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United States v. Singh

United States District Court, E.D. California

May 26, 2015

UNITED STATES OF AMERICA, Petitioner,
v.
RAGHVENDRA SINGH, Respondent.

ORDER AND FINDINGS AND RECOMMENDATIONS

EDMUND F. BRENNAN, Magistrate Judge.

This matter[1] was before the court on May 20, 2015, for hearing on the court's order directing respondent Singh to show cause why he should not be compelled to comply with an Internal Revenue Service ("IRS") tax summons. ECF No. 9. Also before the court for hearing was Singh's motions to discharge the court's order to show cause and to quash the tax summons, (ECF Nos. 11, 19), Singh's three "motions to stay" (ECF Nos. 7, 10, 22), and Singh's "Request to Review Collection Due Process Hearing"[2] (ECF No. 12), and Singh's numerous motions for sanctions (ECF Nos. 7, 10, 12, 19, 22), as well as the government's motion to dismiss Singh's counterclaim (ECF No. 20).[3] Trial Attorney Nithya Senra of the Tax Division of the United States Department of Justice appeared on behalf of the government; respondent Singh appeared pro se. For the following reasons Singh's motions for sanctions are denied. Further, it is recommended that Singh's various motions to stay, to discharge the order to show cause and to quash the IRS summons, [4] and to review "Collection Due Process" be denied. It is also recommended that Singh be ordered to comply with the IRS tax summons and that the government's motion to dismiss Singh's counterclaim be granted.

I. Background

On February 4, 2015, the United States filed a petition to enforce an IRS summons. ECF No. 1. According to the petition, Revenue Agent David Palmer is assigned to collect the assessed federal income tax (Form 1040) liabilities for Mr. Raghvendra Singh and Ms. Rawat[5] for tax years 2008, 2009, and 2010. Id. ¶ 4. On December 2, 2014, Agent Palmer issued an Internal Revenue Service summons directing Singh to appear before the agent on January 8, 2015, to give testimony and produce for examination books, papers, records or other data. Id. ¶ 5. This information was sought because it is relevant to the collection of Singh and Rawat's assessed income tax liabilities. Id. ¶ 8. Singh was personally served a copy of the summons on December 4, 2014. Id. ¶ 6. Although he attended the summons hearing, he refused to provide any information or testimony. Id. ¶ 11.

Following the government's application for an order to show cause, Singh was ordered to appear before the court on May 20, 2015, to show cause why he should not be ordered to comply with the summons. ECF No. 9. On April 16, 2015, the government filed a proof of service, indicating that on March 31, 2015, Singh was properly served with a copy of the order to show cause and the petition and its exhibits. ECF No. 17.

II. Motions for Sanctions

In his many pleadings, Singh requests that sanctions be imposed on the IRS for engaging in what he characterizes as illegal conduct, including allegedly misleading this court. See ECF Nos. 7, 10, 11, 12, 22. He asserts in conclusory fashion that the assessed taxes are unlawful and that it is misleading for the government to contend otherwise. But Singh provides no evidence in support of his contention that the government has engaged in any unlawful or deceptive conduct. He simply quarrels with the government's interpretation of the tax laws. Accordingly, his motions for sanctions are denied.

III. Enforcement of IRS Petition

26 U.S.C. § 7602(a) authorizes the IRS to issue summons for the purposes 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." 26 U.S.C. § 7602(a). The IRS is authorized to take the taxpayer's testimony and "examine any books, papers, record, or other data which may be relevant or material to such inquiry." Id.

To enforce a summons, the IRS must establish a prima facie case that (1) there is a legitimate purpose for the investigation; (2) that the material sought in the summons is relevant to that purpose; (3) that the material sought is not already within the possession of the IRS; and (4) the administrative steps required by the Internal Revenue Code have been taken. United States v. Powell, 379 U.S. 48, 57-58 (1964). The burden of establishing a prima facie case is "a slight one, and may be satisfied by a declaration from the investigating agent that the Powell requirements have been met." United States v. Dynavac, Inc., 6 F.3d 1407, 1414 (9th Cir. 1993). Once the government has satisfied its burden, the tax payer then has the heavy burden of showing that there was an abuse of process or lack of institutional good faith. Id. "Enforcement of a summons is generally a summary proceeding to which the taxpayer has few defenses." United States v. Derr, 968 F.2d 943, 945 (9th Cir. 1992). "The taxpayer must allege specific facts and evidence to support his allegations of bad faith or improper purpose." Crystal v. United States, 172 F.3d 1141, 144 (9th Cir. 1999).

Here, the declaration of David Palmer, the investigating agent, establishes that the summons served on Singh is relevant to the collection of Mr. Singh and Ms. Rawat's assessed federal income tax liabilities for the tax years 2008, 2009, and 2010. The information sought concerns the sources of income and various assets from which the IRS can collect unpaid tax liabilities. ECF No. 1-2 ¶ 6. Mr. Palmer further declares that the testimony and documents sought are not already in the possession of the IRS, and that all administrative steps have been followed. Id. ¶¶ 10, 11. Accordingly, the government has made a prime facie showing for enforcement of the summons as required by Powell.

Singh requests that the court discharge the order to show cause[6] and quash the IRS summons. ECF Nos. 11, 19. He repeats his conclusory argument that the IRS has not, and can never, establish a prime facie case for enforcement of the summons and that the "IRS is acting in bad faith, " and has committed "frauds, threats, misrepresentations, conspiracy and several other illegal acts." ECF No. 11 at 2. Singh further argues that the "IRS issued the summons to get the information about others for the collection in this case. Others have nothing to do with the collection in this case."[7] ECF No. 19 at 1. Singh, however, fails to provide any evidence in support of his conclusory allegations and has not satisfied his heavy burden of showing that there was an abuse of process or lack of good institutional good faith.

IV. Motion to Dismiss Respondent's Counterclaim

Singh filed a document entitled "Cross-Complaint, " which the court construes as a counterclaim against the government. ECF No. 5. The government moves to dismiss the counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim. The government argues that the claims asserted in the counterclaim are barred by the Anti-Injunction Act ...


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