Opinion
No. 5:01-CV-990-F(3)
April 11, 2002
ORDER
This matter is before the court upon a petition to quash four administrative summonses issued by the Internal Revenue Service ("IRS") to Centura Bank ("Centura"), pursuant to 26 U.S.C. § 7609. The Government has responded to such petition and it is now ripe for disposition.
On December 7, 2001, IRS Agent Kathy Grimaldi issued an administrative summons to Centura requesting documents related to all accounts in the name of CJC Enterprise Trust. Shortly thereafter, on December 12, 2001, Agent Grimaldi issued three more summonses to Centura requesting documents related to accounts in the name of ELC Trust, Vaughan Trust, and CJC Personnel Trust. On the same day that the summonses were served by registered mail on Centura, Agent Grimaldi provided notice of issuance to the subject trusts. A copy of each summons, along with the pertinent parts of IRS Form 2039, was sent by certified mail to the last known address of each trust. This address is the same as that of the petitioners in this action.
On July 23, 2001, Agent Grimaldi sent letters to the last known address of each trust, asking them to identify their current trustees and to provide certain documents. Enclosed with each letter was a copy of IRS Form 56, regarding a trustee's fiduciary obligations. None of the trusts responded to the letters. The trustees, therefore, were never identified. Accordingly, the summonses issued by Agent Grimaldi identified only the trusts and notice of such summonses was sent to the last known address of each trust. The Government argues that because the petitioners were not identified in the summonses, they lack standing to bring the instant petition to quash. As stated below, given the straightforward defective service question presented, the court does not address this argument.
On December 27, 2001, Charles and Judy Vaughan filed the instant petition to quash the IRS summonses, alleging numerous defects. In addition to responding to the petition's merits, the Government asserts that this court lacks subject matter jurisdiction over such petition. The court agrees.
There is no dispute that the petitioners initiated these proceedings within the 20-day period set forth in 26 U.S.C. § 7609(b)(2)(A). Nor is there any question that petitioners properly gave notice of this petition to Agent Grimaldi and Centura within that same time period, as required by § 7609(b)(2)(B). The fatal flaw with their petition, however, is that they did not effectuate service on the United States.
Because § 7609 waives the sovereign immunity of the United States, the statute's notice requirements are jurisdictional prerequisites and must be strictly enforced by this court. See Clay v. United States, 199 F.3d 876, 879 (6th Cir. 1999) (dismissing petition to quash because filed twenty-two days after petitioner received notice of the summons); Stringer v. United States, 776 F.2d 274, 275 (11th Cir. 1985) (dismissing petition because filed twenty-one days after petitioner received notice); Dorsey v. United States, 618 F. Supp. 471, 473 (D.Md. 1985) (allowing summary judgment because petitioner mailed process to office of appropriate IRS agent, but did not address it to that agent's attention). Under § 7609(b)(2)(B), a petitioner must serve copies of a petition on not just the IRS and the summoned party — here, Centura — but also on "such office as the Secretary may direct in the notice" attached to the summons. In this case, that notice informed petitioners that they must serve the United States as required by Rule 4 of the Federal Rules of Civil Procedure. Rule 4(i)(1) provides that service on the United States must be effected by: (A) delivering a copy of the summons and complaint to the United States Attorney ("U.S. Attorney") for the district in which the action is brought or mailing a copy of the same by registered or certified mail to the civil process clerk at that U.S. Attorney's office; and (B) sending a copy of the summons and complaint by registered or certified mail to the Attorney General of the United States (the "AG") in Washington, D.C.
Here, the petitioner's certificate of service indicates only that Agent Grimaldi and Centura were served. Nothing in the record otherwise suggests that the U.S. Attorney for the Eastern District of North Carolina or the AG was ever served. Indeed, the petitioners did not even reply to the Government's assertions regarding the improper service of process on the United States.
Based on the foregoing, the court finds that it lacks jurisdiction due to the petitioners failure to comply with § 7609(b)(2)(B) and Rule 4(i)(1). See Strong v. United States, 57 F. Supp.2d 908, 916 (N.D.Cal. 1999)("Failure to properly serve either the third party or the government within the 20 day period is also a jurisdictional defect."). Having determined that the jurisdictional prerequisites of § 7609 were not satisfied, the court need not address the merits of the instant petition. Similarly, the court finds it unnecessary to determine whether petitioners lack standing because the summonses did not identify them.
This petition is hereby DISMISSED. The clerk of court is DIRECTED to close this case and remove it from the undersigned's docket.