# Petition — Moenckmeier v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1010%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 444 U.S. 991 ## Text Gupreme Court, FILED SEP 28 1979 o 8 | In The MICHIRGL RODAK, JR., CLERK Supreme Court of the United States October Term, 1978 No. q Q a 5 2 x JEANENE MOENCKMEIER, Petitioner, a UNITED STATES OF AMERICA and NELSON H. PATNAUDE, Special Agent, Internal Revenue Service and MIDLANTIC NATIONAL BANK and BRIAN WAIVER, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS ‘FOR THE THIRD CIRCUIT JEANENE MOENCKMEIER Petitioner Pro Se 1545 Ninth Avenue San Diego, Cal. 92101 714/239-4887 In The Supreme Court of the United States October Term, 1978 No. JEANENE MOENCKMEIER, Petitioner, Ve: UNITED STATES OF AMERICA and NELSON H. PATNAUDE, Special Agent, Internal Revenue Service and MIDLANTIC NATIONAL BANK and BRIAN WAIVER, Respondents. | PETITION FOR WRIT OF CERTIORARI TO : THE UNITED STATES COURT OF APPEALS es FOR THE THIRD CIRCUIT JEANENE MOENCKMEIER : Petitioner Pro Se 1545 Ninth Avenue San Diego, Cal. 92101 714/239-4887 ~ Cay Re Me eel wt tre Fee ne da te ce mts BA INDEX Page Table of Authorities . .- +--+ + + «+ » iii Petition for Writ of Certiorari . .- 1 Opinions Below. -++-+-+ + +s ** 2 SustiessG@iOh.. i .¢ + bes 4e 88.8 2 Questions Presented .- +++ + + + * 3 Primary Constitutional Provisions & Statutes Involved .--+ + + = » 4 Statement of the Case .-++ ++ + * 5 Reasons for Granting the Writ ..- - 9 I. IT IS INCONSISTENT WITH THE PURPOSE OF 26 U.S.C.§7609 AND IT IS A DENIAL OF DUE PROCESS TO DENY A TAXPAYER AN EVIDENTIARY HEARING AND DISCOVERY, AFTER HE HAS PUT IN ISSUE ALLEGATIONS OF THE COMPLAINT AND RAISED PROPER AFFIRMATIVE DEFENSES ST Penke bie SEE La. 2 + 2 II. THE DECISIONS OF THE THIRD CIRCUIT ARE IN CONFLICT WITH THE DECISIONS OF THE OTHER CIRCUITS AS TO THE BURDEN WHICH MUST BE MET BY A TAXPAYER, WHO INTERVENES AT AN ENFORCEMENT PROCEEDING, BEFORE HE IS ENTITLED TO AN EVIDENTIARY HEARING AND DISCOVERY PRIOR TO THE ENFORCEMENT : OF AN IRS SUMMONS - +++ + © © * ok? III. THE DECISION OF THE THIRD CIRCUIT TO AFFIRM THE DISTRICT COURT IS INCONSISTENT WITH THE DECISION OF THE SUPREME COURT IN U.S. V.- SAL J LASALLE EXPANDS THE NEED FOR EVIDEN- : ; TIARY HEARINGS AND DISCOVERY BY ADDING TO THE POWELL TEST OF GOOD FAITH THE REQUIREMENT OF “INSTITUTIONAL GOOD FAITH." 23 i Conelwetem. «+s 6 Certificate of Service Appendix ‘ie se! 285 Judgment Order of July 17, 1979. . Sur Petition for Rehearing August 23, 1979 . Order of April 11, 1979... Order re: Stay pending Appeal, April 18, Affidavit of Nelson of Dec. 19, 1978 Affidavit of Nelson of March 15, 1979 Affidavit of Nelson of April 10, 1979 3 62 ae H. Patnaude H. Patnaude H. Patnaude Statutes Relied Upon (full text) ii A-11l A-13 A-15 TABLE OF CITATIONS Cases Page Allstate Mortgage Corp. of Florida v. Strasser, 277 Seam eee Avems BPlal & 6 ue oo « - JO City of Rushville v. Rushville Natural Gas, 28 N.E. 853 i ee . subs a 6 kb + + + + + Be Donaldson v. U.S., Soe wens Bar CROTL) « « » 6? “ww B56 Laing v. U.S., 423 U.S. 161 (1976). . 10 Pennsylvania v. U.S., Soe Gee SOR (hehe? «4. 0 «. «0. » «, AQ Santa Clara County v. Hall, 100 Cal. Rptr. 629 (1972) . ... -« 10 State of Zornes, 475 P.2d 107 CS i es he sg 4 oe, mk U.S. v. Church of Scientology of California, 520 F.2d 818 a A oy Se a ee ef | U.S. v. Garrett, 571 F.2d 1323 (Gm Cae. 2P7e) » - 6 «© « @ © U.S. v. Genser (Genser I), 582 7.40 ane (34 Cas. 1978)... « «© 43,20 U.S. v. Genser (Genser II),595 T.ae BOG. toe Gees Ate) «2.5 0 « @ « 20 U.S... ¥. KRagey, 74 U.8. 462 (1896) .. li U.S. v. LaSalle National Bank, S37 UsB. SPS CAOTE) « = « © «& Deesdea4, 26 U.S. v. McCarthy, 514 F.2d 368 [ae a. SPT + 6 6 ese 17,20 U.S. v. Powell, 379 U.S. 59 (1964) . 23,24 U.S. v. Salter, 432 F.2d 697 [xe Cats ESTOS cs 0. « « « &7,38,29;21,26 U.S. v. Turner, 480 F.2d 272 [ran Gees, Garret, © © ets « @ U.S. v. Wright Motor Co., Inc. 536 F.2d 1090 (Sth Cir. 1976) .. 17,21 « e 17,21 obs? ee iii Constitution of U.S. I li Oe ee 4,9,10,16 Statutes 26 U.S.C.§7602 ... 26 U.S.C.§7604 ... 26 U.S.C.§7609 .. “a oe ee ee Sr ge a «0 © «, © Speebbeae 9,19,11,12,13,14,15,22 Federal Rules Federal Rules of Civil Procedure 52(a). 