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United States v. Bernal

United States District Court, E.D. California

June 21, 2017

UNITED STATES OF AMERICA, Petitioner,
v.
RICHARD BERNAL, Respondent.

          FINDINGS AND RECOMMENDATIONS RECOMMENDING THAT PETITION TO ENFORCE IRS SUMMONS BE GRANTED (ECF, 1) OBJECTIONS DUE WITHIN FOURTEEN DAYS

         Currently before the Court is Petitioner United States of America's petition to enforce an Internal Revenue Service (“IRS”) summons, which was filed on April 12, 2017. (ECF No. 1.) For the reasons set forth below, the Court recommends that Petitioner's petition to enforce the IRS summons be granted. The Court held a hearing on June 21, 2017. Petitioner's counsel Bobbie Montoya and Internal Revenue Service (“IRS”) Revenue Officer Lisa R. Lopez (formerly Lisa R. Cumiford) (“Revenue Officer Lopez”) appeared. Respondent did not appear.

         I.

         BACKGROUND

         The petition alleges that Revenue Officer Lopez is conducting an investigation of Respondent Richard Bernal (“Respondent”) concerning the collection information for federal income tax (form 1040) for years ending December 31, 2007, December 31, 2008, and December 31, 2009. On September 12, 2016, Revenue Officer Lopez issued an IRS summons directing Respondent to testify and produce certain documents related to the investigation on October 14, 2016, at the IRS's office in Fresno, California. On September 29, 2016, Revenue Officer Lopez left an attested copy of the summons at the last and usual place of abode for Respondent, 15807 W E Street, Kerman California 93630 by handing it to his daughter, Ericka Bernal, who is over the age of 18. Respondent did not appear on October 14, 2016, or otherwise respond to the summons.

         On April 12, 2017, the instant petition was filed to enforce the IRS summons. On April 17, 2017, an order issued requiring Respondent to show cause why he should not be compelled to obey the IRS summons issued on September 12, 2016. On May 11, 2017, a certificate of service was filed showing that Respondent was served on May 11, 2017, by leaving a copy at the last and usual place of abode for Respondent by handing it to his daughter, Jennifer Donovan, who is over the age of 16 and resides there. Respondent has not responded to the April 17, 2017 order.

         II.

         LEGAL STANDARDS

         Pursuant to 26 U.S.C. § 7602, the IRS has the authority to issue summonses to investigate tax returns, tax liabilities, and the collection of any tax liabilities. Enforcement of IRS summonses is governed by 26 U.S.C. § 7604, which states, in pertinent part:

Whenever any person summoned under section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602 neglects or refuses to obey such summons, or to produce books, papers, records, or other data, or to give testimony, as required, the Secretary may apply to the judge of the district court or to a United States commissioner for the district within which the person so summoned resides or is found for an attachment against him as for a contempt. It shall be the duty of the judge or commissioner to hear the application, and, if satisfactory proof is made, to issue an attachment, directed to some proper officer, for the arrest of such person, and upon his being brought before him to proceed to a hearing of the case; and upon such hearing the judge or the United States commissioner shall have power to make such order as he shall deem proper, not inconsistent with the law for the punishment of contempts, to enforce obedience to the requirements of the summons and to punish such person for his default or disobedience.

26 U.S.C. 7604(b). Jurisdiction of this Court to enforce summonses is provided under 26 U.S.C. § 7402(b).

         In issuing an IRS summons:

...the [government] need not meet any standard of probable cause to obtain enforcement of his summons, either before or after the three-year statute of limitations on ordinary tax liabilities has expired. He must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, that the information sought is not already within the Commissioner's possession, and that the administrative steps required by the Code have been followed....

U.S. v. Powell, 379 U.S. 48, 57-58 (1964). “The government's burden is a slight one, and may be satisfied by a declaration from the investigating agent that the Powell requirements have been met.” U.S. v. Dynavac, Inc., 6 F.3d 1407, 1414 (9th Cir. 1993) (citing U.S. v. Abrahams, 905 F.2d 1276, 1280 (9th Cir. 1990); Liberty Financial Servs. v. U.S., 778 F.2d 1390, 1392 (9th Cir. 1985)). “Once the prima facie case is made, a ‘heavy' burden falls upon the taxpayer to show an abuse of process ... or lack of institutional good faith.” Id. “The burden [on the government] is minimal ‘because the statute must be read broadly in order to ensure that the ...


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