IRS summonses to Wells Fargo,

 Key Bank, Zions, and Summit Crest. Bauer believed that records from these entities

 could “help determine whether to assess § 6700 penalties against Bishop for

 promoting MIS” and would also “be relevant to a contempt inquiry against Bishop

 for violating the Court’s injunction not to promote fraudulent tax schemes.” Id. at

 54.

       On May 4, 2022, the IRS issued eight summonses to Zions, Wells Fargo, Key

 Bank, and Summit Crest seeking records concerning any bank accounts of Bishop or

 Slim Ventures for the period from January 1, 2018 through the “date of compliance.”5

 Aplt. App. at 43; Supp. App. at 50. The summonses issued to Summit Crest sought

 records relating to monetized installment sales in which either Bishop or Slim

 Ventures was identified as a seller or borrower for the period from January 1, 2018,

 through the “date of compliance.” Supp. App. at 72. After issuing the summonses,

       5
         Each entity received two summonses: one relating to Bishop and one relating
 to Slim Ventures.
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 the IRS mailed notices of the summonses to Bishop and Slim Ventures as required by

 26 U.S.C. § 7609(a)(1).

        On May 6, 2022, Key Bank notified Bauer that it had no documents responsive

 to the summons issued to it. Zions did the same on May 31, 2022.

                                             II

                                    Procedural history

        On May 20 and 23, 2022, Bishop and Slim Ventures each filed separate

 petitions to quash the summonses in the United States District Court for the District

 of Utah.6 Aplt. App. at 1; Supp. App. at 29, 51, 73, 95. The government moved to

 consolidate all of the cases. Aplt. App. at 45–62. The government also moved to

 deny as moot the summonses issued to Zions and Key Bank and to compel

 compliance with the summonses issued to Wells Fargo and Summit Crest.

        On December 13, 2022, the district court notified the parties that, in lieu of

 consolidation, it intended to sua sponte reassign all of the cases to a single district

 court judge pursuant to its local civil rules of practice. Aple. App. at 6. Although the

 district court afforded the parties seven days to object to the proposed reassignment,

 neither party objected. Consequently, on December 22, 2022, all of the cases were

 reassigned to the same district court judge.

        6
         The eight petitions were assigned the following district court case numbers:
 2:22-cv-00340-DBB (Bishop/Zions); 2:22-cv-00341-DBB (Slim Ventures/Key
 Bank); 2:22-cv-00344-DBB (Bishop/Wells Fargo); 2:22-cv-00345-DBB (Slim
 Ventures/Summit Crest); 2:22-cv-00347-DBB (Bishop/Key Bank);
 2:22-cv-00348-DBB (Slim Ventures/Zion); 2:22-cv-00351-DBB (Slim Ventures/Well
 Fargo); 2:22-cv-00352-DBB (Bishop/Summit Crest).
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        On January 9, 2023, the district court granted the government’s motion, denied

 the petitions to quash, ordered Wells Fargo and Summit Crest to respond to the

 respective summonses, and entered separate judgments in favor of the government in

 all eight cases. In doing so, the district court concluded, as an initial matter, that the

 petitions to quash the summonses issued to Key Bank and Zions were moot because

 both of those “banks informed the IRS that they had no information responsive to the

 summonses” and the IRS in turn “state[d] that it w[ould] not enforce the

 summonses.” Aplt. App. at 199–200.

        As for the remaining summonses, the district court concluded that the IRS

 made a prima facie case that it properly issued the summonses to Summit Crest and

 Wells Fargo because the IRS demonstrated that it had not referred the case for

 criminal prosecution and had issued the summonses in good faith. The district court

 in turn concluded that Bishop and Slim Ventures failed to meet their burden of

 refuting the IRS’s prima facie showing of good faith. In particular, the district court

 rejected the argument by Bishop and Slim Ventures “that the IRS [was required to]

 prove the illegality of MIS transactions before beginning its investigation.” Id. at

 207. The district court also rejected as “pure conjecture” what it characterized as “an

 expansive First Amendment argument” by Bishop and Slim Ventures “to assert an

 improper purpose for the summonses.” Id. at 208–09. The district court denied the

 requests by Bishop and Slim Ventures for an evidentiary hearing, concluding that

 they failed to point to any evidence of bad faith on the part of Bauer, as well as their

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  requests for in camera review of the documents sought by the summonses. Finally,

  the district court denied as moot the government’s motion to consolidate the cases.

