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Jay S. Peterson v. United States of America

March 1, 2012

JAY S. PETERSON,
PETITIONER,
v.
UNITED STATES OF AMERICA, INTERNAL REVENUE SERVICE, AND LINDA HAWS RESPONDENTS.



The opinion of the court was delivered by: DuBOIS, J.

MEMORANDUM

I. INTRODUCTION

In this case, petitioner Jay S. Peterson seeks to quash an Internal Revenue Service ("IRS") third-party summons issued in connection with an investigation into petitioner's tax liability for the 2007, 2008, and 2009 tax years. Petitioner argues that the IRS issued the third-party summons illegally. Respondents*fn1 filed an Opposition to Peterson's Petition, which the Court converted into a motion for summary judgment by Order of November 17, 2011. For the reasons that follow, the Court rejects petitioner's claims and grants summary judgment in favor of respondents.

II. BACKGROUND

A. Factual Background

IRS Revenue Agent Linda Haws is currently examining petitioner's income tax liability for the 2007, 2008, and 2009 tax years. (Decl. Revenue Agent Linda Haws ("Haws Decl."), Ex. to U.S.'s Opp'n Pet'n Quash IRS Third Party Summons ("Gov't's Opp'n"), ¶ 3.) According to IRS records, petitioner has not voluntarily filed a tax return since 2001. (Id. ¶ 4.) Pursuant to her investigation, Agent Haws sent petitioner two letters-one on March 8, 2011, and one on March 21, 2011-notifying him that the IRS might contact third parties regarding petitioner's tax liabilities and informing him of his right to request a list of any third parties the IRS contacted. (Id. ¶¶ 6--9; Letter from Linda Haws to Jay S. Peterson (March 8, 2011), Haws Decl. Ex. 1; Letter from Linda Haws to Jay S. Peterson (March 21, 2011), Haws Decl. Ex. 2.) Petitioner never requested such a list. (Haws Decl. ¶ 10.)

Homecomings Financial LLC ("Homecomings"), whose successor is GMAC Mortgage Corporation, was a mortgage company that did business with petitioner. (See id. ¶¶ 11--12.) Agent Haws believed that Homecomings might have records and information relating to the amount of mortgage interest petitioner paid during the relevant tax years. (Id.) On April 19, 2011, Agent Haws issued an IRS administrative summons ("Summons") to Homecomings directing Homecomings to appear at the IRS office in Omaha, Nebraska, on May 19, 2011, and produce records relating to Homecomings's dealings with petitioner. (Id. ¶ 13; Summons, Haws Decl. Ex. 3.) Agent Haws mailed a copy of the Summons by certified mail to petitioner's last known address on April 19, 2011, the same day she issued the Summons to Homecomings. (Haws Decl. ¶ 16, Ex. 5.)

B. Procedural History

Petitioner filed a Petition to Quash IRS Third Party Summons ("Petition") in this Court on May 9, 2011. *fn2 The Petition contains no evidence supporting petitioner's allegations. Respondents filed an Opposition to Petition to Quash IRS Third Party Summons ("Government's Opposition") on July 19, 2011. The Government's Opposition contains documentary evidence supporting the Government's contention that it issued the Summons legally, including, inter alia, an affidavit from Agent Haws and copies of the two letters Agent Haws sent to petitioner. Petitioner filed an Opposition to United States' Motion to Dismiss*fn3 ("Petitioner's Opposition") on August 16, 2011. Respondents filed a Reply in Support of the United States' Opposition to Petition to Quash IRS Third Party Summons ("Government's Reply") on August 25, 2011.

Because the Government's Opposition relied on documentary evidence, the Court converted it into a motion for summary judgment under Federal Rule of Civil Procedure 12(d) by Order of November 17, 2011. In doing so, the Court gave petitioner an opportunity to submit any "material that is pertinent" to his response to the Government's Opposition. Fed. R. Civ. P. 12(d). Petitioner filed a Supplemental Opposition to United States' Motion to Dismiss Pursuant to the Court's Order of November 18, 2011 ("Petitioner's Supplemental Opposition"). Petitioner's Supplemental Opposition does not contain any evidence in support of his allegations.

III. LEGAL STANDARD

When a taxpayer brings a petition to quash a third-party summons, the Government typically opposes the petition to quash and moves to enforce compliance with the summons. In such a situation, courts apply the standard set forth in United States v. Powell, 379 U.S. 48 (1964).*fn4

In this case, the Government has not moved to enforce compliance with the summons. Rather, the Government merely opposes the Petition. When the Government opposes a petition to quash but does not seek to enforce compliance with the summons, "the [G]overnment is not required to establish a prima facie case." Johnson v. United States, No. 05-31, 2005 WL 3277999, at *1 (W.D. Pa. Dec. 2, 2005) (citing Knauss v. United States, 28 F. Supp. 2d 1252, 1254 (S.D. Fla. 1998)). "Rather, 'the burden shifts immediately to the petitioner to establish a valid defense to the summons.'" Id. at *1 (quoting Wilde v. United States, 385 F. Supp. 2d 966, 968 (D. Ariz. 2005)); see also Cosme v. IRS, 708 F. Supp. 45, 48 (E.D.N.Y. 1989). This is true at both the motion-to-dismiss stage and the summary-judgment stage. See Twin Palms Resort, LLC ex rel. Harbour v. United States, 676 F. Supp. 2d 1350, 1353 (S.D. Fla. 2009) (placing burden on petitioner to assert valid defense to IRS third-party summons after converting Government's motion to dismiss into motion for summary judgment).

Because the Court converted the Government's Opposition into a motion for summary judgment under Federal Rule of Civil Procedure 12(d), the summary-judgment standard under Federal Rule of Civil Procedure 56 applies. Under that standard, "the court is required to examine the evidence of record in the light most favorable to the party opposing summary judgment, and resolve all reasonable inferences in that party's favor." Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir. 2007). The party opposing the motion, however, cannot "rely merely upon bare assertions, conclusory allegations or suspicions" to support its claim. Fireman's Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982). After examining the evidence of record, a court should grant summary judgment if "the pleadings, the discovery and disclosure materials on file, and any ...


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