Summary
In Norfleet v. United States, No. 5:02-CV-57-BR, 2002 WL 1396494 (E.D.N.C. May 22, 2002) (unpublished), aff'd, 48 Fed. Appx. 907, 2002 WL 31399389 (4th Cir. Oct. 25, 2002) (unpublished), the district court held that it lacked jurisdiction to hear the petition to quash because "[b]y failing to serve the United States, plaintiff has not complied with the service requirements of 26 U.S.C. § 7609(b)(2)(B)."
Summary of this case from Tilley v. U.S.Opinion
No. 5:02-CV-57-BR
May 21, 2002
ORDER
This matter is before the court on the petition to quash six administrative summonses pursuant to 26 U.S.C. § 7609. In response to the petition, the government has filed a motion to dismiss. The clerk sent petitioner, who is proceeding pro se, a Roseboro notice. The only document filed by petitioner, since the filing of the motion to dismiss, is a "Notice of Recent Decision, informing the court of the Fourth Circuit's decision affirming dismissal of petitioner's first petition to quash, discussed infra.
Before addressing the instant petition, an examination of petitioner's history before this court is necessary. On 1 October 2001, petitioner filed a petition to quash three administrative summonses issued by the IRS to Centura Bank, Franklin Templeton Investments, and Charles Schwab Co. See Norfleet v. United States, No. 5:01-MC-28-BR (E.D.N.C.),aff'd, No. 02-1152 (4th Cir. May 6, 2002). After a hearing, the court dismissed the petition for lack of jurisdiction on 4 December 2001. The court found that petitioner had failed to serve a copy of the petition on the United States in accordance with Rule 4 of Federal Rules of Civil Procedure, as required by the notice which was sent to the petitioner, IRS Form 2039, Part D. Id. Order of 12/4/01 at 1-2. Specifically, petitioner did not serve the U.S. Attorney for the Eastern District of North Carolina or the Attorney General. Id. at 2.
On 8 January 2002, the IRS re-issued the summonses at issue in the October 2001 petition (with some modifications) as well as issued a summons to Chase Manhattan Bank and served petitioner with copies of the same. (See Pet., Exs. A-F.) On 25 January 2002, petitioner filed the instant petition, challenging the summonses and their issuance on a number of grounds.
Initially, the court notes that the exhibits attached to the petition do not contain a copy of IRS Form 2039, Part D. This form provides the taxpayer with instructions for preparing a petition to quash a third-party summons and identifies who the taxpayer must serve with a copy of the petition — the United States, the person summoned, and the IRS (to the officer who issued the summons). See Norfleet v. United States, No. 5:01-MC-28-BR, Pet., Exs. A-C (E.D.N.C.). Presumably, the IRS uses this form to discharge its obligations under 26 U.S.C. § 7609(a)(1). Pursuant to this provision, when the IRS issues an applicable third-party summons, it is required to serve notice of the summons issued on the taxpayer. See 26 U.S.C. § 7609(a)(1). The notice must be accompanied by a copy of the summons as well as an explanation of the right to bring a proceeding to quash the summons. Id. The notice may also direct to whom the taxpayer must mail a copy of the petition, if the taxpayer begins a proceeding to quash. See id. § 7609(b)(2)(B).
Assuming petitioner did not receive IRS Form 2039, Part D, or any other explanation of the right to bring a proceeding to quash the summonses as required by 26 U.S.C. § 7609(a)(1) or any direction as to whom he must serve a copy of his petition, the court must determine whether the government's failure to provide petitioner with this information invalidates the summonses. For enforcement of a summons, the government must show that the administrative steps required by the Internal Revenue Code have been followed, among other things. See Alphin v. United States, 809 F.2d 236, 238 (4th Cir. 1987). The notice provision of 26 U.S.C. § 7609(a) is one of those administrative steps. See Cook v. United States, 104 F.3d 886, 889 (6th Cir. 1997); Sylvestre v. United States, 978 F.2d 25, 27 (1st Cir. 1992), cert. denied, 507 U.S. 994 (1993); United States v. Texas Heart Inst., 755 F.2d 469, 477-78 (5th Cir. 1985), overruled in part on other grounds by United States v. Barrett, 837 F.2d 1341 (5th Cir. 1988). However, failure to comply with such an administrative step does not necessarily preclude enforcement of a summons, absent prejudice to the taxpayer. See Cook, 104 F.3d at 890 ("[T]he district courts possess discretionary authority to excuse the Service's technical notice errors where the party in interest suffered no actual prejudice."); Sylvestre, 978 F.2d at 28 (same); Texas Heart, 755 F.2d at 478 ("[W]here the taxpayer has received every benefit of the administrative steps required by the Code, a failure by the IRS to meet the technical niceties of the statute will not bar enforcement of the summons." (emphasis in original).).
