Opinion
MISCELLANEOUS No. 05-68.
May 2, 2005
ORDER
AND NOW, this 2nd day of May, 2005, upon consideration of the petitioner's pro se petition to quash internal revenue summonses (docket entry # 1), the Government's response (docket entry # 3), petitioner's reply (docket entry # 5), and the Government's memorandum (docket entry # 6), and the Court finding that:
(a) Before us is Borelli's motion to quash two administrative summonses IRS Agent Patricia Katzmar served on third-party recordkeepers in connection with the Service's tax investigation of Borelli;
(b) As we emphasized in Cohen v. United States of America, 306 F.Supp.2d 495, 499 (E.D.Pa. 2004), the Service's power to issue administrative summonses is exceedingly broad, and the Supreme Court has analogized it to that of a 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," id. (quoting United States v. Powell, 379 U.S. 48, 57 (1964);
(c) To determine whether the summonses are enforceable, we apply Powell's burden-shifting regime, which first requires the Government to make a prima facie showing that
(1) the investigation will be conducted for a legitimate purpose;
(2) the inquiry may be relevant to that purpose; (3) the information sought is not already within the Commissioner's possession; and (4) the administrative steps the Code requires have been followed, Powell, 379 U.S. at 57-58;
(d) The burden then switches to the petitioner to prove either that the Government has not satisfied one of the elements of its prima facie case or that enforcement of the summonses would equate to an abuse of the Court's process, id.;
(e) As Agent Katzmar highlights in her declaration, the Service issued the summonses for a legitimate purpose: investigating whether Borelli wrongfully failed to file returns for the years 2001 and 2002, see Katzmar Declaration ("Katzmar Dec.") ¶¶ 2, 11, 17;
(f) Also, the information the Service seeks may be relevant to this legitimate purpose because the banks most likely have records reflecting the income Borelli received from his Schedule C business in 2001 and 2002;
(g) Turning to the last Powell elements, the Service does not already have the information it seeks, see id. ¶¶ 9, 16, and the Service has followed the administrative steps the IRC requires, see id. ¶¶ 10, 16; and
In addition to Agent Katzmar's declaration, logic compels this conclusion. If the Service already had the information, why would it go to such great lengths here to obtain it?
(h) The remainder of Borelli's claims, e.g., that the investigation of income tax is an invalid purpose for issuing summonses, the IRC provides no basis for requiring banks to produce records, petitioner isn't a natural person who may be liable for income tax, and Agent Katzmar is not the "the Secretary" for IRC purposes, are all meritless,
It is hereby ORDERED that:
1. The motion to quash is DENIED; and
2. The Clerk of Court shall CLOSE this case statistically.