United States of America v. Lund
Filing
22
ORDER: Denying Motion to Dismiss Case for Lack of Jurisdiction 5 ; Denying Motions 6 and 9 to Deny Summons Enforcement. Signed on 12/14/11 by Chief Judge Ann L. Aiken. (ljb)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
UNITED STATES OF AMERICA,
Petitioner,
v.
ROBERT A. LUND,
Respondent.
S. Amanda Marshall
United States Attorney
Tim Simmons
Assistant United States Attorney
405 E. 8th Avenue, Suite 2400
Eugene, Oregon 97401
Attorneys
r petitioner
Robert A. Lund
P.O. Box 151
Albany, Oregon 97321
Pro se respondent
Page 1 - ORDER
o R DE R
Civil No. 11-6237-AA
AIKEN, Chief Judge:
This matter arises out of the United States of America'
civil investigation into pro se respondent Robert Lund's income tax
liability for 2001 through 2008, for which he has not filed federal
income tax returns.
Pursuant to this investigation, Revenue Agent Rae Cook ("Agent
Cook")
served
respondent
with
an
IRS
administrative
summons
("Summons") to produce certain designated records, and to appear in
court on May 16, 2011, to provide testimony regarding such records.
Respondent, however, fail
a
to appear.
petition
to
As such, on July 27, 2011,
petitioner
led
enforce
respondent.
In response to this petition,
Order to Show Cause on October 19,
2011;
the
Summons
against
this Court issued an
a hearing was set for
November 8, 2011.
In between October 19 and November 8,
motions: 1) "Motion to Dismiss
'appropriate
Enforcement."
motions.
process'";
At
the
and
hearing,
respondent filed two
r Lack of Jurisdiction for want of
2)
"Motion
this
Court
to
denied
See Transcript of Show Cause Hearing
32, Nov. 8, 2011.
Deny
Summons
respondent's
("Transcript") at
In accordance with respondent's requests, the
Court agreed to issue an additional written "follow-up order."
at
32.
As
such,
this
Court
will
now
briefly
address
substantive merits of respondent's motions.
I
As acting though the Internal Revenue Service ("IRS").
Page 2 - ORDER
the
I.
Motion to Dismiss for Lack of Jurisdiction
Respondent contends that
because pet
ioner
the Summons.
s Court does not have jurisdiction
iled to follow the proper procedure in serving
Specif
lly, respondent argues that the IRS lacked
authority to issue the Summons under 26 U.S.C.
Cook is not a "criminal investigator of
7608 because Agent
§
Intelligence Division"
within the meaning of that statute.
Section 7608 provides the authority for investigating crimes
arising under the Internal Revenue laws.
See 26 U.S.C.
§
7608(b);
see also Internal Revenue Manual, Part 9: Criminal Investigations,
http://www.irs.gov/irm/part9/irm_09 001-002.html
(discussing 26 U. S. C.
§
7608 (b) ).
As discus
at the hearing,
however, Agent Cook's criminal subpoena power pursuant to 26 U.S.C.
§
7608 is "absolutely irrelevant" to this case, as petitioner is
"not proceeding under
instigated
a
civil
that
statute."
investigation;
Id.
Ra ther,
accordingly,
governed by the civil enforcement provisions.
petitioner
petitioner
is
See Transcript at
18, Nov. 18, 2011 ("[t]he government would like to assert this is
only a civil investigation.
It has nothing to do with a criminal
prosecution of referral").
Under those provisions, the IRS is authori
to investigate
the potential civil tax liability of any person.
26 U.S.C.
As
summons
such,
the
IRS
can
issue
an
administrative
§
7601.
for
production of information relevant to determining the tax liabil
of that person.
See 26 U.S.C.
§§
7602(a),
U.S., 172 F.3d 1141, 1143 (9th Cir. 1999)
Page 3 - ORDER
the
y
(b) i see also
i
1996 WL
679495, *1 (D.Or. Sept. 17),
91 F.3d 155 (9th
Secretary may del
e
this authority to
personnel, including revenue
(12)
s.
