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DISCOVERY IN THE IRS (INTERNAL REVENUE SERVICE) SUMMONS ENFORCEMENT PROCEEDING - LESS CERTAIN THAN DEATH AND TAXES

NCJ Number
61005
Journal
University of Florida Law Review Volume: 31 Issue: 2 Dated: (WINTER 1978) Pages: 321-356
Author(s)
A A OWENS
Date Published
1979
Length
36 pages
Annotation
FOLLOWING AN ANALYSIS OF CASE LAW CONCERNING DISCOVERY FOR THE PURPOSE OF CHALLENGING THE 'GOOD FAITH' OF AN INTERNAL REVENUE SUMMONS, GUIDELINES FOR DETERMINING THE SCOPE OF DISCOVERY ARE SUGGESTED.
Abstract
ALTHOUGH THE INTERNAL REVENUE SERVICE (IRS) IS AUTHORIZED TO SUMMON A TAXPAYER OR THIRD PARTY TO PRODUCE RELEVANT INFORMATION AND TESTIFY UNDER OATH CONCERNING MATTERS REGARDING AN INQUIRY, ENFORCEMENT POWER IS LACKING. THIS POWER IS VESTED INSTEAD IN THE FEDERAL DISTRICT COURTS. MOREOVER, THE SUPREME COURT HAS DETERMINED THAT THE TAXPAYER OR SUMMONED PARTY MUST RECEIVE AN ADVERSARY HEARING, DURING WHICH THE SUMMONS MAY BE CHALLENGED ON 'ANY APPROPRIATE GROUND.' DISCOVERY IS DISCRETIONARY WITH THE TRIAL COURT, AND THE COURTS GENERALLY DISALLOW OR SEVERELY LIMIT DISCOVERY. IN RESPECT OF THE BASES FOR CHALLENGING AN IRS SUMMONS, THE UNITED STATES SUPREME COURT HAS SET FORTH THE FOLLOWING UPDATED REQUIREMENTS FOR ENFORCEMENT OF THE SUMMONS: (1) THE SUMMONS MUST BE ISSUED BEFORE THE IRS RECOMMENDS CRIMINAL PROSECUTION TO THE JUSTICE DEPARTMENT; (2) THE IRS MUST AT ALL TIMES USE THE SUMMONS AUTHORITY IN GOOD FAITH PURSUANT TO A CONGRESSIONALLY AUTHORIZED PURPOSE; AND (3) THE IRS MUST NOT ABANDON THE PURSUIT OF A CIVIL TAX DETERMINATION OR COLLECTION IN AN INSTITUTIONAL SENSE. PARTICULARLY IN ORDER TO DETERMINE IF THE IRS SUMMONS HAS BEEN ISSUED IN GOOD FAITH, DUE PROCESS SHOULD REQUIRE AN EVIDENTIARY HEARING WITH SUFFICIENT TAXPAYER DISCOVERY TO DISCLOSE ANY EXISTING EVIDENCE INDICATING LACK OF GOOD FAITH IN THE IRS ISSUANCE OF THE SUMMONS. WHILE THE VALID GOVERNMENTAL INTEREST IN ENFORCEMENT OF THE INTERNAL REVENUE LAWS IS STRICTLY UPHELD BY THE COURTS, RECOGNITION OF TAXPAYER RIGHTS IS LONG OVERDUE. BY ALLOWING THE TAXPAYER MORE REASONABLE PREHEARING DISCOVERY, THE JUDICIARY COULD APPROPRIATE THESE INTERESTS MORE EVENLY TO ACHIEVE A PROPER BALANCE BETWEEN THE TAXPAYER'S RIGHT TO PRIVACY AND DUE PROCESS AND THE GOVERNMENTAL INTEREST IN THE EXPEDIENT COLLECTION OF INTERNAL REVENUE. FOOTNOTES CITING CASE LAW ARE PROVIDED. (RCB)