        Judgment was entered in the cases on January 9, 2023. Bishop and Slim

  Ventures filed notices of appeal on February 22, 2023.7

                                            III

        Petitioners argue on appeal that the district court erred in two respects: (1) in

  determining there was no violation of First Amendment rights and by embracing a

  view of IRS power that eviscerates the First Amendment; and (2) by wholesale

  ignoring controlling precedents, statutes, and facts demonstrating various legal

  grounds and improper purposes and in turn short-circuiting litigation processes such

  as an evidentiary hearing.

        7
          Appeal No. 23-4020 arose out of District Court Case No. 2:22-cv-00340-
  DBB. Appeal No. 23-4021 arose out of District Court Case No. 2:22-cv-00344-DBB.
  Appeal No. 23-4022 arose out of District Court Case No. 2:22-cv-00351-DBB.
  Appeal No. 23-4023 arose out of District Court Case No. 2:22-cv-00341-DBB.
  Appeal No. 23-4024 arose out of District Court Case No. 2:22-cv-00348-DBB.
  Appeal No. 23-4025 arose out of District Court Case No. 2:22-cv-00347-DBB.
  Appeal No. 23-4026 arose out of District Court Case No. 2:22-cv-00345-DBB.
  Appeal No. 23-4027 arose out of District Court Case No. 2:22-cv-00352-DBB.
         Four of these appeals—No. 23-4020, 23-4023, 23-4024, and 23-4025—
  pertained to the summonses issued to Key Bank and Zions. As noted, the district
  court agreed with the government that the petitions to quash all of these summonses
  were moot because Key Bank and Zions responded to the summonses and indicated
  they had no records responsive thereto. Petitioners dismissed Appeal Nos. 23-4023,
  23-4024, and 23-4025 after they were filed. For some unexplained reason, however,
  petitioners failed to dismiss No. 23-4020, which sought to quash the summonses
  issued to Zions seeking records pertaining to Bishop. Nevertheless, petitioners do
  not challenge the district court’s conclusion that those summonses were moot. We
  therefore summarily affirm the judgment of the district court in that case.

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                                              A

        Before addressing these two issues on the merits, we begin by briefly

  discussing the IRS’s authority to issue summonses, the manner by which the IRS can

  seek to enforce its summonses, and the manner by which taxpayers can challenge IRS

  summonses.

        “Congress has ‘authorized and required’ the IRS ‘to make the inquiries,

  determinations, and assessments of all taxes’ the Internal Revenue Code [(IRC)]

  imposes.” United States v. Clarke, 573 U.S. 248, 249–50 (2014) (quoting 26 U.S.C.

  § 6201(a)). Congress has, in turn, “granted the Service broad latitude to issue

  summonses ‘[f]or the purpose of ascertaining the correctness of any return, making a

  return where none has been made, determining the liability of any person for any

  internal revenue tax . . . , or collecting any such liability.’” Id. (quoting 26 U.S.C.

  § 7602(a)(1)). This includes the “authority to issue summonses to the subject

  taxpayer and to third parties who may have relevant information.” Standing Akimbo,

  LLC v. U.S. through Internal Revenue Serv., 955 F.3d 1146, 1154 (10th Cir. 2020).

        A taxpayer may challenge an IRS summons by filing an action in federal

  district court to quash the summons. The IRS, for its part, may file an enforcement

  action in federal district court if a taxpayer does not comply with a summons.

  Clarke, 573 U.S. at 250.

        In either type of proceeding, the IRS must, “[a]s a threshold matter, . . . show

  that it has not made a referral of the taxpayer’s case to the Department of Justice . . .

  for criminal prosecution.” Standing Akimbo, 955 F.3d at 1154 (internal quotation

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  marks omitted). After that, a reviewing court is limited to asking “only whether the

  IRS issued [the] summons in good faith, and must eschew any broader role of

  overseeing the IRS’s determinations to investigate.” Clarke, 573 U.S. at 254

  (internal quotation marks and alterations omitted).

        For the IRS to “demonstrate good faith in issuing the summons[es],” the IRS

  simply must establish “what have become known as the Powell factors: ‘that the

  investigation will be conducted pursuant to a legitimate purpose, that the inquiry may

  be relevant to the purpose, that the information sought is not already within the

  [IRS’s] possession, and that the administrative steps required by the [Internal

  Revenue] Code have been followed.’” Id. (quoting United States v. Powell, 379 U.S.

