Mann v. United States

Full title: CAROL B. MANN, Petitioner, v. UNITED STATES OF AMERICA, Respondent

Court: United States District Court, S.D. California

Date published: Nov 9, 2005

CASE NO. 05cv1439-IEG(POR) (S.D. Cal. Nov. 9, 2005)

Opinion

CASE NO. 05cv1439-IEG(POR).

November 9, 2005

ORDER GRANTING GOVERNMENT'S MOTION TO DISMISS [DOC NO. 4]

IRMA GONZALEZ, District Judge

The Internal Revenue Service ("IRS") has issued a summons to the Rancho Santa Fe National Bank ("Rancho Santa Fe") in Escondido, California, for financial records related to Petitioner Carol B. Mann for the years 2002 and 2003. On July 18, 2005, Ms. Mann filed a petition to quash the IRS summons, arguing that she never received notice of the third-party summons as required by 26 U.S.C. § 7609(a)(1). Ms. Mann also argues that the IRS summons exceeds administrative authority because the IRS seeks the information in support of a civil penalty proceeding or criminal inquiry.

The government now moves to dismiss Ms. Mann's petition, arguing that the petition was filed beyond the 20-day jurisdictional time period set forth in 26 U.S.C. § 7609(b)(2)(A). Ms. Mann has filed an opposition, and the government has filed a reply. This motion is appropriate for submission on the papers and without oral argument pursuant to Local Rule 7.1(d)(1), and the November 7, 2005 hearing is VACATED. For the reasons explained below, the government's motion to dismiss is GRANTED and this petition to quash is DISMISSED.

Background

Revenue Agent Yvonne Soto-Gasso is conducting an examination of the income tax liabilities of Petitioner Carol B. Mann for the years 2001 through 2003. [Declaration of Yvonne Soto-Gasso in support of motion to dismiss ("Gasso Decl."), at ¶ 2.] In furtherance of that examination, the IRS issued a summons to Rancho Santa Fe for financial records relating to Ms. Mann for the years 2002 and 2003. [Gasso Decl., ¶ 3.] In particular, the summons requests documents pertaining to bank accounts, loans, and credit/debit/charge cards of Ms. Mann. [Id.]

On June 9, 2005, Revenue Agent Yvonne Soto-Gasso directed that an attested copy of the summons be sent to Rancho Santa Fe as a third-party recordkeeper, by certified mail. On the same date, Revenue Agent Gasso directed that a copy of the summons be provided to Ms. Mann by certified mail to her last known address. [Gasso Decl., ¶ 5-6.] The summons and notice of summons were both sent by certified mail on June 14, 2005. [Id., Exhibits 2 and 3.] The United States Postal Service attempted delivery to Ms. Mann at her last known address as indicated on the IRS envelope on June 15, 20, and 30, 2005. [Gasso Decl., ¶ 6 and Exhibit 3.] The envelope was subsequently returned to the IRS as unclaimed. [Id.]

On July 19, 2005, Ms. Mann filed this petition to quash the IRS summons issued to Rancho Santa Fe. [Docket No. 1.] On the same date, Ms. Mann sent a copy of the petition, by certified mail, to the United States Attorney General, the United States Attorney for the Southern District of California, the IRS, and Rancho Santa Fe. [Declaration of Daniel J. Treuden in support of opposition to motion to dismiss ("Treuden Decl."), ¶ 4 and Exhibit B.] On September 28, 2005, the government filed the current motion to dismiss the petition.

Discussion

The government moves to dismiss the petition under Fed.R.Civ.P. 12(b)(1) for lack of jurisdiction.¹ The United States is immune from suit unless there is a valid waiver of sovereign immunity. Valdez v. United States, 56 F.3d 1177, 1179 (9^th Cir. 1995).

1 The government also moves to dismiss the petition under Fed.R.Civ.P. 12(b)(5) for failure to effect service as required by Fed.R.Civ.P. 4(i). Because the Court concludes Ms. Mann failed to meet the jurisdictional time period for filing her petition, the issue of service is moot.

Section 7609(b) is the exclusive method by which a taxpayer can challenge a summons issued by the IRS to a third-party recordkeeper. The procedures for filing a petition to quash are set forth in § 7609(b) as follows:

(A) In general. — Notwithstanding any other law or rule of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to begin a proceeding to quash such summons not later than the 20^th day after the day such notice is given in the manner provided in subsection (a)(2). In any such proceeding, the Secretary may seek to compel compliance with the summons.

Pursuant to subsection (b)(2)(A), the petition to quash must be filed within 20 days after notice of the summons is given to the taxpayer. This 20-day period is jurisdictional, and the court must dismiss a petition not filed within that time period.Ponsford v. United States, 771 F.2d 1305, 1309 (9^th Cir. 1985); Clay v. United States, 199 F.3d 876, 879 (6^th Cir. 1999); Faber v. United States, 921 F.2d 1118, 1119 (10^th Cir. 1990). Ms. Mann filed her petition to quash on July 19, 2005, 35 days after the government sent notice of the summons to her by certified mail at her last known address on June 14, 2005. Thus, on its face, the petition appears untimely.

In opposition to the government's motion to dismiss, Ms. Mann argues that she never received notice of the Rancho Santa Fe summons such that the time period under § 7609(b)(2)(A) never began to run.² The 20-day time period under that subsection begins to run, however, on the date that notice of the summons is mailed to the taxpayer, not the date on which it is received. Berman v. United States, 264 F.3d 16, 18-19 (1^st Cir. 2001); Clay, 199 F.3d at 878; Stringer v. United States, 776 F.2d 274, 275-76 (11^th Cir. 1985). Section 7609(a)(2) provides that notice given to a taxpayer is "sufficient" if it "is mailed by certified or registered mail to the last known address of such person, or, in the absence of a last known address, is left with the person summoned." That subsection further provides that notice is "sufficient" upon such mailing "even if such person or fiduciary is then deceased, under a legal disability, or no longer in existence." This language evidences an obvious intent to relieve the government of the obligation to provide actual notice to the taxpayer. Berman, 264 F.3d at 19.

2 Ms. Mann asks that the Court hold an evidentiary hearing to resolve the issue of when she received notice. Because the date of certified mailing, rather than the date of receipt, is the only pertinent date, there is no need to hold an evidentiary hearing.

Ms. Mann does not argue that the notice was mailed other than to her last known address. Upon review, the Court notes that the government sent the notice of summons to Ms. Mann by certified mail at the same address it used in May of 2005 to notify Ms. Mann of its examination of her tax liability. [Petition to Quash, Exhibits B and C.] Therefore, the 20-day time period within which Ms. Mann could have filed a petition to quash under § 7609 began to run on the date the IRS sent the notice to her by certified mail, on June 14, 2005. Her petition to quash, filed 35 days later on July 19, 2005, was untimely. There has been no waiver of sovereign immunity, and the petition to quash must be dismissed.³

3 As she does in the petition to quash, Ms. Mann also argues in opposition to the government's motion to dismiss that the IRS summons exceeds administrative authority because the IRS is seeking the information for a purpose other than to investigate her the tax liabilities. Because the petition to quash was not timely filed, the Court does not address this argument.

Conclusion

For the reasons set forth herein, the government's motion to dismiss [Doc. No. 4] is GRANTED and the petition to quash is hereby DISMISSED with prejudice, terminating this case.

IT IS SO ORDERED.