Reca v. Internal Revenue Service

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 23-CV-24600-MOORE/Elfenbein

SOFIA RECA, and

GPR 5 LLC,

Petitioners,

v.

INTERNAL REVENUE SERVICE, et al.,

Respondents.

_____________________________________/

REPORT AND RECOMMENDATION

THIS CAUSE is before the Court on Respondent, United States’ (“the Government”)

Motion to Dismiss (“the Motion”) Petitioners Sofia Reca and GPR 5 LLC’s (“Petitioners”) Petition

to Quash Summons (“Petition”) filed pursuant to Federal Rule of Civil Procedure 12(b)(1) and

12(b)(6), ECF No. [7]. The Honorable K. Michael Moore has referred this matter to me “to take

all necessary and proper action as required by law regarding all pre-trial, non-dispositive matters

and/or for a Report and Recommendation with respect to the Petition to Quash Summons.” ECF

No. [14]. Having reviewed the Motion, the record, and the relevant law, I recommend that the

Motion be GRANTED, that the Petition be DISMISSED, and that the request for an evidentiary

hearing be DENIED.

I. BACKGROUND

In a letter dated July 19, 2023, the Internal Revenue Service (“the IRS”) received a request

for information (“EOI Request”) from Argentinian authorities — made pursuant to the tax

information exchange agreement between the United States and Argentina (“the TIEA”),

indicating that Guillermo Pablo Reca (“Mr. Reca”) is under investigation by Argentinian tax

authorities for income and personal assets tax for 2019, 2020, and 2021. See ECF No. [7-2] at 1-

2. During their investigation, Argentinian authorities concluded that Mr. Reca is the beneficial

owner of GPR 5 LLC and that he failed to submit information regarding GPR 5 LLC’s financial

accounts in contravention of Argentinian law. See id. at 3. Argentinian authorities indicated that

they have exhausted all means available in their country to obtain the information they seek. See

id.

To assist Argentinian authorities, the IRS issued a Summons to Respondent Citibank N.A.

(“Citibank”) on November 8, 2023. See ECF No. [1] at 2; ECF No. [7-3] at 1-2. Pursuant to the

Summons, the IRS directed Citibank:

to personally appear . . . to give testimony under oath regarding [] [Mr.] Reca . . .

and to bring . . . copies of all of the [] documents, records, and information,

including electronically stored information, in [Citibank’s] possession, custody, or

control pertaining to all accounts that may be owned, controlled, or under the

signatory authority of [Mr. Reca] for the period from January 1, 2019 through

December 31, 2019.

ECF No. [1] at 9. The specific documents the IRS requests from Citibank are “[a]ccount opening

documents[,]” “[a]ccount signature cards[,]” “Know-Your-Customer and Customer Due Diligence

records,” “[m]onthly account statements[,]” and “[c]orrespondance . . . and memorandum files

related to the account[s]” under investigation. Id. The IRS stated the Summons also applied to

the accounts GPR 5 LLC owned. Id.

Petitioners filed the instant Petition, claiming that “the IRS may not have complied with

the standards established by United States v[]. Powell, 379 U.S. 48 (1964)” and, therefore, the

Court must quash the Summons. Id. at 3. To support their position, Petitioners argue that (1) the

Summons “is neither directed at nor limited to the supposed Argentin[ian] tax liability of” Mr.

Reca; (2) the Petitioners “are not subject to Argentin[ian] taxation[;]” (3) “the requested records

do not relate to” Mr. Reca; (4) the Summons is “overbroad because it encompasses bank records

and documents unrelated to the alleged Argentin[ian] tax liability” of Mr. Reca; and (5) the

Summons “would result in the production of irrelevant and confidential documents[.]” Id.

Remarkably, Petitioners admit that Petitioner Sofia Reca (“Ms. Reca”) “does not have standing”

to bring the instant Petition, but they argue that she should because the Summons “directly impacts

her right to privacy in her financial records.” Id.

