United States District Court, E.D. California
BENJAMIN B. WAGNER, United States Attorney, YOSHINORI H. T. HIMEL, Assistant United States Attorney, Eastern District of California, Sacramento, CA, Attorneys for Petitioner United States of America.
FINDINGS AND RECOMMENDATIONS AND ORDER RE: I.R.S. SUMMMONS ENFORCEMENT (Doc. 1)
JENNIFER L. THURSTON, Magistrate Judge.
This matter came on before Magistrate Judge Jennifer L. Thurston on November 5, 2014, under the Order to Show Cause filed September 9, 2014. The order, with the verified petition filed August 28, 2014, and its supporting memorandum, was personally served on Respondent at his professional law office on November 13, 2013. Respondent did not file opposition or non-opposition to the verified petition as provided for in the Order to Show Cause. At the hearing, Alyson A. Berg, Assistant United States Attorney, appeared telephonically for Petitioner on behalf of Yoshinori H.T. Himel, Assistant United States Attorney, and investigating Revenue Officer Michael J. Papasergia was present in the courtroom. Respondent appeared at the hearing.
The Verified Petition to Enforce IRS Summons initiating this proceeding seeks to enforce an administrative summons (Exhibit A to the petition) issued November 26, 2013. The summons is part of an investigation of the respondent to secure information needed to determine the correct federal income taxes and statutory additions for the years ending December 31, 2006, December 31, 2007, December 31, 2009, December 31, 2010, December 31, 2011, and December 31, 2012.
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. Based on the uncontroverted petition verified by Revenue Officer Michael J. Papasergia and the entire record, I make the following findings:
(1) The summons issued by Revenue Officer Kathy Ruiz on November 26, 2013, and served on November 26, 2013, 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 secure information needed to secure information needed to determine the correct federal individual income taxes and statutory additions for the years ending December 31, 2006, December 31, 2007, December 31, 2009, December 31, 2010, December 31, 2011, and December 31, 2012.
(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 requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964).
(7) The burden shifted to respondent, Mark Derzon, to rebut that ...