United States of America et al v. Whitman, No. 2:2010mc00035 - Document 10 (E.D. Cal. 2010)
Court Description: FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Kimberly J. Mueller on 6/17/10: Recommending that the IRS summonses issued to respondent, Roger P. Whitman, be enforced, and that respondent be ordered to appear at the I.R.S. offices at 4330 Wa tt Avenue, Sacramento, CA., before Revenue Officer David Palmer and Revenue Agent Chung Ngo, or their designated representatives, on the twenty-first day after the filing date of the summons enforcement order, or on a later date and at a time and place to be set in writing by the Revenue Officer or the Revenue Agent. The Clerk shall serve this paper and all future orders upon the respondent. Objections to F&R due within fourteen days. (Kaminski, H)
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United States of America et al v. Whitman Doc. 10 1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT FOR THE 9 EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, DAVID PALMER, Revenue Officer and CHUNG NGO, Revenue Agent, Internal Revenue Service, Case No. 2:10-mc0035 MCE KJM 12 Petitioners, FINDINGS AND RECOMMENDATIONS 13 V. 14 ROGER P. WHITMAN Taxpayer: ROGER P. WHITMAN 15 16 17 Respondent. _________________________________/ This matter came on for hearing on June 9, 2010, on the Order to Show Cause filed 18 April 2, 2010, which, with the verified petition and exhibits, was personally served on 19 respondent in compliance with Fed. R. Civ. P. 4(e) on April 22, 2010. Yoshinori H. T. 20 Himel appeared for petitioners, and petitioning Revenue Officer David Palmer and 21 petitioning Revenue Agent Chung Ngo were present. Respondent did not appear at the 22 hearing. During the hearing, petitioners handed up a copy of an unfiled opposition that 23 respondent served on them. 24 The Verified Petition to Enforce Internal Revenue Service Summons initiating this 25 proceeding seeks to enforce two administrative summonses (Exhibit A to the petition). 26 The first summons is in aid of Revenue Officer David Palmer’s investigation to determine 27 financial information for the collection of assessed U.S. individual income tax liabilities 28 (Form 1040) for the tax years ending December 31, 1997, December 31, 1998, December 1 Dockets.Justia.com 1 31, 1999 and December 31, 2000. The second summons is in aid of Revenue Agent 2 Chung Ngo’s investigation to determine the existence and amounts of U.S. individual 3 income tax liabilities (Form 1040) for the taxable years ending December 31, 2001, 4 December 31, 2002, December 31, 2003, December 31, 2004, December 31, 2005, 5 December 31, 2006, December 31, 2007 and December 31, 2008. 6 Subject matter jurisdiction is proper under 28 U.S.C. §§ 1340 and 1345. 7 Authorization for the action is under I.R.C. §§ 7402(b) and 7604(a) (26 U.S.C.). The 8 Order to Show Cause shifted to respondent the burden of rebutting any of the four 9 requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964). 10 Based on the petition and the uncontroverted verifications of Revenue Officer 11 Palmer and Revenue Agent Ngo and the entire record, the court makes the following 12 findings: 13 (1) The summons issued by Revenue Officer David Palmer to respondent, Roger 14 P. Whitman, on October 5, 2009, seeking testimony and production of documents and 15 records in respondent's possession, was issued in good faith and for a legitimate purpose 16 under I.R.C. § 7602, that is, to determine financial information for the collection of 17 assessed U.S. individual income tax liabilities (Form 1040) for the tax years ending 18 December 31, 1997, December 31, 1998, December 31, 1999 and December 31, 2000. 19 (2) The summons issued by Revenue Agent Chung Ngo to respondent, Roger P. 20 Whitman, on October 12, 2009, seeking testimony and production of documents and 21 records in respondent's possession, was issued in good faith and for a legitimate purpose 22 under I.R.C. § 7602, that is, to determine the existence and amounts of U.S. individual 23 income tax liabilities (Form 1040) for the taxable years ending December 31, 2001, 24 December 31, 2002, December 31, 2003, December 31, 2004, December 31, 2005, 25 December 31, 2006, December 31, 2007 and December 31, 2008. 26 (3) The information sought is relevant to those purposes. 27 (4) The information sought is not already in the possession of the Internal Revenue 28 Service. 2 1 2 3 4 5 6 7 8 9 10 11 (5) The administrative steps required by the Internal Revenue Code have been followed. (6) There is no evidence of referral of this case by the Internal Revenue Service to the Department of Justice for criminal prosecution. (7) The verified petition and its exhibits make a prima facie showing of satisfaction of the requirements set forth in United States v. Powell, supra. (8) The burden shifted to respondent, Roger P. Whitman, to rebut that prima facie showing. (9) Respondent presented no proper argument or evidence to rebut the prima facie showing. (10) Paragraph 7 of the show-cause order filed April 2, 2010, required that 12 opposition be served and filed. Respondent's attempted opposition was dated June 7, 13 2010. It was served on petitioners but was not filed with the court. 