The Government, on the other hand, contends that the Petition should be dismissed. They

argue that this Court lacks subject-matter jurisdiction to adjudicate the Petition and that the

Petitioners failed to provide facts to state a claim for relief. The Government’s jurisdictional

argument has two parts. First, it argues that the Court lacks subject-matter jurisdiction to

adjudicate the Petition as it relates to Ms. Reca because the United States’ limited waiver of

sovereign immunity — enshrined in 26 U.S.C. § 7609(b) — does not apply to her. See ECF No.

[7-1] at 2-4. Second, it argues that the Petition is untimely under 26 U.S.C. § 7609(b)(2)(A). See

id. at 4-5.

The Government’s Rule 12(b)(6) argument turns on the Petitioners’ purported failure to

disprove that the IRS issued the Summons in good faith. See generally id. at 6-11. It is the

Government’s position that the IRS issued the Summons in good faith by satisfying the four-factor

test articulated in Powell, which requires (1) “that the investigation [is being] conducted pursuant

to a legitimate purpose[;]” (2) “that the inquiry [will] be relevant to that purpose[;]” (3) “that the

information sought is not already within the [IRS’s] possession[;]” and (4) “that the administrative

steps required by the [Internal Revenue Code] have been followed[.]” 379 U.S. at 57-58. The

Government argues that the Petitioners failed to plead facts raising an inference of bad faith.

Petitioners thereafter filed a Response that tracks the arguments raised in the Petition.

More specifically, and as further explained below, Petitioners challenge the validity of the

Summons based on the second Powell factor, arguing that “the Summons is not relevant to the

alleged purpose.” ECF No. [11] at 2. The Government has since filed a Reply, ECF No. [12], and

a Notice of Supplemental Authority, ECF No. [13]. The Motion is now ripe for review.

II. DISCUSSION

As discussed in this section, I conclude that (1) the Court lacks subject-matter jurisdiction

to consider the Petition as it relates to Ms. Reca; (2) the Petition is untimely under § 7609(b)(2)(A);

and (3) even if the Petition were timely and did not suffer from a jurisdictional deficiency, the

Motion must be granted and the Petition dismissed because the Government established that it

issued the Summons in good faith and Petitioners failed to provide specific facts to raise an

inference of bad faith on the Government’s part. I explain my reasoning below.

A. The Court’s Jurisdiction to Adjudicate the Petition

“It is axiomatic that the United States may not be sued without its consent and that the

existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206,

212 (1983) (footnote call number omitted). “Waivers of the Government’s sovereign immunity,

to be effective, must be unequivocally expressed.” United States v. Nordic Vill. Inc., 503 U.S. 30,

33 (1992) (quotation and other citation omitted). Should the United States make such a waiver, it

“has the power to condition a waiver of its immunity as broadly or narrowly as it wishes, and

according to whatever terms it chooses to impose.” Zelaya v. United States, 781 F.3d 1315, 1321-

22 (11th Cir. 2015) (citing United States v. Sherwood, 312 U.S. 584, 586 (1941)). Courts must

strictly observe the “limitations and conditions upon which the Government consents to be sued”

and cannot imply exceptions not present within the terms of the waiver. Soriano v. United States,

352 U.S. 270, 276 (1957). If there is no specific waiver of sovereign immunity as to a particular

claim filed against the Government, a federal court will lack subject-matter jurisdiction over the

suit. See Zelaya, 781 F.3d at 1322.

Title 26 U.S.C. § 7609(h) provides a limited waiver of the United States’ sovereign

immunity, empowering district courts “to hear and determine any proceeding brought under

subsection (b)(2)[.]” Id. Section 7609(b)(2)(A) gives “any person who is entitled to notice of a

summons under subsection (a)” the right to bring a proceeding to quash an administrative

summons. Id. The parties entitled to notice include anyone “identified in the summons.” 26

U.S.C. § 7609(a).

In the Summons at issue, only Mr. Reca and GPR 5 LLC were designated as noticees. See

ECF No. [7-3] at 6-8. Therefore, § 7609(h)’s limited waiver of liability only applies to Mr. Reca

and GPR 5 LLC, and only they have standing to file a petition to quash the Summons. Petitioners

acknowledge as much in the Petition, stating that Ms. Reca “does not appear to have standing[.]”

