United States District Court, D. Delaware
JERRY V. SMITH, Petitioner,
INTERNAL REVENUE SERVICE, Respondent.
HONORABLE LEONARD P. STARK, UNITED STATES DISTRICT COURT.
Wilmington this 29th day of January,
2018, having reviewed the petitions filed by Jerry
V. Smith ("Petitioner") to quash third-party
summons issued by the Internal Revenue Service
("IRS"), as well as the papers filed in connection
therewith, IT IS HEREBY ORDERED that the
petitions to quash (Misc. No. 16-79 D.I. 1; Misc. No. 16-165
D.I. 1) are DENIED, for the reasons that
Petitioner did not file federal tax returns between at least
2009 and 2015. In order to determine Petitioner's federal
tax liability for tax years 2009 through 2014, on February
24, 2016, IRS agent Jeffrey Marino issued an IRS third-party
summons to Bank of America for Petitioner's bank records.
(Misc. No. 16-79 D.I. 2-1 ¶ 10) On March 11, 2016,
Petitioner filed a timely motion to quash. (Misc. No. 16-79
May 12, 2016, the IRS issued another third-party summons to
Bank of America, this time for Petitioner's bank records
relating to tax year 2015. (Misc. No. 16-165 D.I. 3-2 ¶
10) On June 6, 2016, Petitioner filed a timely motion to
quash. (Misc. No. 16-165 D.I. 1)
Title 26 of the United States Code section 7601 gives the IRS
a mandate to investigate "persons ... who may be
liable" for taxes. To enforce this mandate, the IRS has
been given the power to examine records, to issue summonses
(to the taxpayer or to a third party), and to take testimony
for purposes of (1) ascertaining the correctness of any tax
return, (b) making a tax return where none has been made, (c)
determining the tax liability of any person, (d) collecting a
tax liability, or (e) inquiring into any offense connected
with the administration or enforcement of the internal
revenue laws. 26 U.S.C. § 7602; see also Donaldson
v. United States, 400 U.S. 517, 523-524 (1971),
abrogated on other grounds by 26 U.S.C. § 7609.
the legality of a summons is questioned, the burden is on the
IRS to demonstrate: (a) the summons was issued for a
legitimate purpose; (b) the summons sought information that
may be relevant to that purpose; (c) the information sought
was not already within the possession of the IRS; and (d) all
administrative requirements were met. See United States
v. Clarke, 134 S.Ct. 2361, 2365 (2014) (citing
United States v. Powell, 379 U.S. 48, 57-58 (1964)).
In addition, there must not have been any criminal referrals
to the Department of Justice regarding the taxpayer.
See 26 U.S.C. § 7602(d); United States v.
Garden State Nat'l Bank, 607 F.2d 61, 68-69 (3d Cir.
record includes two declarations of Agent Marino, which are
identical in all material respects, other than that the first
declaration relates to the first summons (see Misc.
No. 16-79 D.I. 2-1) while the second declaration relates to
the second summons (see Misc. No. 16-165 D.I.
3-2). The issues presented in the two motions
are substantively identical, differing only in the tax years
concerned. Therefore, the Court addresses both motions
together. As explained below, the two declarations satisfy
each of the requirements set out above. See generally
Grandup v. United States, 2015 WL 3507966 (D. Del. June
Agent Marino issued the summonses for the legitimate purpose
of determining Petitioner's federal tax liability for the
years 2009 through 2015. (See Misc. No. 16-79 D.I.
2-1 ¶ 11; Misc. No. 16-165 D.I. 3-2 ¶ 11; see
also 26 U.S.C. § 7602)
bank records sought from Bank of America may be relevant to
determining Petitioner's tax liability for tax years 2009
through 2015 by, e.g., revealing income, the existence of
other income-producing assets, or the existence of other bank
accounts owned by petitioner that are currently unknown to
the IRS. (See Misc. No. 16-79 D.I. 2-1 ¶ 11;
Misc. No. 16-165 D.I. 3-2 ¶ 11; see also United
States v. Rockwell Intern., 897 F.2d 1255, 1263 (3d Cir.