  48, 57–58 (1964)). “To make that showing, the IRS usually files an affidavit from

  the responsible investigating agent.” Id.

        “The taxpayer, however, has an opportunity to challenge that affidavit, and to

  urge the court to quash the summons ‘on any appropriate ground . . . .’” Id. (citing

  Reisman v. Caplin, 375 U.S. 440, 449 (1964)). “Appropriate grounds” are limited to

  circumstances that amount to an abuse of the court’s process. Powell, 379 U.S. at 58;

  see Reisman, 375 U.S. at 449. “Such an abuse would take place if the summons had

  been issued for an improper purpose, such as to harass the taxpayer or to put pressure

  on him to settle a collateral dispute, or for any other purpose reflecting on the good

  faith of the particular investigation.” Powell, 379 U.S. at 58. “The burden of

  showing an abuse of the court’s process is on the taxpayer, and it is not met,” for

  example, “by a mere showing . . . that the statute of limitations for ordinary

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  deficiencies has run or that the records in question have already been once

  examined.” Id.

                                              B

        We now turn to the two issues raised by petitioners. For the reasons outlined

  below, we conclude that both issues lack merit.

        1) First Amendment challenge and related issues

        In their first issue on appeal, petitioners assert that the district court erred by

  determining that there was no violation of their First Amendment rights, and by

  embracing a view of IRS power that eviscerates the First Amendment.

        Petitioners argue in support that the summonses at issue were issued for an

  improper purpose, i.e., because “[t]he IRS and the Biden Administration strongly

  disliked Petitioners’ views about the legality of MIS and the depiction of the IRS and

  Administration as allegedly inconsistent and preferential in affording MIS to elite,

  wealthy, well-connected well-lobbied, influential taxpayers, compared to others of

  lesser wealth and influence.” Aplt. Br. at 32–33. In other words, petitioners assert

  that they were “targeted” based “solely on the (illegal) criteria of [their] speech

  content on the internet; the IRS did not utilize speech-neutral means or criteria.” Id.

  at 33 (emphasis omitted).

        Relatedly, petitioners argue that

        [i]t is undisputed that A) neither Petitioner has any existing delinquent
        tax balance . . . ; B) neither Bishop personally nor Slim Ventures has
        ever been found to have actually done anything unlawful; C) the IRS
        has no evidence either Petitioner has ever actually engaged in or
        induced any ‘improper’ financial or tax transaction at any time . . . ;

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        D) even if, arguendo, the IRS could show Petitioners had actually
        committed any MIS which the IRS now disfavors, the IRS cannot show
        MIS is actually illegal at all, and the IRS admitted in its own filings ‘no
        court has yet considered whether MIS are fraudulent’, and scholarly tax
        articles ‘tout their supposed efficacy’; E) the IRS has allowed MIS for
        various other (well-resourced) taxpayers; F) the IRS has already utterly
        failed to garner even a single relevant document in connection with 4 of
        8 summons used for its fishing expedition; and G) Summit, one of the
        targets with the two remaining summonses, has already told the District
        Court it has no relevant records to produce.

  Id. at 34–36 (emphasis and footnotes omitted).

        In order to address petitioners’ arguments, it is necessary to place them into

  the proper procedural context. As we have noted, petitioners initiated these

  proceedings by moving to quash the summonses that were issued by the IRS. The

  government opposed the petitioners’ motions to quash by moving to enforce the

  summonses. In support, the government submitted a declaration from IRS Revenue

  Agent Bauer that stated that “[n]o ‘Justice Department referral’ has been in effect

  with respect to Bishop since the summonses were served,” and in turn satisfied all of

  the Powell factors by stating that: (1) he was investigating the petitioners’ activities

  to determine whether Bishop was subject to penalties under 26 U.S.C. § 6700 for

  promoting abusive tax schemes and whether he had violated the permanent injunction

  that was entered against him in United States v. Bishop, 2:03-cv-001017 (D. Utah);

  (2) the records sought by the summonses were relevant to his investigation of

  petitioners; (3) the information sought in the summonses was not already within the

  IRS’s possession because Bishop had previously refused to provide any documents to

  Bauer in response to his request for his accounting records; and (4) he had informed

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  Bishop about the investigation and had also sent IRS Forms 2039 to Bishop and Slim

  Ventures, via certified mail, notifying them of the summonses served on the four

  banks. Aplt. App. at 68. The district court concluded, based upon Bauer’s

  declaration, that the government made a prima facie case that the IRS properly issued

  the summonses to Summit Crest and Wells Fargo.