ECF No. [1] at 3. Similarly, in response to the Government’s Motion, Petitioners do not cite to

any legal authority that would bestow Ms. Reca standing to quash the Summons, simply making

an ipse dixit assertion that she “should have standing over her confidential financial records.” ECF

No. [11] at 2. Saying one should have standing does not make it so. Because the limited waiver

of liability does not apply to Ms. Reca, this Court lacks jurisdiction to consider the Petition as it

relates to her; and for that reason, I find that this action should be dismissed for lack of subject-

matter jurisdiction as to Ms. Reca’s claims. See Sherwood, 312 U.S. at 590 (“The section must be

interpreted in the light of its function in giving consent of the Government to be sued, which

consent, since it is a relinquishment of a sovereign immunity, must be strictly interpreted.”

(citations omitted)).

B. 26 U.S.C. § 7609(b)(2)(A)’s Limitations Period

The limited and specific grant of federal jurisdiction made in § 7609(b) is time-limited.

Qualified individuals initiating proceedings to quash must do so no “later than the 20th day” after

receiving notice of the challenged summons. § 7609(b)(2)(A). If notice is being provided by mail,

§ 7609(b)(2)(A)’s limitations period is calculated from the date the IRS sends the notice by

certified mail, not the date the noticee receives it. See Stringer v. United States, 776 F.2d 274,

275-76 (11th Cir. 1985) (“Here the wording of the statute involved is clear and unambiguous: [§]

7609(b)(2)(A) mandates that the notice be given in the manner provided in subsection (a)(2);

subsection (a)(2) expressly provides that notice is sufficient if mailed by certified or registered

mail to the last known address of the person entitled to notice. This language negates any inference

that the requisite notice is not ‘given’ until its receipt by the addressee.” (emphasis in original)).

Should a petitioner file a petition to quash beyond the 20-day limitations period, the Court will

only consider it if the petitioner shows good cause for the delay. See Floyd v. Internal Revenue

Serv., No. 2:18-CV-01516-RDP, 2018 WL 10593640, at *2 (N.D. Ala. Nov. 27, 2018) (“Though

the court has jurisdiction to entertain [the petitioner’s] one-day-late petition to quash, the court

would ordinarily still need to decide whether equitable principles warrant tolling § 7609(b)(2)(A)’s

limitations period and excusing [the petitioner’s] late filing.” (emphasis added)).

The IRS provided Mr. Reca and GPR 5 LLC notice on November 8, 2023, when it mailed

a physical notice and a copy of the Summons via certified mail. See ECF No. [7-3] at 50-59;

Callahan v. Schultz, 783 F.2d 1543, 1545 (11th Cir. 1986) (“Notice under [§] 7609 is given on the

date it is mailed.” (citation omitted)). Petitioners filed the instant Petition on December 6, 2023

— 28 days after the IRS provided Mr. Reca and GPR 5 LLC with notice. See generally ECF No.

[1]. The Petition, therefore, is untimely.

Although the Government raised this argument in the Motion, Petitioners chose to leave

the timeliness issue unaddressed. Indeed, Petitioners’ Response challenges other arguments in the

Government’s Motion, such as the second Powell factor, but it stays silent on the timeliness issue

and does not otherwise proffer any reasons as to why the Court should equitably toll the 20-day

limitations period. See ECF No. [11]. Petitioners’ conspicuous failure to address this argument

operates as a concession on this point. See, e.g., Melendez v. Town of Bay Harbor Islands, No.

14-CV-22383, 2014 WL 6682535, at *7 (S.D. Fla. Nov. 25, 2014) (“[The plaintiff] wholly fails to

address this argument in her Response . . . , and therefore concedes the point.” (citing Glass v.

Lahood, 786 F.Supp.2d 189, 210 (D.D.C.2011)). Consequently, I find that the instant Petition is

untimely and that the Petitioners failed to establish any circumstances that warrant the equitable

tolling of § 7609(b)(2)(A)’s limitations period. The Petition, therefore, must be dismissed for

failure to comply with the timing requirements of the statute.