According to Agent Marino's declarations, the requested
bank records are not already in the IRS's possession.
(Misc. No. 16-79 D.I. 2-1 ¶ 12; Misc. No. 16-165 D.I.
3-2 ¶ 12)
third-party summons issued by the IRS may be served by
certified or registered mail to the last known address of the
summoned party. See 26 U.S.C. § 7603(b). Agent
Marino complied with the service requirement by sending a
copy of the first summons via certified mail to Bank of
America, N.A., Legal Order Processing, 800 Samoset Drive,
DE5-024-02-08, Newark, Delaware, 19713. (See Misc.
No. 16-79 D.I. 2-1 ¶ 10) The IRS is also required to
provide notice of such a third-party summons to the taxpayer.
See 26 U.S.C. § 7609(a). Agent Marino complied
with this notice requirement by contemporaneously sending a
copy of the summons to Petitioner via certified mail at his
last known address. (See Misc. No. 16-79 D.I. 2-1
¶ 10) Although Agent Marino's second declaration
does not specifically indicate how he complied with the
service and notice requirements for the second summons, he
does declare: "All administrative steps required by the
Internal Revenue Code for issuance of a summons have been
taken." (Misc. No. 16-165 D.I. 3-2 ¶ 13) Petitioner
does not argue to the contrary and the record reveals no
basis to doubt that all required administrative steps were
taken. In fact, in his motion Petitioner alleges that the
second summons was issued to Bank of America (Misc. No.
16-165 D.I. 1 ¶ 2); and it appears Petitioner received a
copy on May 16, 2016 (Misc. No. 16-165 D.I. 1-6 at page 1 of
summons may be issued or enforced if (i) the IRS has
recommended to the Attorney General either a grand jury
investigation or the criminal prosecution of a taxpayer, or
(ii) the Department of Justice has requested an
individual's tax return information from the IRS pursuant
to 26 U.S.C. § 6103(h)(3)(B). See 26 U.S.C.
§ 7602(d)(2). Agent Marino declares that there was no
Justice Department referral in effect with respect to
Petitioner at the time he mailed the first or second
summonses. (Misc. No. 16-79 D.I. 2-1 ¶ 14; Misc. No.
16-165 D.I. 3-2 Â¶ 14)
Because the IRS has met its burden to show that the
requirements for a valid summons have been met, the burden
shifts to Petitioner to show, through particularized factual
averments, that the IRS is not acting in good faith or that
enforcement of the summons would constitute an abuse of the
Court's process. See Garden State, 607 F.2d at
71; Godwin v. United States, 564 F.Supp. 1209, 1213
(D. Del. 1983). Petitioner has failed to meet his burden.
Petitioner contends broadly that issuance of IRS summonses
"is an act of attempted extortion" and
"nothing but an illegal fishing expedition, " and
further that "the IRS has no authority to demand that my
personal documents and records in the possession of Bank of
America be turned over to them for any purpose."
(E.g., Misc. No. 16-165 D.I. 1 ¶ 3) He further
argues that the federal tax system is one of "voluntary
compliance, " meaning that he is under no obligation to
file tax returns, and that if he were required to file tax
returns this would violate his right against
self-incrimination, protected by the Fifth Amendment to the
United States Constitution. (E.g., Misc. No. 16-79
D.I. 3 ¶ B; Misc. No. 16-165 D.I. 1 ¶¶ 3, 5,
7) Petitioner cites no authority to support his contentions.
They are frivolous, as indicated by the statutory and
judicial authorities cited throughout this Memorandum Order.
See also United States v. Evans,356 Fed.Appx. 580,
582 (3d Cir. 2009) ("Evans claimed that no legal
authority required him to pay income tax on his wages, [and]
the filing of a tax return would violate his Fifth ...