Petition to Quash IRS Form 2039 Summons, Litigation Tool #05.002-battle
tested legal pleading intended to be filed in federal district court
against any IRS agent who issues administrative summons against you
2039 Summons Form
-older versions of this form issued by the IRS
used to say at the top that it is for citizens living "Abroad".
If you live inside the United States of America, you aren't required
to appear at a summons.
Internal Revenue Manual, Section 5.17.6: Summonses
26 C.F.R. §301.7602-1: Examination of books and witnesses
Authority to Summons:
26 U.S.C. Section 7602(a) discusses the authority to summons.
It states that:
(a) Authority to summon, etc.
For the purpose 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 the liability at law
or in equity of any transferee or fiduciary of any person in respect
of any internal revenue tax, or collecting any such liability, the
Secretary is authorized -
(1) To examine
any books, papers, records, or other data which may be relevant
or material to such inquiry;
To summon the person
liable for tax or required to perform the act, or
any officer or employee of such person, or any person having
possession, custody, or care of books of account containing
entries relating to the business of the person liable for tax
or required to perform the act, or any other person the Secretary
may deem proper, to appear before the Secretary at a time and
place named in the summons and to produce such books, papers,
records, or other data, and to give such testimony, under oath,
as may be relevant or material to such inquiry; and (3) To take
such testimony of the person concerned, under oath, as may be
relevant or material to such inquiry.
Therefore, the IRS
must FIRST establish a liability BEFORE it can summons you. He
must be proven liable with evidence BEFORE he can be summoned.
If they don't meet the burden of proof in demonstrating a liability,
then you aren't required to show up to the summons. Furthermore,
there are only three sections of the entire Internal Revenue Code that
mention the term "liability", and they are:
There are no implementing
regulations under Title 26 that authorize the IRS to summons anyone.
“…we think it
important to note that the Act's civil and criminal penalties attach
only upon violation of regulations promulgated by the Secretary;
if the Secretary were to do nothing, the Act itself would impose
no penalties on anyone.” California Bankers Assn.
v. Shultz, 416 U.S. 21 (1974)
All of the implementing
regulations for 26 U.S.C. Section 7602 are associated with Title 27,
which is the Bureau of Alcohol, Tobacco, and Firearms. Here is
a list of the related parallel authorities for this section, ALL of
which are related to Alcohol, Tobacco, and Firearms and NONE of which
relate in any way with the individual income tax found in 26 U.S.C.
Also, 26 U.S.C. §7601
authorizes the summons to be issued only within an internal revenue
TITLE 26 >
Subtitle F >
CHAPTER 78 >
Subchapter A > § 7601
§ 7601. Canvass of districts for taxable persons and objects
rule The Secretary shall, to the extent he deems it practicable,
cause officers or employees of the Treasury Department to proceed,
from time to time,
through each internal revenue district and inquire after
and concerning all persons therein who may be liable to pay
any internal revenue tax, and all persons owning
or having the care and management of any objects with respect
to which any tax is imposed.
There are NO internal
revenue districts left.
Order 150-02 abolished all of them and disestablished all IRS District
Directors as a result of the IRS Restructuring and Reform Act of 1998.
Therefore, the IRS agent who is executing the summons must prove that
the party summonsed is within a nonexistent internal revenue district
before he can further investigate. He won't be able to to this
and you don't have to go beyond this. If you help him violate
the above requirement by facilitating discover OUTSIDE of an internal
revenue district, then you become an accessory after the fact to a violation
of Constitutional rights in violation of
18 U.S.C. §3. Tell him you won't help him violate the law
until he proves that both the subject of the investigation and you personally
are within an internal revenue district.
26 U.S.C. §7621 authorizes the President to establish internal revenue
districts, and under
Executive Order 10289, he delegated that authority to the Secretary
of the Treasury. Neither the President nor the Secretary of the
Treasury have established any internal revenue district within any state
of the Union.
4 U.S.C. §72 furthermore requires that all public offices shall
be exercised ONLY in the District of Columbia and not elsewhere unless
"expressly provided by law".
TITLE 4 >
CHAPTER 3 > § 72
§ 72. Public offices; at seat of Government
attached to the seat of government shall be exercised in the District
of Columbia, and not elsewhere, except as otherwise expressly provided
Note that the I.R.C.
