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United States of America v. Stone Randal Beck

September 21, 2012

UNITED STATES OF AMERICA,
PETITIONER,
v.
STONE RANDAL BECK, TAXPAYER: RESPONDENT.



The opinion of the court was delivered by: Gary S. Austin United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS REGARDING I.R.S. SUMMONS ENFORCEMENT STONE RANDAL BECK

This matter came before Magistrate Judge Gary S. Austin on September 14, 2012, under the Order to Show Cause filed July 27, 2012, which, with the verified petition filed July 25, 2012, and its supporting memorandum, was personally served upon the respondent, Stone Randal Beck, on August 16, 2012. Respondent filed a paper entitled "Motion to Dismiss for Lack of Jurisdiction for Want of Appropriate Process," on September 4, 2012, which the court treats as an opposition to petitioner's verified petition to enforce the I.R.S. summons. Petitioner filed a reply to the opposition and requested a finding of frivolousness and a fine, based on United States v. Derr. 968 F.2d 943, 947 (9th Cir. 1992) and Zimmerman v. United States, 198 F.R.D. 535, 537 (E.D. Cal. 2000) (holding that revenue agents are delegated responsibility to issue summonses, citing Derr, and finding the contrary position frivolous). Yoshinori H. T. Himel, Assistant United States Attorney, appeared on behalf of Petitioner, and investigating Revenue Agent Elaine M. Moore was present. Respondent did not appear at the hearing.

The Verified Petition to Enforce IRS Summons initiating this proceeding seeks to enforce an administrative summons (Exhibit A to the petition), which Revenue Agent Moore issued on May 22, 2012. The summons is part of an investigation to determine the correct Federal income taxes and other amounts due from respondent Stone Randal Beck for the tax years ending December 31, 2007, December 31, 2008, December 31, 2009, and December 31, 2010.

Subject matter jurisdiction is invoked under 28 U.S.C. §§ 1340 and 1345, and is found to be proper. I.R.C. §§ 7402(b) and 7604(a) (26 U.S.C.) authorize the government to bring the action. 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, respondent's opposition and petitioner's reply. Based on the uncontroverted verification of the petition by Revenue Agent Moore and the entire record, I make the following findings:

(1) The summons issued by Revenue Agent Elaine M. Moore on May 22, 2012, and served upon respondent, Stone Randal Beck, on May 22, 2012, 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 correct Federal income taxes and other amounts due from respondent Stone Randal Beck for the tax years ending December 31, 2007, December 31, 2008, December 31, 2009, and December 31, 2010.

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

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

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

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

(6) The verified petition and its exhibits made a prima facie showing of satisfaction of the Powell requirements.

(7) The burden shifted to respondent, Stone Randal Beck, to rebut that prima facie showing.

Respondent argues that Revenue Agents lack statutory authority to issue IRS summonses under I.R.C. § 7602 because of I.R.C. § 7608. IRS summonses are issued in three types of investigations: tax determination, tax collection and tax criminal investigations. See I.R.C. § 7602(a) and (b). Revenue Agents repeatedly have been held to have the authority to issue I.R.S. summonses under section 7602 in aid of their tax determination investigations. Derr; Zimmerman. Section 7608 does not change this result, because section 7608 pertains only to certain alcohol, tobacco or firearms investigations, criminal investigations, and undercover investigations.

Respondent's argument to the contrary, an argument apparently sold on an Internet site, ...


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