7 Legislative History "Tax Reform Act of 1976, P.L. 94-455," H.R.REP. NO. 94-648, 94th Cong., 2d Sess., reprinted in [1976] U.S. CODE CONG. & AD. NEWS 2897. .. 11,12,14 iv IN THE SUPREME COURT OF THE UNITED STATES October Term, 1978 No. 79- JEANENE MOENCKMEIER, Petitioner, Vv. UNITED STATES OF AMERICA and NELSON H. PATNAUDE, Special Agent, Internal Revenue Service and MIDLANTIC NATIONAL BANK and BRIAN WAIVER, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS’ FOR THE THIRD CIRCUIT The petitioner JEANENE MOENCKMEIER respectfully prays that a writ of certiorari issue to review the Judgment Order of the United States Court of Appeals for the Third Circuit rendered on July 17, 1979 affirming the Order of the United States District Court for the District of New Jersey to enforce an administrative Internal Revenue Service summons and to deny petitioner an eviden- tiary hearing and discovery prior to enforcement of said summons. OPINIONS BELOW Third Circuit. There was no formal ‘Opinion rendered by the U.S. Court of Appeals for the Third Circuit. The judg- ment entered on July 17, 1979 affirming the order of the U.S. District Court for the District of New Jersey in Civil Action No. 79-158 is set forth in the appendix at A-l. Also set forth in the appendix at A-3 is the denial of the petition for rehearing entered August 23, 1979. District Court. There was no formal Opinion in the district court below. The district court orally denied petitioner's motions for an evidentiary hearing and discovery from the bench on April 9, 1979. The final judgment entered on April 11, 1979 compelling enforcement of the administrative I.R.S. Summons and denying a stay pending appeal is set forth in the appendix at A-4. No findings of fact and conclusions of law were issued by the district court. JURISDICTION The judgment of the U.S. Court of Appeals for the Third Circuit was entered on July 17, 1979. A timely petition for rehearing was denied on August 23, 1979. The judgment and denial of petition for rehearing are set forth in the appendix at A-1l and A-3 respectively. The jurisdiction of this Court is invoked under 28 U.S.C.§1254(1). PO MT eT ne nn ee ee ee QUESTIONS PRESENTED I. IS THE TAXPAYER, WHO INTERVENES, PURSUANT TO 26 U.S.C.§7609, AT AN ENFORCE- MENT PROCEEDING TO JUDICIALLY ENFORCE AN I.R.S. SUMMONS, ENTITLED, UNDER THE DUE PROCESS CLAUSE OF THE FIFTH AMENDMENT, TO A MEANINGFUL HEARING TO CHALLENGE THE VALIDITY OF THE SUMMONS? Petitioner says: Yes. II. DOES 26 U.S.C.§7609 AND THE DUE PROCESS CLAUSE OF THE FIFTH AMENDMENT, REQUIRE THAT A TAXPAYER, WHO INTERVENES PURSUANT TO 26 U.S.C.§7609 AND WHO PUTS IN ISSUE ALLEGATIONS OF THE COMPLAINT AND RAISES PROPER AFFIRMATIVE DEFENSES, BE GIVEN AN EVIDENTIARY HEARING AND DISCOVERY? Petitioner says: Yes. III. DOES LASALLE EXPAND THE NEED FOR EVIDENTIARY HEARINGS AND DISCOVERY BY ADDING TO THE POWELL TEST OF GOOD FAITH THE REQUIREMENT OF “INSTITUTIONAL GOOD FAITH?" Petitioner says: Yes. | i i s Code, Section 7609 (e) PRIMARY CONSTITUTIONAL PROVISIONS | Title 26, United State ' aes TOTOLVED Suspension of Statute of Limitations Constitution of the United States, | If any person takes any action as Amencment .V; provided in subsection (b) and such No person shall nor shall person is A cagpes grote Dat an gro ty to an jability the s n be deprived of life, liberty, or for tel cf a hot dale agent, nominee, property, without due process of or other person acting under the ss | direction or control of such aay dl | he running of any period oO Title 26, United States Code, Section 7602: ) then t g : limitations under section 6501 | (relating to the assessment and ami collection of tax) or under section si iil ep i a atta , 6531 (relating to criminal prosection) Bai’: with respect to such person shall For the purpose of ascertaining the be suspended for the period during correctness of any return, making a which a proceeding, and appeals return where none has been made, therein, with respect to the determining the liability of any enforcement of such summons is pending. person for any internal revenue tax or the liability at law or in equity of any transferee or : : . Title 26, United States Code, Section 7609 | fiduciary of any person in respect : h) (2) of any internal revenue tax, or boty collecting any such liability, the = —... a proceeding under this section, and . Secretary is authorized--...... appeals, take precedence on the ae oe SS ee eS Uae Se |! 