107 F.3d 19: Valley Escrow Trust, Petitioner-appellant, v. United States of America, Respondent-appellee
United States Court of Appeals, Ninth Circuit. - 107 F.3d 19
Submitted Dec. 11, 1996.*Decided Dec. 13, 1996
Before: HALL, KOZINSKI and HAWKINS, Circuit Judges.
The IRS may obtain by summons any information that "might throw light" on the correctness of a taxpayer's return. David H. Tedder & Assocs., Inc. v. United States, 77 F.3d 1166, 1168 (9th Cir.1996). The summons of Valley Escrow Trust's bank records satisfies this minimal threshold. Although Valley is not itself under investigation, the requested records could help the IRS determine whether disbursements made to Valley by Pacific Group Trust, the investigation's target, were unlawfully funneled back to Pacific's owners. Cf. Neely v. United States, 775 F.2d 1092, 1094 (9th Cir.1985). Likewise, the summons is not overbroad because it solicits records of Valley's transactions with entities other than Pacific. It is reasonable for the IRS to scrutinize every Valley transfer to trace the potentially circuitous flow of funds back to Pacific's owners. Cf. Goldberg v. United States, 789 F.2d 1341, 1342 (9th Cir.1986).