        The district court in turn concluded that petitioners failed to meet their burden

  of refuting the government’s prima facie showing of good faith. In reaching this

  conclusion, the district court noted, in relevant part, that petitioners were claiming

  “that the IRS began its investigation to chill their expressive view that MIS

  transactions are legal.” Aplt. App. at 206. The district court further noted that

  petitioners asserted in support of this claim “that customers and business partners

  [had been] frightened away by the IRS investigation.” Id. at 206–07. The district

  court concluded, however, that “evidence of an alleged adverse effect from an

  investigation is not evidence of improper intent” and that petitioners’ “claim that

  unnamed persons ha[d] been scared off [wa]s both conclusory and not material.” Id.

  at 207. The district court also noted and rejected petitioners’ argument “that the IRS

  ha[d] failed to connect the dots ‘between any purportedly forbidden scheme(s) and

  any specific language in any statute or case precedent.’” Id. Specifically, the district

  court concluded that petitioners “offer[ed] [no] support for the proposition that the

  IRS must prove the illegality of MIS transactions before beginning its investigation”

  and that, in fact, “courts have rejected the notion that the IRS must show probable

  cause to open investigations.” Id. at 207–08. “In short,” the district court concluded

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  that “Petitioners’ arguments amount[ed] to preemptive defenses as to their ultimate

  liability and d[id] not rebut the government’s showing of good faith.” Id. at 208.

        We conclude, petitioners’ appellate arguments notwithstanding, that the record

  on appeal firmly supports the district court’s conclusions. To begin with, there is no

  evidence that supports petitioners’ claim that the IRS’s investigation was motivated

  by an intent to chill their First Amendment rights or to “arbitrarily target Bishop for

  his scholarly legal musings.” Aplt. Br. at 67. To be sure, the record indicates that

  the IRS first became aware of Slim Ventures because of information contained on

  Slim Ventures’ web site promoting MIS. But, importantly, it was not the petitioners’

  mere expression of thought that prompted the IRS to issue the challenged

  summonses. Rather, the record indicates that Bauer first interviewed Bishop and

  learned from him that he and Slim Ventures had been actively promoting MIS for

  profit for a period of approximately three years, averaging three to four transactions

  per month. Bauer in turn learned, after researching Slim Ventures on the IRS’s IRP

  system, that Wells Fargo had paid Slim Ventures a substantial amount of interest in

  2020, suggesting that Slim Ventures held a substantial amount of money with Wells

  Fargo during 2020. All of that information, combined with the IRS’s concern that

  some MIS were being misused to illegally avoid taxes, is what prompted the

  investigation and, in turn, the issuance of the summonses. There is no evidence in

  the record suggesting that Bauer’s motivation was to suppress petitioners’ speech.

  To the contrary, the evidence in the record indicates only that Bauer acted to obtain

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  more information in order to determine whether petitioners were actively engaging in

  a scheme to assist individuals and businesses to illegally avoid paying federal taxes.

        Although petitioners assert that they have no delinquent tax balances, that is

  irrelevant to the question of whether the investigation was implemented in good faith.

  Likewise, the fact that, as petitioners argue, some MIS are considered permissible

  under the IRC does not mean that all variations of such sales are permissible. And,

  indeed, the IRS submitted its own evidence suggesting that some MIS are improper

  under the IRC. In any event, it is not within the scope of our authority, given the

  limited nature of these proceedings, to determine at this point the legality of any MIS

  transactions that Bishop and Slim Ventures may have been involved in or may be

  promoting.

        Petitioners complain that the district court did not “allow a conference or

  hearing on any topic or wait to give Petitioners any opportunity to finish preparing

  and submitting a motion for leave to file a surreply or supplemental brief or anything

  else,” even though “the case involved eight petitions . . . , two petitioners, four

  different targets of the subpoenas situated differently, and a complicated collection of

  issues arcane enough that [the district court] allocated [itself] about 33 pages to

  discuss the situation in [its] own written rulings.” Aplt. Br. at 39–40. Notably,

  however, petitioners do not explain what they would have said in a surreply or

  supplemental brief, nor do they discuss what evidence, if any, they would have

  presented at “a conference or hearing” on their motion to quash. Id. at 39. Thus,

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  they have failed to establish that the district court erred in denying their motion to

  quash based upon the written record that was developed by the parties.