6 e ; docket over all cases and shall be assigned for hearing and decided at the earliest practicable date. Title 26, United States Code, Section 7609 (b) (1) Notwithstanding any o*her law or rule of law, any person who is entitled to notice of a sumions under subsection (a) shall have the right to intervene | in any proceeding with respect to ‘| the enforcement of such summons | under section 7604. ee ee een STATEMENT OF THE CASE ve On June 21, 1978 the Internal Revenue Service served an administrative summons upon respondent Midlantic National Bank of West Orange, N.J. for the bank records of Jeanene Moenckmeier. Pursuant to 26 U.S.C. §7609 Jeahene Moenckmeier requested the bank not to comply with the summons. On January 12, 1979 the United States of America and Nelson H. Patnaude, Special Agent of the IRS filed an action under 26 U.S.C.§7604 to compel’ compliance with the summons. (R. 8-16) Intervenor- petitioner Jeanene Moenckmeier filed a pleading in intervention (R. 19+39) together with supporting affidavits, specifically alleging that the IRS administrative summons was issued in bad faith because (1) the IRS summons was being used to gather information for a grand jury investigation of the taxpayer-intervenor for alleged customs' violations related to the importation of amygdalin ("laetrile") in the Eastern District of New York; (2) the bank records sought by the IRS summons were already in the possession of the government; (3) the IRS has made an institutional commitment to make a referral to the Justice Department but has delayed "merely ... to gather additional evidence for prosecution;" (4) the IRS has used unlawful (or lawful) electronic surveillance prior to issuing the summons. 1/ "R" references are to the separately bound record appendix submitted in Third Circuit. 6 Intervenor-petitioner made a timely motion for an evidentiary hearing and discovery. (R. 42) At the Show Cause hearing on April 9, 1979 Jeanene Moenckmeier renewed her request for an evidentiary hearing and discovery. After a brief oral argument by Counsel with no cross-examination permitted, District Judge H. Curtis Meanor ordered that the IRS summons be enforced (R. 5; a-4) 2/, denied Jeanene Moenckmeier's motion for an evidentiary hearing and discovery and ordered the government to submit a post-hearing affidavit (R. 18; A-13) covering the allegations which intervenor-petitioner had put in issue, instead of granting an evidentiary hearing and discovery. The post-hearing affidavit was an improper substitute for an eviden- tiary hearing and discovery, where the taxpayer had put in issue allegations of the complaint and raised proper affirmative defenses. By ordering a post-hearing affidavit, the District Judge acknowledged that intervenor-petitioner had put in issue allegations of the complaint. Mr. Patnaude, the agent who had issued the summons herein, was not present at the hearing and could not be cross-examined. Judge Meanor did not make the requisite findings of fact and conclusions of law required by Rule 52(a) of the Federal Rules of Civil Procedure. Intervenor-petitioner requested a stay pending appeal from the district court. Her motion was denied. (R.5,A-5) After making a timely appeal to the U.S. Court of Appeals for the Third Circuit (R. 4), 2/"A- "references are to the appendix attached to the petition hereto. 7 se ge LOL AP Le intervenor-petitioner then made a motion to the Third Circuit for a stay pending appeal which that Court granted (A-6). The Third Circuit ordered an expedited appeal (A-6). Oral argument in the Third Circuit was held on July 12, 1979 at which time petitioner Jeanene Moenckmeier requested that Court to vacate the order of the- district court and to remand the case for an evidentiary hearing and discovery. On July 17, 1979, the U.S. Court of Appeals for the Third Circuit affirmed the judgment of the district court which ordered the enforcement of the IRS summons herein and denied Jeanene Moenckmeier's motion for an evidentiary hearing and discovery (A-4). A timely petition for rehearing was denied on August 23, 1979 (A-3). Petitioner's motion for a stay of the mandate until September 29, 1979 and then until final disposition of the petition for writ of certiorari, provided a petition for writ of certiorari is filed in the Supreme Court by September 29, 1979, was granted by the Third Circuit on August 30, 1979. REASONS FOR GRANTING THE WRIT I. IT IS INCONSISTENT WITH THE PURPOSE OF 26 U.S.C.