C. Validity of the Summons

Congress has granted the IRS “broad statutory authority to summon a taxpayer to produce

documents or give testimony relevant to determining tax liability.” United States v. Clarke, 573

U.S. 248, 249 (2014); see also United States v. Arthur Young & Co., 465 U.S. 805, 816 (1984)

(“In order to encourage effective tax investigations, Congress has endowed the IRS with expansive

information-gathering authority; § 7602 is the centerpiece of that congressional design.”). “That

authority includes issuing a summons pursuant to a treaty partner’s request.” Rabassa v. United

States, No. 23-12445, 2024 WL 1435103, at *2 (11th Cir. Apr. 3, 2024) (citing United States v.

Stuart, 489 U.S. 353, 360-63 (1989)). Nevertheless — and as already discussed, § 7609 empowers

certain taxpayers to object to administrative summons by allowing them to initiate proceedings to

quash. See generally id. Objections to administrative summons “must be derived from one of

three sources: a constitutional provision;” the Internal Revenue Code; “or the general standards

governing judicial enforcement of administrative subpoenas enunciated in United States v. Powell.

. . .” Presley v. United States, 895 F.3d 1284, 1290 (11th Cir. 2018) (alteration in original; quoting

S.E.C. v. Jerry T. O’Brien, Inc., 467 U.S. 735, 741-42 (1984)).

Importantly, the Supreme Court has emphasized that summons enforcement proceedings

— or as in this case, proceedings seeking to quash such summons — “are to be ‘summary in

nature.’” Clarke, 573 U.S. at 254 (quoting Stuart, 489 U.S. at 369). As the purpose of a summons

is only to inquire, and not to accuse, and this tool is a “crucial backstop in a tax system based on

self-reporting,” “court[s] may ask only whether the IRS issued the summons in good faith, and

must eschew any broader role of ‘oversee[ing] the [IRS’s] determinations to investigate.’” Id.

(internal citations omitted, alterations in original).

The Government can make its prima facie showing of good faith by satisfying the four-

factor test articulated in Powell. Specifically, the United States must show: “(1) that the

investigation will be conducted pursuant to a legitimate purpose, (2) that the inquiry will be

relevant to that purpose, (3) that the information sought is not already in the IRS’ possession and,

(4) that it has taken the administrative steps necessary to the issuance of a summons.” La Mura v.

United States, 765 F.2d 974, 979 (11th Cir. 1985) (citing Powell, 379 U.S. at 57-59; other citations

omitted). “The [Government] can satisfy this burden merely by presenting the sworn affidavit of

the agent who issued the summons attesting to these facts.” Id. (citing Matter of Newton, 718 F.2d

1015, 1019 (11th Cir. 1983); other citation omitted). Once the Government makes the prima facie

showing, “the burden shifts to the party contesting the summons to disprove one of the four

elements of the government’s prima facie showing or convince the court that enforcement of the

summons would constitute an abuse of the court’s process.” Id. at 979-80 (citations omitted). It

bears noting that the burden on the contesting party is heavy and requires allegations of specific

facts and the introduction of evidence. United States v. Leventhal, 961 F.2d 936, 940 (11th Cir.

1992).

Here, Petitioners premise the Petition on the argument that the IRS did not issue a “valid

[s]ummons” because it “may not have complied with the standards established by United States v.

Powell[,]” thereby challenging whether the IRS acted in good faith when issuing the Summons.

ECF No. [1] at 3. In making its prima facie showing of good faith under Powell, the Government

relies on the declarations of two IRS employees involved in the issuance of the Summons: (1)

Exchange of Information (“EOI”) Program Manager Patricia Thomas (“Thomas”) — the IRS

employee who approved Argentina’s EOI request, and (2) IRS Tax Law Specialist Valentina

Lagana (“Lagana”) — the IRS employee who issued the Summons. ECF No. [7-1] at 8-9.

Through these declarations, the Government has satisfied each of the Powell factors.

First, the Government has shown “that the investigation will be conducted pursuant to a

legitimate purpose.” La Mura, 765 F.2d at 979 (citing Powell, 379 U.S. at 57-59; other citations

omitted). In her affidavit, Thomas indicated that her “office received a request for information . .

. pursuant to the U.S.-Argentina TIEA from the Government of the Argentin[ian] Republic, acting

through the Federal Administrator of Public Revenue.” ECF No. [7-2] at 2. She continues stating

that the EOI Request “indicate[d] that [] [Mr.] Reca [] is under examination by the Argentin[ian]

tax authorities for income tax and personal assets tax for tax years 2019, 2020, and 2021[,]” id.