         Petitioners also assert that they “asked [the district court] to analyze and rule

  upon and [sic] entire set of statutes and cases [they] had cited from the onset

  (especially post-Powell legal authorities enhancing and expanding taxpayer

  protections).” Id. at 43. They in turn assert that the district court “committed legal

  error and an abuse of discretion by refusing to even mention (let alone analyze or

  apply) the statutes and cases at any time throughout the case.” Id. at 44 (emphasis

  omitted). Notably, petitioners essentially repeat these arguments in their second

  issue on appeal. As we shall discuss below, none of the statutes and cases cited by

  petitioners call into question the district court’s decision.

         Petitioners make a number of other arguments that have no basis in fact. For

  example, petitioners assert that the IRS’s position is “that [its] power has no limiting

  principle whatsoever and the First Amendment, Powell test, taxpayer protections

  statutes, federal courts, Clarke evidentiary hearings, and other protective features of

  our legal system are de facto vestigial and illusory.”8 Aplt. Br. at 63–64. Nothing in

  the record supports this assertion and we summarily reject it, along with the other,

  similar arguments made by petitioners.

         8
          Petitioners similarly assert that “[t]he IRS urges it is a law unto itself, with
  no limitation other than its own whim” and that “[t]he IRS says it can selectively and
  deliberately target anyone for expensive investigations based solely on disfavored
  speech.” Aplt. Br. at 64. Nothing in the record supports these assertions.
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        Petitioners also assert that the IRS acted in this case “without any indication

  either Petitioner had actually committed any tax violation.” Id. at 65. That is

  incorrect. As we have noted, Bauer’s interview with Bishop led him to believe that

  Bishop and Slim Ventures might be engaged in improper activity involving MIS. In

  any event, the very purpose of an IRS investigation is to determine whether a tax

  violation has occurred. Therefore, to suggest that the IRS must have proof that a tax

  violation occurred before it can conduct an investigation is simply wrong.

        Lastly, petitioners assert that “[t]he IRS invented a precept of MIS tax law

  which hasn’t been declared by any statute or court decision, and the IRS hasn’t

  consistently followed.” Id. Whether there is any validity to this assertion is frankly

  irrelevant to this limited enforcement action. As the district court essentially noted,

  petitioners can assert these arguments if and when the IRS charges them with a tax

  violation related to their promotion of MIS.

        In sum, we conclude there is no merit to petitioners’ assertion that the IRS’s

  investigation, and in turn the challenged summonses, were motivated by an intent to

  infringe upon petitioners’ First Amendment rights.

        2) Did the district court procedurally err and/or ignore controlling precedents
           and statutes?

        In their second issue on appeal, petitioners argue that the district court “erred

  by wholesale ignoring controlling precedents, statutes, and facts demonstrating

  various legal grounds and improper purposes” and also “by short-circuiting litigation

  processes such as the Clarke evidentiary hearing requirement.” Aplt. Br. at 67

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  (capitalization omitted). Petitioners also assert a number of related sub-issues, each

  of which will be addressed below.

               a) Post-Powell taxpayer protection statutes and case law

        Petitioners argue that “[t]he IRS and the District Court refuse[d] to even

  mention post-Powell statutes enacted to protect taxpayers, such as 26 U.S.C.

  § 7605(b),” which states in relevant part that “[n]o taxpayer shall be subjected to

  unnecessary examination or investigations,” “26 U.S.C. § 7602(e),” which petitioners

  assert “curtail[s] IRS use of ‘financial status or economic reality examination

  techniques’” “and various statutes and case law expressly allowing MIS use.” Aplt.

  Br. at 68–69 (emphasis omitted). Petitioners further argue that “[n]either the IRS nor

  the District Court offered a cogent reconciling theory about why statutory plain

  language meaning could be ignored, let alone reconciling Congressional intent, what

  practical role such statutes might have inside or outside the Powell test, or how such

  statutes can be accorded any interpretation to afford meaningful protection for

  taxpayers if the IRS position prevails.” Id. at 69.