§7609 AND IT IS A DENIAL OF DUE PROCESS TO DENY A TAXPAYER AN EVIDENTIARY HEARING AND DISCOVERY, AFTER HE HAS PUT IN ISSUE ALLEGATIONS OF THE COMPLAINT AND RAISED PROPER AFFIRMATIVE DEFENSES. The taxpayer who intervenes pursuant to 26 U.S.C.§7609 at an enforcement pro-~ ceeding is entitled to a meaningful hearing. The Third Circuit and the Internal Revenue Service in the proceedings below have expressed their concern that if the intervenor-taxpayer herein is granted an evidentiary hearing and discovery it will result in an endless number of requests for evidentiary hearings and a@iscovery by other taxpayers at enforce- ment proceedings in the future; thereby causing delays and the frustration of the fair administration of the tax laws. However, the Supreme Court in U.S. V. LaSalle National Bank, 437 U.S. (1978) expanded the need for evidentiary hearings and discovery, in spite of the same objection by the dissent in LaSalle, supra, that the holding of the majority would produce more discovery proceedings. (Please see Reason ITI for Granting the Writ, infra at p. 23). If granting the taxpayer 4 meaning- ful hearing results in delays and a frustration of the administrative processes of the Internal Revenue Service, the solution is not to deny the taxpayer his Fifth Amendment due process guarantees, but to look to Congress to change the statutes governing this area. When Congress enacted 26 0.8.C.§76092/ providing for the intervention of a taxpayer at an enforcement proceeding, Congress intended that the hearing at which the intervenor-taxpayer challenges the enforcement of the Service's third party summonses have a purpose and that such a hearing be meaningful. The . Supreme Court of the United States held in Penns lvania v. U-S-,r 236 U.S. 351,356 (191 that Congress intends to do what it does. Legislatures are presumed to know the meaning of the words they choose. ration of Florida Allstate Mortgage Co 353 eer 642 (Fla. 1973); v. Strasser, Santa Clara County V- Hall, 100 Cal.Rptr.- ; State V- zornes, 475 P.2d 107 (Wash. 1970); City of Rushville v.- Rushville Natural Gas, 59 N-E- 853, 855 Ind. 1891). In Laing v- U.S-» 423 U.S. 161,183 (1976), the Supreme Court of the United States based its limitations of the I.R.-S- jeopardy assessment and its requirement that hearing procedures by used, on the hearing procedures. Intervenor=- petitioner Jeanene Moenckemier asserts that the legislative scheme set forth in 26 U.S-C.§7609 provides the opportunity to challenge the propriety, legality and consitutionality of an I.-R.S- summons at a meaningful hearing which would include an evidentiary hearing and discovery: 3/ Please see Appendix at A-15 for text of Statutes Relied Upon. 10 This challenge should be meanin not merely a charade to let ry rk think the government is providing a hear- ing. Congress intended that this §7604- 760% hearing have as a purpose something more than the Internal Revenue Service's writ of assistance." Congress enacted 26 U.S.C.§7609, giving the taxpayer 4 statutory right to intervene at an enforcement proceeding, in order to give the taxpayer a forum to protect his civil rights and right to privacy from unreason™ able infringements by the use of IRS administra- tive summonses, Please see Legislative History to the "Tax Reform Act of 1976," House Report No. 94-658, 94th Cong., 24 Sess. p. 307, reprinted in [1976] U.S. CODE CONG. & AD. NEWS 2897, 3203 for intent of Congress regarding §7609. A hearing which does not af opportunity for a meaningful aittende of an Internal Revenue Service summons was not the purpose of Congress when it enacted Section 7609. A statute must be construed so as to avoid an absurd conclusion. U.S.