(defining "Secretary,"
is
defined as
See 26 U.S.C.
or his delegate";
"any
Department
Treasury
cific IRS
7701 (11),
the purposes of 26 U.S.C.
Secretary of the Trea
turn,
r. 1996).
cer,
duly
employee,
authorized
by
\\
§
legate",
in
or
the
Secretary
the
of
of
the
Treasury directly, or indirectly by one or more
ity, to perform the
7602 as
ions of
in the
ion mentioned or
context") .
Accordingly, as discus
at the hearing, revenue agents, such
Cook, are authori
as
to issue and serve c
as well as to receive and
wi
those
summonses,
1 summonses,
the data produced
delegated
when
compliance
that
ty.
See
Transcript at 11, Nov. 8, 2011; see also Oldham v. U.S., 2002 WL
1077311,
s
*5-6
(D.Or. March 21,
to taxpayer who
2002)
iled to
(summons iss
file
by revenue
tax returns was valid);
2001 WL 1589517,
Dec. 18, 2001)
va
(D. Or.
(third-party summons issued by revenue agents was
d).
The
Internal
enforcement
j
*3-4
Revenue
procedures;
sdiction to en
7402(b).
Code
contains
therefore,
the
strict
ORDER
court
has
26 U.S.C.
§
cement, the "IRS must show that: 1)
conducted for a legitimate purpose; 2)
the inquiry will be relevant to such purpose; 3)
4
administrative
administrative summonses.
To obtain such en
investigation will
no
the information
sought is not already with
the Commissioner's possession; and 4)
the administrative steps required by the Internal Revenue Code have
been followed.
Cir. 2001)
Lidas,
Inc. v. U.S., 238 F.3d 1076, 1081 82
(9th
(citing U.S. v. Powell, 379 U.S. 48, 57 58 (1964)).
An affidavit of the investigating revenue agent,
asserting
that the Powell requirements have been satisfied, is sufficient to
establish a prima facie case.
IRS
fulfills
taxpayer
to
its
prima
show
that
Crystal, 172 F.3d at 1144.
facie
the
case,
summons
taxpayer's burden is a heavy one,
the
was
burden
Once the
shifts
to
deficient.
the
The
as "the taxpayer must allege
specific facts and evidence to support his allegations of bad faith
or
improper
omitted) .
purpose."
( citations
Id.
Accordingly,
"courts
and
must
internal
enforce
quotations
administrative
subpoenas unless the evidence sought by the subpoena [is] plainly
incompetent or irrelevant to any lawful purpose of the agency."
EEOC v.
Karuk Tribe Hous.
Auth.,
260 F.3d 1071,
1076
(9th Cir.
2001) (citations and internal quotations omitted); see also U.S. v.
Derr,
968
F.2d
943,
945
(9th
Cir.
1992)
(enforcement
of
an
administrative summons is generally a summary proceeding to which
a taxpayer has few defenses) .
Here, petitioner filed a petition for enforcement accompanied
by the declaration of Agent Cook,
Powell elements had been met.
who testified that all of the
Specifically,
Agent Cook stated
that: 1) the Summons was issued to prepare a return where none had
been filed and to determine
sought
by
the
Page 5 - ORDER
Summons
could
tax
liability;
assist
the
IRS
2)
in
the
information
reconstructing
respondent's income and, thus, his correct tax liability; 3) the
information sought was not already in the IRS's possession; and 4)
all the required administrative steps had been satisfied.
Pet'r's Pet. to Enforce IRS Summons Ex. A, Cook Decl.
13.
Therefore,
petitioner
demonstrated
that
2, 3, 12,
~~
the
See
appropriate
process was followed in issuing the Summons.
As such, at the show cause hearing, respondent was given an
opportunity to rebut petitioner's prima
ie case.