(footnote call number omitted), and that “Argentin[ian] tax authorities believe that [Mr. Reca]

beneficially owns GPR 5 LLC, and that [Mr. Reca] [] failed to submit information regarding the

financial accounts of an entity that he beneficially owns as required under Argentin[ian] law[,]”

id. at 3. Thus, Argentinian authorities seek “ownership and account information concerning the

Citibank [] bank accounts of GPR 5 LLC, including bank statements, opening documents, and

closing documents.” Id.

Similarly, Lagana’s affidavit acknowledged that “Argentina made a request for the

exchange of information [] to the United States pursuant to Article 5 of the U.S.- Argentina TIEA[,]

. . . seek[ing] information in connection with the examination of [] [Mr.] Reca’s income tax and

personal asset tax liabilities relating to tax periods January 1, 2019, through December 31, 2021.”

ECF No. [7-3] at 2 (footnote call number omitted). Lagana stated that “[p]ursuant to the EOI

Request, and in accordance with 26 U.S.C. § 7602, [she] issued an IRS summons on November 8,

2023, to Citibank [] via certified mail for information pertaining to the bank accounts of GPR 5

LLC to the extent that [] [Mr.] Reca owned, controlled, or had signatory authority over such

accounts between January 1, 2019, and December 31, 2019.” Id. These two affidavits are

sufficient to show “that the investigation will be conducted pursuant to a legitimate purpose,” and

therefore, the first Powell factor is satisfied. See Mazurek v. United States, 271 F.3d 226, 230 (5th

Cir. 2001) (“Assisting the investigation of a foreign tax authority has been held to be a legitimate

purpose by itself.” (footnote call number omitted)); see also La Mura, 765 F.2d at 979 (explaining

that the IRS can satisfy its prima facie showing “merely by presenting the sworn affidavit of the

agent who issued the summons attesting to these facts”).

Second, the Government has shown “that the inquiry will be relevant to that purpose” for

issuing the Summons. La Mura, 765 F.2d at 979 (citing Powell, 379 U.S. at 57-59; other citations

omitted). Thomas stated in her affidavit, “[b]ased upon available information, including

information furnished by Argentina, there is a reasonable basis to believe that the summonsed

records, if produced, may contain information which is relevant to the Argentin[ian] tax

authorities’ determination of the proper Argentin[ian] income tax liabilities of” Mr. Reca. ECF

No. [7-2] at 3. This representation is sufficient to satisfy the second Powell prong. See United

States v. Morse, 532 F.3d 1130, 1132 (11th Cir. 2008) (holding that an affidavit from an IRS agent

stating that “the summons material may be relevant to the investigation” was sufficient to satisfy

the second Powell prong).

Third, the Government has shown “that the information sought is not already in the IRS’

possession.” La Mura, 765 F.2d at 979 (citing Powell, 379 U.S. at 57-59; other citations omitted).

Thomas and Lagana, in their respective affidavits, stated that “[t]he Argentin[ian] tax authorities

have indicated that they have exhausted all means available in their country to obtain the

information requested[,] id., and that “[t]he summonsed information is not in the possession of the

IRS[,]” ECF No. [7-3] at 3. With these representations, the Government has satisfied the third

Powell prong. See Morse, 532 F.3d at 1132 (holding that an affidavit from an IRS agent stating

that “the summoned materials are not already in the possession of the IRS” was sufficient to satisfy

the third Powell prong).