Subtitle A income tax is a tax upon "public offices" called a "trade
or business". See:
The Trade or Business Scam
Therefore, the hearing
officer at the summons must show that you hold a "public
office" in the United States government or that you are a nonresident
alien with income from "sources within the United States", which means
the federal government, before he can establish a liability for tax
26 U.S.C. §871.
Enforcement of Summons:
26 U.S.C. Section 7604(b) states that there are only FOUR reasons
why a person can be compelled to appear at a summons:
Whenever any person summoned under section
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.
You will note that
the three valid reasons for the summons are information related to (the
titles of the respective sections are shown):
Section 6420: Gasoline used on farms
Section 6421. Gasoline used for certain nonhighway purposes,
used by local transit systems, or sold for certain exempt purposes
Section 6427. Fuels not used for taxable purposes
Click here for a summary of the relationship
of laws that regulate summons.
U.S. Atty Manual §6-5.210 to 6-5.260: Summons Litigation-excellent
summary of tax summons powers
and Instructions Online, Instruction 4.16: Quash all Third Party Summons
and Handle your Summons Skillfully
and Instructions Online, Instruction 4.17: Handle Your Tax Examination
or IRS Meeting Skillfully
What to Do When the IRS Comes Knocking, Form #09.002 (OFFSITE
LINK)-how to respond to IRS collection enforcement. By
IRS Restructuring and Reform Act of 1998,
112 Stat 685, Section 3415: Taxpayers Allowed to Quash all Third Party
Summons-don't cite this code section if you intend to file a
motion in Federal District Court because you have to be a "taxpayer"
to claim its benefits!
Federal Rule of Civil Procedure, Rule 45: Subpoenas-an
IRS administrative summons is simply a species of administrative subpoena
that may only be issued to federal agencies. Everyone else is
a "protected person" and under the Fourth Amendment, any federal district
court should be able to quash such an illegal summons.
Reisman Reisman v. Caplin, 375 U.S. 440 (1964)
This Court has never passed upon the rights of a party summoned
to appear before a hearing officer under 7602. However, the Government
concedes that a witness or any interested party may attack the summons
before the hearing officer. There are cases among the circuits
which hold that both parties summoned and those affected by a disclosure
may appear or intervene before the District Court and challenge
the summons by asserting their constitutional or other claims. In
re Albert Lindley Lee Memorial Hospital, 209 F.2d 122 (C. A. 2d
Cir.); Falsone v. United States, 205 F.2d 734 (C. A. 5th Cir.);
and Corbin Deposit Bank v. United States, 244 F.2d 177 (C. A. 6th
Cir.). We agree with that view and see no reason why the same rule
would not apply before the hearing officer. Should the challenge
to the summons be rejected by the hearing examiner and the witness
still refuse to testify or produce, the examiner is given no power
to enforce compliance or to impose sanctions for noncompliance.
If the Secretary or his delegate wishes to enforce the summons,
he must proceed under 7402 (b), which grants the District Courts
of the United States jurisdiction "by [375 U.S. 440,
446] appropriate process to compel such attendance, testimony,
or production of books, papers, or other data."
Any enforcement action under this section would be an adversary
proceeding affording a judicial determination of the challenges
to the summons and giving complete protection to the witness. In
such a proceeding only a refusal to comply with an order of the
district judge subjects the witness to contempt proceedings.
It is urged that the penalties of contempt risked by a refusal
to comply with the summonses are so severe that the statutory procedure
amounts to a denial of judicial review. The leading cases on this
question are Ex parte Young,
209 U.S. 123 (1908), and Oklahoma Operating Co. v. Love,
252 U.S. 331 (1920). However, we do not believe that this point
is well taken here. In Young certain railroad rates could be tested
only by a failure to comply, which occasioned a risk of both imprisonment
and large fines, regardless of the willfulness of the refusal to
comply. And in Oklahoma Operating Co. the laundry rate fixed by
the Oklahoma Corporation Commission could be tested only by contempt
with a penalty of $500 per day, each day being a separate violation.
On the other hand,
in tax enforcement proceedings the hearing officer has no power
of enforcement or right to levy any sanctions. It is
true that any person summoned who "neglects to appear or to produce"
may be prosecuted under 7210 5 and is
subject to a fine not exceeding [375 U.S. 440, 447]
$1,000, or imprisonment for not more than a year, or
both. However, this statute on its face does not apply where the
witness appears and interposes good faith challenges to the summons.
