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United States v. Sill

February 24, 2009

UNITED STATES OF AMERICA, AND CHARLES DUFF, REVENUE OFFICER, INTERNAL REVENUE SERVICE, PETITIONERS,
v.
ARTHUR RALPH SILL, RESPONDENT.



The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge

MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATIONS RE: I.R.S. SUMMONS ENFORCEMENT

Taxpayer: ARTHUR RALPH SILL

This matter came before me on February 5, 2009, under the Order to Show Cause filed October 28, 2008, which, with the verified petition and exhibits, was personally served on respondent on October 23, 2008, according to Fed. R. Civ. P. 4(e). Caroline A. Newman appeared for petitioners, and petitioning Revenue Officer Charles Duff was present. Respondent did not file an opposition and did not appear at the hearing.

The Verified Petition to Enforce Internal Revenue Service Summons initiating this proceeding seeks to enforce an administrative summons (Exhibit A to the petition) in aid of Revenue Officer Duff's investigation to determine the existence and amounts of individual income tax liabilities for ARTHUR RALPH SILL, for the taxable years ending December 31, 2001, December 31, 2002, December 31, 2005, December 31, 2006, and December 31, 2007; and to determine financial information for assessed individual income tax liabilities for the tax years ending December 31, 2000, December 31, 2003 and December 31, 2004, and for civil penalties for the periods ending December 31, 2003, December 31, 2004, June 30, 2005, September 30, 2005, and December 31, 2005. Subject matter jurisdiction is invoked under 28 U.S.C. §§ 1340 and 1345, and is found to be proper. Authorization for the action is under I.R.C. §§ 7402(b) and 7604(a) (26 U.S.C.). The Order to Show Cause shifted to respondent the burden of rebutting any of the four requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964).

I have reviewed the petition and documents in support. Based on the uncontroverted verification of Revenue Officer Duff and the entire record, I make the following findings:

(1) The summonses issued by Revenue Officer Charles Duff to respondent Arthur Ralph Sill on May 9, 2008, seeking testimony and production of documents and records in respondent's possession, was issued in good faith and for a legitimate purpose under I.R.C. § 7602, that is, to determine the existence and amounts of individual income tax liabilities for ARTHUR RALPH SILL, for the taxable years ending December 31, 2001, December 31, 2002, December 31, 2005, December 31, 2006, and December 31, 2007; and to determine financial information for assessed individual income tax liabilities for the tax years ending December 31, 2000, December 31, 2003 and December 31, 2004, and for civil penalties for the periods ending December 31, 2003, December 31, 2004, June 30, 2005, September 30, 2005, and December 31, 2005.

(2) The statute of limitations has not expired for any of these periods. Respondent did not file returns for the tax years ending December 31, 2000, through December 31, 2007. In general, the IRS must assess taxes "within three years after the [taxpayer's] return was filed." 26 U.S.C. § 6501(a). However, where no return is filed, "the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time." 26 U.S.C. § 6501(c)(3); accord Edwards v. Comm'r, 680 F.2d 1268, 1269 n.1 (9th Cir. 1982) ("Clearly no statute of limitations applies to [a taxpayer] for those years in which she filed no returns at all."). Accordingly, the statute of limitations has not run for respondent's non-assessed individual income tax liabilities for the years ending December 31, 2001, December 31, 2002, December 31, 2005, December 31, 2006, and December 31, 2007. Further, the collection statute of limitations has not run on the assessed individual income tax liabilities for the years December 31, 2000, December 31, 2003 and December 31, 2004, nor on the assessed civil penalty liabilities for the years ending December 31, 2003, December 31, 2004, June 30, 2005, September 30, 2005, and December 31, 2005, because it runs for "ten years after the assessment of the tax." 26 U.S.C. § 6502.

(3) The information sought is relevant to that purpose.

(4) The information sought is not already in the possession of the Internal Revenue Service.

(5) The administrative steps required by the Internal Revenue Code have been followed.

(6) There is no evidence of referral of this case by the Internal Revenue Service to the Department of Justice for criminal prosecution.

(7) The verified petition and its exhibits made a prima facie showing of satisfaction of the requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964).

(8) The burden shifted to respondent, Arthur Ralph Sill, to rebut that ...


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