14 (11) Service of the attempted opposition was untimely under paragraph 7 of the 15 show-cause order. That paragraph required any opposition to be served at least ten days 16 before the date set for the show-cause hearing. The opposition’s signature date of June 7, 17 2010, was after the initially-set show cause hearing date of June 2, 2010, and was later 18 than 10 days before the continued hearing date of June 9, 2010. 19 (12) Show-cause order paragraph 8 provided that "[o]nly those issues brought into 20 controversy by the responsive pleadings and supported by affidavit will be considered." 21 Respondent’s attempted opposition request referred to a supporting declaration but failed 22 to include any declaration. Thus, there is no evidence before the court in opposition to 23 enforcement. 24 (13) Respondent's failure to file opposition, and his failure to serve timely 25 opposition, waives his venue challenge to enforcement. The unfiled opposition 26 characterizes the question before the court as whether either venue or jurisdiction to 27 entertain the action lies, and specifically subject matter jurisdiction under I.R.C. § 7604(a) 28 (26 U.S.C.). Section 7604(a) is one of two identically-worded statutes authorizing tax 3 1 summons enforcement, the other being I.R.C. § 7402(b). Section 7402(b)'s language 2 (shared with Section 7604(a)) -- "the district court of the United States for the district in 3 which such person resides or may be found" -- is not a grant of subject matter jurisdiction 4 but "is in the nature of a venue provision." United States v. Hankins, 581 F.2d 431, 439 5 n.11 (5th Cir. 1978) ("Montgomery characterizes this statute as a grant of subject matter 6 jurisdiction, but we think this assertion incorrect."). Therefore the question that 7 respondent attempts to raise is properly characterized as a challenge to venue. "It is 8 elementary that venue can be waived if not timely raised." Id. Respondent has waived 9 venue. 10 (14) Respondent's admissions also rebut the fact on which he bases his challenge 11 to venue in this district. The unfiled opposition admits that the proper district for 12 summons enforcement is the district in which the respondent resided at "the filing of this 13 action." It also admits that respondent was a California resident until April 1, 2010. 14 Petitioners initiated this action on March 31, 2010. Thus, the Eastern District of 15 California is the proper venue for this action. 16 Accordingly, IT IS HEREBY RECOMMENDED that the IRS summonses issued 17 to respondent, Roger P. Whitman, be enforced, and that respondent be ordered to appear 18 at the I.R.S. offices at 4330 Watt Avenue, Sacramento, California, 95821, before Revenue 19 Officer David Palmer and Revenue Agent Chung Ngo, or their designated 20 representatives, on the twenty-first day after the filing date of the summons enforcement 21 order, or on a later date and at a time and place to be set in writing by the Revenue 22 Officer or the Revenue Agent, then and there to be sworn, to give testimony, and to 23 produce for examining and copying the books, checks, records, papers and other data 24 demanded by the summons, the examination to continue from day to day until completed. 25 It is further recommended that if the court enforces the summonses, the court retain 26 jurisdiction to enforce its order by its contempt power. 27 28 These findings and recommendations are submitted to the United States District Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and (C) 4 1 and Rule 72-304 of the Local Rules of the United States District Court for the Eastern 2 District of California. Within fourteen days after being served with these findings and 3 recommendations, any party may file written objections with the court and serve a copy 4 on all parties. Such a document should be titled "Objections to Magistrate Judge's 5 Findings and Recommendations." Any reply to the objections shall be served and filed 6 within fourteen days after service of the objections. The District Judge will then review 7 these findings and recommendations pursuant to 28 U.S.C. § 636(b)(1). The parties are 8 advised that failure to file objections within the specified time may waive the right to 9 appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 10 11 12 13 14 The Clerk shall serve this paper and all future orders upon the respondent at the following address: Mr. Roger P. Whitman 25 Miller Farm Lane Brevard, NC 28712 It is SO ORDERED. 15 16 DATED: June 17, 2010. 17 18 19 20 21 22 23 24 25 26 27 28 5
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