It only prescribes punishment where the witness "neglects" either
to appear or to produce. We need not pass upon the coverage of this
provision in light of the facts here.
It is sufficient to
say that noncompliance is not subject to prosecution thereunder
when the summons is attacked in good faith.
Petitioners also point to 7604 (b) 7
as posing the risk of arrest should the Commissioner proceed
under that section for an "attachment . . . as for a contempt."
Arguably, [375 U.S. 440, 448] such a sanction,
even though temporary, might be a penalty severe enough to bring
the section within the rationale of Young, supra, but we do not
so read 7604 (b). This section provides that where "any
person summoned . . . neglects or refuses to obey such summons"
the Commissioner may proceed before the United States Commissioner
or the judge of the District Court "for an attachment against him
as for a contempt." Upon a showing of "satisfactory proof,"
an attachment for the person so refusing is issued and he is brought
before the United States Commissioner or the district judge who
proceeds "to a hearing of the case." Upon the hearing the United
States Commissioner or the district judge may "make such order as
he shall deem proper, not inconsistent with the law for the punishment
of contempts . . . ." The predecessor of 7604 (b) was adopted by
the Congress in 1864 (13 Stat. 226) at a time when Congress was
greatly concerned with tax collection delay. Cong. Globe, 38th Cong.,
1st Sess. 2440-2441 (1864). The proponents of the bill emphasized
that after arrest the witness could assert his objections to the
summons. Cong. Globe, 38th Cong., 1st Sess. 2997 (1864). It appears
to us that the provision was intended only to cover persons who
were summoned and wholly made default or contumaciously refused
to comply. Section 7402 (b) came into the statute in 1913 (38 Stat.
179) and has been uniformly used since that time.
8 As we read the legislative history,
7604 (b) remains in this [375 U.S. 440, 449]
comprehensive procedure provided by Congress to cover only a default
or contumacious refusal to honor a summons before a hearing officer.
But even in such cases, just as in a criminal prosecution under
7210, the witness may assert his objections at the hearing before
the court which is authorized to make such order as it "shall deem
proper." 7604 (b).
Furthermore, we hold
that in any of these procedures before either the district judge
or United States Commissioner, the witness may challenge the summons
on any appropriate ground. This would include, as the
circuits have held, the defenses that the material is sought for
the improper purpose of obtaining evidence for use in a criminal
prosecution, Boren v. Tucker, 239 F.2d 767, 772-773, as well as
that it is protected by the attorney-client privilege, Sale v. United
States, 228 F.2d 682. In addition, third parties might intervene
to protect their interests, or in the event the taxpayer is not
a party to the summons before the hearing officer, he too, may intervene.
See In re Albert Lindley Lee Memorial Hospital, supra, and Corbin
Deposit Bank v. United States, supra. And this would be true whether
the contempt be of a civil or criminal nature. Cf. McCrone v. United
307 U.S. 61 (1939); Brody v. United States, 243 F.2d 378. Finally,
we hold that such orders are appealable. See O'Connor v. O'Connell,
253 F.2d 365 (C. A. 1st Cir.); In re Albert Lindley Lee Memorial
Hospital, supra; Falsone v. United States, supra; Bouschor v. United
States, 316 F.2d 451 (C. A. 8th Cir.); Martin v. Chandis Securities
Co., 128 F.2d 731 (C. A. 9th Cir.); D. I. Operating Co. v. United
States, 321 F.2d 586 (C. A. 9th Cir.). Contra, Application of Davis,
303 F.2d 601 (C. A. 7th Cir.). It follows that with a stay order
a witness would suffer no injury while testing the summons.
Nor would there be a difference should the witness indicate -
as has Peat, Marwick, Mitchell & Co. - that he [375
U.S. 440, 450] would voluntarily turn the papers over
to the Commissioner. If this be true, either the taxpayer or any
affected party might restrain compliance, as the Commissioner suggests,
until compliance is ordered by a court of competent jurisdiction.
This relief was not sought here. Had it been, the Commissioner would
have had to proceed for compliance, in which event the petitioners
or the Bromleys might have intervened and asserted their claims.
Finding that the remedy specified by Congress works no injustice
and suffers no constitutional invalidity, we remit the parties to
the comprehensive procedure of the Code, which provides full opportunity
for judicial review before any coercive sanctions may be imposed.
