United States v. Schofield

          MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATIONS AND ORDER RE: IRS SUMMMONS ENFORCEMENT

          ERICA P. GROSJEAN, Magistrate Judge.

         This matter came on before U.S. Magistrate Judge Erica P. Grosjean on May 19, 2016, under the Order to Show Cause filed March 25, 2016, Doc. #4, and Minute Order filed April 20, 2016, Doc. #6. The order, with the verified petition filed March 22, 2016, and its supporting memorandum, was personally served on Respondent by personally handing the documents to him at 1402 California Avenue, Dos Palos, California, see Doc. #5; the minute order was likewise served on Respondent, see Doc. #7. Respondent did not file an opposition or non-opposition to the verified petition as provided for in the Order to Show Cause. At the hearing on May 19, 2016, Bobbie J. Montoya, Assistant United States Attorney, appeared for Petitioner, and investigating Revenue Officer (RO) Tony Garza was present in the courtroom. Respondent also personally appeared.

         The Verified Petition to Enforce IRS Summons initiating this proceeding, Doc. #1, seeks to enforce an administrative summons (Exhibit A to the petition) issued September 3, 2015. The summons is part of an investigation of the Respondent to secure information needed to collect the following assessed federal income tax Form 940 for the calendar period ending December 31, 2014, and Form 941 for the quarterly periods ending March 31, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011, December 31, 2011, September 30, 2012, December 31, 2012, March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013 and June 30, 2014.

         The Court has reviewed the petition and the supporting documentation. Based on the uncontroverted petition verified by RO Garza and the entire record, the Court makes the following findings:

         (1) The summons issued by RO Garza on September 3, 2015, and served on September 3, 2015, 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 collect the following assessed federal income tax Form 940 for the calendar period ending December 31, 2014, and Form 941 for the quarterly periods ending March 31, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011, December 31, 2011, September 30, 2012, December 31, 2012, March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013 and June 30, 2014.

         (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, Stuart R. Schofield, DMD, to rebut that prima facie showing.

         (8) Although the Respondent indicated that he thought he had complied with the summons and also demonstrated a willingness to cooperate with RO Garza by bringing additional paperwork to the hearing, he did not rebut the prima facie showing. Moreover, the documents he produced were insufficient to be in compliance with the summons. See Declaration of Bobbie J. Montoya, Doc. #10, at ¶ 4. After engaging in a meet and confer, Respondent agreed to produce the outstanding documentary information sought in the summons to RO Garza by no later than June 9, 2016, at the Internal Revenue Service, 2525 Capitol Street, Suite 206, Fresno, California. See Declaration of Bobbie J. Montoya, Doc. #10, at ¶ 6.^[1] The documents Respondent shall produce are as follows:

1) Provide copies of bank statements for WestAmerica Bank, Merced School Employees; Federal Credit Union and Universal Campus Credit Union. Dates: 01/01/2016 through 05/31/2016;

2) Provide copies of mortgage statement for primary residence, 41690 Valeria Ave, Dos Palos, CA 93620. Dates: ...