Here, the step with which the IRS purportedly failed to comply — providing the taxpayer with an explanation of his right to bring a proceeding to quash the summons — can hardly be characterized as a "technical nicety." However, under the unique circumstances of this case, petitioner has suffered no harm due to the government's failure. Petitioner obviously is aware of his right to file a petition, given that he has done so twice. He filed the instant petition in a timely fashion. He received IRS Form 2039, Part D, with copies of the first set of subpoenas issued. Because he previously received the form and the court specifically advised him that he was required to serve the U.S. Attorney for this district and the Attorney General, petitioner is well aware of whom he had to serve with copies of the instant petition. Because petitioner was not prejudiced by the IRS's failure to strictly comply with § 7609(a)'s notice requirements, the court will not quash the summonses on this basis.
Upon further review of the petition, the certificate of service attached to the petition indicates that petitioner served via certified mail the institutions summoned and the IRS agent who issued the summonses. (See Pet. at 6.) However, as with his first petition, petitioner failed to serve the United States via the U.S. Attorney for this district and the Attorney General. As the court recognized in ruling on petitioner's first petition to quash,
IRS Form 2039, Part D, provides that, in addition to the persons summoned and the IRS officer who issued the summons, the petitioner must serve the United States as required by Rule 4 of the Federal Rules of Civil Procedure. Under Rule 4(i)(1),
[s]ervice upon the United States shall be effected (A) by delivering a copy of the summons and of the complaint to the United States attorney for the district in which the action is brought . . . or by sending a copy of the summons and of the complaint by registered or certified mail addressed to the civil process clerk at the office of the United States attorney and (B) by also sending a copy of the summons and complaint by registered or certified mail to the Attorney General of the United States at Washington, District of Columbia . . . .
"[B]ecause § 7609 contains a waiver of the United States' immunity against suit, such waivers must be strictly and narrowly construed, and . . . strict compliance with the pre-conditions to a waiver must be enforced." Wooten v. Comm'r of IRS, No. C2-99-846, 2000 WL 236390, at *2 (S.D. Ohio Jan. 19, 2000) (citations omitted). Otherwise, the court lacks jurisdiction. See id. (dismissing case where petitioner failed to mail copy of petition to IRS agent, although petitioner did mail copy to U.S. Attorney, Attorney General, and Commissioner of IRS); Miller v. United States, No. 1:94CV114, 1994 WL 465816, at *4 (N.D. Ind. June 28, 1994) (dismissing case where petitioner failed to mail copy of petition to IRS agent within 20-day period of statute); Dorsey v. United States, 618 F. Supp. 471, 474 (D. Md. 1985) (summary judgment granted to United States where petitioner mailed copy of petition to office of the IRS agent who issued the summons, but not to the agent's attention).Norfleet v. United States, No. 5:01-MC-28-BR, Order of 12/4/01 at 1-2.
By failing to serve the United States, plaintiff has not complied with the service requirements of 26 U.S.C. § 7609(b)(2)(B) and Rule 4(i)(1) of the Federal Rules of Civil Procedure, and therefore, this court lacks jurisdiction.
In addition, the court lacks jurisdiction over the petition to the extent it challenges institutions summoned who are located outside this district, namely Franklin Templeton Investments and Chase Manhattan Bank. See 26 U.S.C. § 7609(h)(1).
Accordingly, the petition is DISMISSED.
JUDGMENT
Decision by Court. IT IS ORDERED, ADJUDGED AND DECREED that plaintiff's petition to quash is DISMISSED for lack of jurisdiction.