Cf. United States v. Babcock,
250 U.S. 328, 331 (1919).
v. Caplin, 375 U.S. 440 (1964)]
United States v. Powell, 379 U.S. 57 (1964)
"We do not equate necessity
as contemplated by this provision with probable cause or any like notion.
If a taxpayer has filed fraudulent returns, a tax liability exists
without regard to any period of limitations. Section 7602 authorizes
the Commissioner to investigate any such liability.
12 If, in order to determine the existence
or nonexistence of fraud in the taxpayer's returns, information in the
taxpayer's records is needed which is not already in the Commissioner's
possession, we think the examination is not "unnecessary" within the
meaning of 7605 (b). Although a more stringent interpretation is
possible, one which would require some showing of cause for suspecting
fraud, we reject such an interpretation [379 U.S. 48, 54]
because it might seriously hamper the Commissioner in carrying
out investigations he thinks warranted, forcing him to litigate and
prosecute appeals on the very subject which he desires to investigate,
and because the legislative history of 7605 (b) indicates that no severe
restriction was intended......"
"We are asked to
read 7605 (b) together with the limitations sections in such a way as
to impose a probable cause standard upon the Commissioner from the expiration
date of the ordinary limitations period forward. Without some solid
indication in the legislative history that such a gloss was intended,
we find it unacceptable. 15 Our reading
of the statute is said to render the first clause of 7605 (b) surplusage
to a large extent, for, as interpreted, the clause adds little beyond
the relevance and materiality requirements of 7602. That clause does
appear to require that the information sought is not already within
the Commissioner's possession, but we think its primary purpose was
no more than to emphasize the responsibility of agents to exercise prudent
judgment in wielding the extensive powers granted to them by the Internal
Revenue Code. 16 [379
U.S. 48, 57] "
"This view of the statute
is reinforced by the general rejection of probable cause requirements
in like circumstances involving other agencies. In Oklahoma Press Pub.
Co. v. Walling,
327 U.S. 186, 216 , in reference to the Administrator's subpoena
power under the Fair Labor Standards Act, the Court said "his investigative
function, in searching out violations with a view to securing enforcement
of the Act, is essentially the same as the grand jury's, or the court's
in issuing other pretrial orders for the discovery of evidence, and
is governed by the same limitations," and accordingly applied the view
that inquiry must not be "`limited . . . by forecasts of the probable
result of the investigation.'" In United States v. Morton Salt Co.,
338 U.S. 632, 642 -643, the Court said of the Federal Trade Commission,
"It has a power of inquisition, if one chooses to call it that, which
is not derived from the judicial function. It is more analogous to the
Grand Jury, which does not depend on a case or controversy for power
to get evidence but can investigate merely on suspicion that the law
is being violated, or even just because it wants assurance that it is
not." While the power of the Commissioner of Internal Revenue derives
from a different body of statutes, we do not think the analogies to
other agency situations are without force when the scope of the Commissioner's
power is called in question. 17 "
"Reading the statutes
as we do, the Commissioner 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 [379 U.S. 48, 58] information sought
is not already within the Commissioner's possession, and that the administrative
steps required by the Code have been followed - in particular, that
the "Secretary or his delegate," after investigation, has determined
the further examination to be necessary and has notified the taxpayer
in writing to that effect. This does not make meaningless the adversary
hearing to which the taxpayer is entitled before enforcement is ordered.
18 At the hearing he "may challenge the
summons on any appropriate ground," Reisman v. Caplin,
375 U.S. 440 , at 449. 19 Nor does
our reading of the statutes mean that under no circumstances may the
court inquire into the underlying reasons for the examination. It is
the court's process which is invoked to enforce the administrative summons
and a court may not permit its process to be abused.
20 Such an abuse would take place if the
summons had been issued for an improper purpose, such as to harass the
taxpayer or to put pressure on him to settle a collateral dispute, or
for any other purpose reflecting on the good faith of the particular
investigation. The burden of showing an abuse of the court's process
is on the taxpayer, and it is not met by a mere showing, as was made
in this case, that the statute of limitations for ordinary deficiencies
has run or that the records in question have already been once examined.
[379 U.S. 48, 59] "
States v. Powell, 379 U.S. 57 (1964)]