Finally, the Government has shown “that it has taken the administrative steps necessary to

the issuance of a summons.” La Mura, 765 F.2d at 979 (citing Powell, 379 U.S. at 57-59; other

citations omitted). Thomas, in her affidavit, stated that the Argentinian “EOI Request states that

it is in conformity with the laws and administrative practices of the Argentin[ian] tax

administration[,]” and that “[b]ased on [her] review of the EOI Request, [she] ha[s] determined

that it is a proper request within the guidelines of the U.S.-Argentin[ian] TIEA . . . that it is

appropriate for the United States of America to honor the EOI Request and thereby lend assistance

and support Argentina, as the U.S.-Argentina TIEA contemplates.” ECF No. [7-2] at 4. And

Lagana, in her affidavit, stated that “[i]n accordance with [] § 7609(a), she sent a notice of third-

party summons to [] [Mr.] Reca and GPR 5 LLC on November 8, 2023, via certified mail[,]” and

that while “the mailing to GPR 5 LLC was returned to sender as ‘unclaimed’/’unable to forward’

. . . , it constituted sufficient notice under 26 U.S.C. § 7609(a)(2) because it was sent by certified

mail to the ‘last known address’ of GPR 5 LLC.” ECF No. [7-3] at 2-3. Lagana further stated that

“[a]ll administrative steps required by the Internal Revenue Code for the issuance of the

summonses ha[d] been taken.” Id. at 3. As a result, I find that the Government satisfied the fourth

and final Powell prong. See Morse, 532 F.3d at 1132 (holding that affidavit from IRS agent stating

that “all administrative steps required for the issuance of the summons have been followed” was

sufficient to satisfy the fourth Powell prong).

Now that “the United States [has made] its prima facie case for enforcement, ‘the burden

shifts to . . . [Petitioners] to disprove one of the four elements of the government’s prima facie

showing or convince the court that the enforcement of the summons would constitute an abuse of

the court’s process.’” Verges v. United States, No. 18-CV-60235-BB, 2018 WL 3423965, at *1

(S.D. Fla. June 27, 2018) (quoting La Mura, 765 F.2d at 979-80)). Enforcing a summons

constitutes an abuse of the court’s process if the summons was issued for an improper purpose,

such as “to harass the taxpayer or to put pressure on him to settle a collateral dispute.” Powell,

379 U.S. at 58.

In their Petition and Response, Petitioners do not argue that enforcement of the Summons

would be an abuse of the Court’s process. They instead challenge the Summons under Powell,

specifically the second factor. They do not take issue with the first, third, or fourth factors. As to

the second Powell factor, Petitioners argue that (1) the “Summons is neither directed at nor limited

to the supposed Argentin[ian] tax liability of” Mr. Reca, and (2) the “Summons is [] overbroad

because it encompasses bank records and documents unrelated to the alleged Argentin[ian] tax

liability of” Mr. Reca “and would result in the production of irrelevant and confidential

documents.” ECF No. [1] at 3; see also ECF No. [11] at 2-5. Due to the significant overlap

between these two arguments, I will address them together.

The Supreme Court has stated that an inquiry pursuant to an administrative summons will

be valid if summoned information “may be relevant” to the purpose of the investigation, Powell

379 U.S. 57. This pronouncement tracks the plain language of § 7602(a)(2), which empowers the

IRS to subpoena any records “as may be relevant or material” to the IRS’s investigation. Section

7602(a)(2)’s “may be” language “reflects Congress’ express intention to allow the IRS to obtain

items of even potential relevance to an ongoing investigation, without reference to its

admissibility.” United States v. Arthur Young & Co., 465 U.S. 805, 814 (1984). The reason

Congress accords the IRS such deference is because the IRS “can hardly be expected to know

whether [] [information] will . . . be relevant until it is procured and scrutinized.” Id. Therefore,

the IRS is not “required to establish that the [information] it seeks [is] actually relevant in any

technical, evidentiary sense.” Id.

Thomas established relevance in her affidavit by stating: “Argentin[ian] tax authorities

believe that [Mr. Reca] beneficially owns GPR 5 LLC, and that [Mr. Reca] has failed to submit

information regarding the financial accounts of” GPR 5 LLC — “an entity that he beneficially

owns [—] as required under Argentin[ian] law.” ECF No. [7-2] at 3. For Argentinian authorities

to assess whether Mr. Reca has complied with Argentinian law, Citibank must necessarily disclose

the information relating to GPR 5 LLC’s account held at this bank. The Petitioners’ vague and

unsubstantiated claims that the information produced would be immaterial do not provide the

Court with grounds to quash the Summons. See Leventhal, 961 F.2d at 940.