        Notably, petitioners fail to cite to a single case holding that the standard of

  review outlined in Powell for challenges to IRS summonses has been altered by any

  of the statutes that they now cite. And for good reason. Nothing in the specific

  statutes cited by petitioners seriously calls into question the standards outlined in

  Powell. For example, 26 U.S.C. § 7605(b), which is cited by petitioners, states that

  “[n]o taxpayer shall be subjected to unnecessary examination or investigations, and

  only one inspection of a taxpayer’s books of account shall be made for each taxable

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  year unless the taxpayer requests otherwise or unless the Secretary, after

  investigation, notifies the taxpayer in writing that an additional inspection is

  necessary.” Although petitioners describe this as a “post-Powell statute,” this

  statutory language was in existence at the time that Powell was issued. See United

  States v. Carey, 218 F. Supp. 298, 299 (D. Del. 1963) (discussing the language of

  § 7605(b)).

         Petitioners also point to 26 U.S.C. § 7602(e) as a “post-Powell” statute that

  could impact the case. Section 7602(e) states that “[t]he Secretary shall not use

  financial status or economic reality examination techniques to determine the

  existence of unreported income of any taxpayer unless the Secretary has a reasonable

  indication that there is a likelihood of such unreported income.” 26 U.S.C.

  § 7602(e). The phrase “financial status or economic reality examination techniques”

  is not defined in the statute, but it appears to refer to an “indirect method” of proof in

  a tax case that relies on reconstructing a defendant’s finances by way of

  circumstantial evidence such as net worth analysis, bank deposits, and cash

  expenditures in excess of reported income. See Chapin v. Internal Revenue Agent,

  2016 WL 383135 (D. Idaho Jan. 8, 2016); United States v. Hart, 70 F.3d 854, 860 n.8

  (6th Cir. 1995) (discussing the indirect method of proof). Petitioners have made no

  attempt to explain the relevance of this statute to their case, and it is not readily

  apparent how the statute is relevant to a challenge to the validity of the summonses at

  issue. Most importantly, nothing in the statute calls into the question the standards

  outlined in Powell that apply in an action to quash or enforce an IRS summons.

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        Finally, petitioners refer to “various statutes and case law expressly allowing

  MIS use.” Aplt. Br. at 68–69 (emphasis omitted). Notably, petitioners do not

  directly cite to any of these purported statutes or cases, and instead cite to three

  locations in the record that supposedly contain references to these statutes and case

  law. A review of the cited record pages, however, fails to produce any such “statutes

  and case law.”

        We therefore conclude that the district court did not ignore any relevant

  post-Powell statutes or cases.

               b) Non-Powell sources for quashing a summons

        Petitioners next argue that the district court “and the IRS have repeatedly

  pretended that Powell is the only avenue or test for quashing IRS summonses, when

  in reality the Powell factor test per se is only one non-exclusive avenue for quashing

  a summons which doesn’t supplant other independent legal avenues or doctrines for

  doing so.” Id. at 69 (emphasis in original). Petitioners suggest that other such

  avenues include “the First Amendment, various taxpayer protection statutes, and an

  entire line of post-Powell precedents with other additional parallel, non-supplanted

  summons tests involving ambiguity, fishing expeditions, disproportionality,

  relevance, etc.” Id. at 70.

        The First Amendment cases cited by petitioners, however, are irrelevant for

  two reasons. First, as we have already concluded, petitioners have failed to establish

  that the IRS’s investigation of them was based solely on protected speech or was

  intended to infringe on their First Amendment rights. Second, none of the cases cited

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  by petitioners deal with IRS summonses, and thus are all clearly distinguishable. See

  id. at 25 n.14 (citing various First Amendment cases).

        As for the so-called “taxpayer protection statutes,” petitioners point only to 26

  U.S.C. §§ 7602(e) and 7605(b). As discussed above, both of these statutes are

  irrelevant to the question of whether the summonses in this case should be enforced.