Respondent,
without alleging specific facts or evidence, merely asserted that
Agent Cook lied in her affidavit about her authority to issue the
Summons and that "[sJhe operated outside of her authority" because
she
has
not
been
section 7608.
all
of
designated
respondent's
thus,
a
criminal
Transcript at 10-11,
arguments
Internal Revenue Code that
action;
as
as
is
this Court
failed to postulate a
Nov.
related
not
8,
to
germane
stated at
investigator
2011.
a
Accordingly,
provision
to
under
this
the hearing,
en
of
the
rcement
respondent
legally sufficient challenge or defense.
Therefore, respondent's Motion to Dismiss for Lack of Jurisdiction
is denied.
II.
Motion to Deny Summons Enforcement
Respondent
also
asserts
that
this
Court
should
refuse
to
enforce the Summons because such enforcement would violate his
constitutional rights under the Fourth and Fifth Amendments.
A.
Fourth Amendment
Respondent
Amendment
right
Page 6 - ORDER
argues
from
that
the
unreasonable
Summons
search
violates
and
his
seizure
Fourth
by
the
government.
A summons, however, is not a per se violation of the
Fourth Amendment.
186, 208 (1946).
Okla. Press Publishing Co. v. Walling, 327 U.S.
Moreover, a summons that complies with the Powell
requirements satisfies the Fourth Amendment.
U.S.
391,
401
declaration
n.7
(1976).
satisfied
the
As
discussed
Powell
Fisher v. U.S., 425
above,
requirements;
Agent
Cook's
therefore,
the
Summons does not violate respondent's Fourth Amendment rights.
B.
Fifth Amendment
In addition, respondent contends that the Summons violates his
fth Amendment right to be free
from self-incrimination.
The
Fifth Amendment protects a person from "compelled . . . Testimonial
Communication that is incriminating."
however,
only
protects
speculative possibilit
Amendment
is
"aga
st
Id. at 408.
real
dangers,
The privilege,
not
remote
s"; as such, the applicability of the
contingent
upon
a
clear
showing,
by
the
and
fth
person
invoking the privilege, of a real and substantial danger of selfincrimination by the information sought.
Comm'n, 406 U.S. 472, 478 (1972);
F.2d 1268,
1270
(9th Cir. 1990).
I
I
I
l
t
I
(9th Cir.
Zicarelli v. N.J. State
Edwards v. Comm'r, 680
1982); U.S. v.
Brown,
918 F.2d 82,
84
The court is the "final arbiter" in determining
whether the Fifth Amendment is implicated.
Davis v. Fendler, 650
F.2d 1154, 1160 (9th Cir. 1981).
Regardless, a taxpayer's mere assertion of the right based on
a belief that the testimony may be incriminatory is insu
Hoffman v. U.S.,
341 U.S.
479,
486
cient.
(1951); see also Fisher,
425
U.S. at 410; Davis, 650 F.2d at 1160; U.S. v. Meeks, 719 F.2d 809,
Page 7 - ORDER
812
(5th
Cir.
1983).
pr
lege may not itself be used as a method of evading payment of
lawful taxes."
More
importantly,
"the
fifth
amendment
Edwards, 680 F.2d at 1270 (citing U.S. v. Carlson,
617 F.2d 518, 523 (9th Cir.), cert. denied, 449 U.S. 1010 (1980)).
Here, respondent asserts that, because there is potential for
a
criminal
charge,
information
sought.
discussed above,
he
cannot
be
compelled
Transcript
however,
at
26,
respondent
substant
is
unable
Id.
to
disclose
Nov.
8,
2011.
at 26-27.
establish
it's so
As
Therefore ,
that
1 danger of self-incrimination.
there
ly just a
without more,
is
a
real
and
Further, respondent does
not dispute that he neglected to pay lawfully owed taxes.
9.
the
petitioner stated at the hearing that
"this is not a criminal investigation
civil investigation."
to
at
As such, respondent is unable to articulate a proper basis for
asserting the Fi
Accordingly,
h Amendment as a defense.
respondent's
Motion
to
Dismiss
for
Lack
of
Jurisdiction (doc. 5) and Motions to Deny Summons Enforcement (doc.
6 and 9) are DENIED.
IT IS so
ORDEr-D.
Dated this /
of December 2011.
Ann Aiken
United States District Judge
Page 8
ORDER
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