Furthermore, the IRS has tailored its request for information — as outlined in the Summons

— to meet the needs of the Argentinian investigation. Specifically, the IRS only seeks

“documents, records, information, . . . pertaining to all accounts that may be owned, controlled, or

under the signatory authority of [Mr. Reca] for the period from January 1, 2019 through December

31, 2019[.]” ECF No. [1] at 9. In challenging the Summons, the Petitioners do not argue how the

IRS could have better tailored the Summons; instead, they focus on the fact that Ms. Reca wholly

owns GPR 5 LLC and, therefore, could only produce irrelevant information because GPR 5 LLC’s

account statements relate to her, and she is not currently under investigation. ECF No. [11] at 4.

This argument ignores the fact that GPR 5 LLC bears the initials of Mr. Reca, creating a plausible

connection between the two. More importantly, as the Government points out, the Argentinian

authorities suspect a possible beneficial interest between Mr. Reca and GPR 5 LLC, regardless of

the entity’s legal ownership. Part of the investigative inquiry is whether Mr. Reca has any degree

of control over this entity, not whether he owns the entity, making the requested information

relevant to the Argentinian investigation. And even if the Petitioners’ assertions are true and GPR

5 LLC’s account information has no connection to Mr. Reca, the Petitioners have no cause for

concern as the Summons explicitly excludes account information unconnected to Mr. Reca. See

ECF No. [1] at 9.

Finally, Petitioners request an evidentiary hearing in this matter. To warrant an evidentiary

hearing, Petitioners must “point to specific facts or circumstances plausibly raising an inference of

bad faith.” United States v. Clarke, 816 F.3d 1310, 1318 (11th Cir. 2016) (quoting Clarke, 573

U.S. at 249). A taxpayer’s bare allegations of an improper purpose does not entitle him or her to

examine IRS officials at an evidentiary hearing. United States v. Clarke, 573 U.S. at 249. Indeed,

the taxpayer “must offer some credible evidence supporting his charge.” Id. Here, Petitioners

simply alleged that the evidence was irrelevant because of the ownership structure of GPR 5 LLC

without addressing the Argentinian’s authority’s desire for the records to determine whether Mr.

Reca has any beneficial interest in the entity, regardless of legal ownership rights. As a result,

Petitioners have failed to offer any credible evidence supporting their claim that the Government

issued the Summons in bad faith, making an evidentiary hearing unnecessary. See Rabassa, 2024

WL 1435103 at *4 (finding district court did not abuse its discretion in denying an evidentiary

hearing when the request was based on arguments that were irrelevant to the good faith

determination); Dyer Coriat v. United States, No. 23-11648, 2023 WL 8369970, at *2 (11th Cir.

Dec. 4, 2023) (affirming district court’s decision to deny evidentiary hearing when the request

raised issues regarding the foreign government’s history of corruption but did not allege facts

giving rise to an improper purpose by the IRS).

For the foregoing reasons, the Petitioners’ attack on the Summons’s validity fails and the

Petition must be dismissed.

III. CONCLUSION

For the foregoing reasons, I respectfully RECOMMEND that:

1. The Government’s Motion to Dismiss, ECF No. [7], be GRANTED and Petitioners’

Petition, ECF No. [1], be DISMISSED.

2. Petitioners’ request for an evidentiary hearing be DENIED.

Pursuant to Local Magistrate Rule 4(b), the parties have fourteen (14) days from the date of

being served with a copy of this Report and Recommendation within which to file written objections,

if any, with the Honorable K. Michael Moore, United States District Judge. Failure to timely file

objections shall bar the parties from a de novo determination by the District Judge of an issue covered

in the Report and shall bar the parties from attacking on appeal unobjected-to factual and legal

conclusions contained in this Report except upon grounds of plain error if necessary in the interest of

justice. See 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 149 (1985); Henley v. Johnson, 885

F.2d 790, 794 (11th Cir. 1989); 11th Cir. R. 3-1.

CASE NO. 23-CV-24600-MOORE/Elfenbein

RESPECTFULLY SUBMITTED in Chambers in Miami, Florida on May 22, 2024.

AL?

ty Cb—

mM only? 7

MARTY FULGUEIRA ELFENBEIN

UNITED STATES MAGISTRATE JUDGE

cc: All Counsel of Record

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