Action Recycling, Inc. v. United States, No. 12-35338 (9th Cir. 2013)
Annotate this CaseAction Recycling moved to quash summonses from the IRS to produce records that Action Recycling had already produced for the IRS to review, arguing that the summonses for those records were issued in violation of the prohibition on summonses for information already in the possession of the IRS. The documents at issue were reviewed by an IRS agent who eventually left the IRS, the IRS then transferred the open investigation to another agent, and the new agent sought to further review the documents. The court held that an IRS Revenue Agent's review of records did not automatically give the IRS permanent possession of all of the information in those records and that a later summons for the same records was permissible under the Supreme Court's decision in United States v. Powell. Accordingly, the court affirmed the district court's denial of the motion to quash.
Court Description: Tax. The panel affirmed the district court’s denial of a motion to quash third-party summonses. An agent of the Internal Revenue Service audited taxpayer’s bank statements and notes but did not make any copies. Later, the IRS served taxpayer with notice of third- party summonses to two banks for the statements that the IRS agent had reviewed and other documents. The panel held that an IRS Revenue Agent’s review of records does not automatically give the IRS permanent possession of all of the information in those records and that a later summons for the same records is permissible under United States v. Powell, 379 U.S. 48 (1964).
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