        According to petitioners, the “entire line of post-Powell precedents” that they

  refer to in their opening brief holds that (a) “[t]he IRS must make a showing of

  relevance tying purposes, theories and requested records in a valid, connect-the-dot

  fashion for the burden to shift to the Petitioner and for a Summons to be valid,” (b)

  “[t]he IRS isn’t entitled to ‘carte blanche discovery,’” (c) “a summons will not be

  enforced if ‘overbroad and disproportionate’ to the investigation, or a mere ‘fishing

  expedition’ through a taxpayer’s records that ‘might’ uncover something about

  someone.” Aplt. Br. at 27–28 n.19. Even assuming this to be true, it is clear from

  the record that the IRS has established that the challenged summonses are relevant,

  not overly broad, and not intended as a “fishing expedition” into petitioners’ records.

        That leaves only petitioners’ reference to “other additional parallel,

  non-supplanted summons tests involving ambiguity, fishing expeditions,

  disproportionality, relevance, etc.” Id. at 70. Notably, petitioners do not actually cite

  to or otherwise describe any of these purported “tests.”

        Thus, petitioners have failed to establish that the district court ignored relevant

  precedent in denying their motion to quash the summonses.

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               c) Did the district court ignore controlling case law?

        Petitioners next assert that the district court “ignored entire lines of controlling

  cases . . . requiring the summonses be quashed under the First Amendment and also

  under the “impermissible purpose” factor for the core Powell/Clarke test.” Id. at 71

  (capitalization omitted).

        In support, petitioners first assert “that the District Court wholly ignored

  Bantam Books, Inc. v. Sullivan, [372 U.S. 58 (1963)] and numerous other of

  Petitioners’ cases ruling Government investigations and summons cannot be used to

  chill or retaliate against disfavored First Amendment speech.” Id. at 71–72. Most of

  the cases cited by petitioners, however, have nothing to do with the IRS or

  summonses, and thus they have little, if any, relevance to this case.9 Petitioners do

  cite to a 1985 Tenth Circuit case, United States v. Church of World Peace, 775 F.2d

  265 (10th Cir. 1985), in which this court set aside a district court’s order enforcing an

  IRS summons for “all the books, records and accounts of the Church of World

  Peace,” including “a list of members and names of persons for whom marriage

  ceremonies were performed.” Id. at 265. That case is factually distinguishable,

  however, because this court was concerned in that case about the IRS’s request for a

  membership list. No such request is at issue in the case at hand.

        9
          In Bantam Books, for example, the Supreme Court held that the acts and
  practices of the Rhode Island Commission to Encourage Morality in Youth, in
  declaring certain publications objectionable for sale, distribution or display to youths
  under 18 years of age, were unconstitutional. 372 U.S. at 71. The case did not
  involve either the IRS or any type of summons.
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        Petitioners also cite to an unpublished decision from the United States District

  Court for the Southern District of Ohio, Lightborne Publ’g, Inc. v. Citizens for Cmty.

  Values, No. 1:08-CV-00464, 2009 WL 778241 (S.D. Ohio March 20, 2009), that they

  suggest involved the IRS’s “use[] [of] threats and investigation to suppress speech.”

  Aplt. Br. at 72 n.112. The IRS, however, had no involvement in that case. Thus, it is

  inapposite.

        Ultimately, petitioners have, as discussed above, failed to provide any

  evidence that would have allowed the district court to reasonably find that either the

  IRS investigation or the challenged summonses were intended to chill petitioners’

  First Amendment rights or to retaliate against petitioners for “disfavored First

  Amendment speech.” To the contrary, the record establishes that the issuance of the

  summonses was prompted, in large part, by Bishop’s own admission that Slim

  Ventures had engaged in numerous, and what appeared to Bauer to be questionable,

  MIS transactions for profit over a period of years.

                d) Petitioners’ concluding arguments

        Finally, petitioners argue that “[t]he district court erroneously ignored entire

  lines of cases . . . requiring the summonses be quashed under principles asserted by

  petitioners related to ‘relevance,’ ‘realistic expectation rather than an idle hope,’

  prohibition against ‘overbroad’ and ‘disproportionate’ ‘rambling expeditions’ and

  ‘fishing expeditions,’ as independent theories and also as incorporated under the

  ‘impermissible purpose’ and ‘relevance’ factors for the core Powell/Clarke test.”

  Aplt. Br. at 75 (capitalization omitted and placement of commas corrected). We

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  conclude that this argument is merely a rehash of all of the previous arguments made

  by petitioners elsewhere in their opening brief. We therefore summarily reject it.

                                            IV

        The judgments of the district court are AFFIRMED.

                                             Entered for the Court

                                             Mary Beck Briscoe
                                             Circuit Judge

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