-V. Kirb 486-487 (1896). Bee hake. nee Congress anticipated that the enact- ment of 26 U.S.C. §7609 would cause delays and therefore included provisions in that section to safeguard against those delays and any detrimental consequences from those delays. In §7609(e) the statute of limitations for the assessment and collection of taxes and for criminal proseces is tolled during the pendency of the proceedings and a eals under 26 U.S.C.§7609. $7209 (hj (2) also provides that proceedings under 26 U.S.C. §7609 shall take precedence over all other cases. The legislative history of the ll Tax Reform Act of 1976, P.L. 94-455 also indicates that these provisions were intended to protect against any delays caused by a taxpayer's intervention. "Tax Reform Act of 1976," P.L. 94-455, H.R.REP. NO. 94-658, Ibid. at 309-310, reprinted in [1976] U.S. CODE CONG. & AD. NEW , 3205-3206. These safeguards protect against delays, but also act as penalties to the taxpayer who decides to challenge an I.R.S. summons at the investigatory stage rather than at the trial level. It does not follow that the taxpayer should be denied a fair hearing in addition to the above penalities when he chooses to challenge an I.R.S. summons as an intervenor at the investigatory stage pursuant to 26 U.S.C. §7609, rather than at the trial level. If Congress had intended further safeguards against delays, such as limit- ing the hearing to a summary proceeding or limiting the application of the Federal Rules of Civil Procedure, it would have included those safeguards in the statute. 26 U.S.C.§7609 is very explicit as to the application and procedure to be followed. Additionally, the words used in §7609(b) (1) regarding interven- tion indicate that Congress intended that the rights provided by this statute would supersede any rule of law to the contrary: Nothwithstanding any other law or rule Of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to intervene in any proceeding with respect to the enforcement of such summons under section 7604 12 When Congress stated in the statute the words "notwithstanding any other law or rule of law" it probably was referring to Donaldson v. U.S., 400 U.S. 517 (1971) which Limited a taxpayer's right to inter- vene in an enforcement proceeding and which limited the application of the Federal Rules of Civil Procedure in that enforcement -proceeding, making the hearing summary in nature and limiting discovery. When the Supreme Court of the United States in Donaldson supra endorsed summary proceedings, it did not anticipate 26 U.S.C.§7609 wherein the taxpayer was given a statutory right to intervene. It would naturally follow that the Donaldson rule no longer applies to enforcement proceedings wherein the taxpayer inter- venes. It also would follow that since the taxpayer now has a right to intervene in an enforcement proceeding, he also has a right to a meaningful hearing. In Donaldson, supra, the Supreme Court could justify endorsing summary proceedings for the enforcement of an I.R.S. summons because the taxpayer had an opportunity to fully challenge a Summons at trial, as the Third Circuit reasoned in U.S. v. Genser (Genser I), 582 F.2d 292 (3d cir. 1978) at 303: Thus, the Donaldson Court, in its effort to facilitate the investi- gatory mandate of the IRS merely postponed until trial the time at which a taxpayer can demand adju- dication of the propriety of a third party summons. ~18/Several courts have perceived that the Donaldson Court's recog- nition that the taxpayer can 13 raise his claim of abuse of process at trial was a signi- ficant factor in its decision to limit his opportunity to raise those claims during the investigatory stage (citations omitted). The rationale in Donaldson for limit- ing the challenge at the investigatory stage no longer is applicable to an enforcement proceeding wherein the tax- payer intervenes by right pursuant to 26 U.S.C.§7609. If the taxpayer challenges the summons at the investigatory stage and the summons is nevertheless enforced; his opportunity to challenge the summons at trial no longer exists. To deny the tax- payer the right to challenge the validity of an IRS administrative summons at trial without first giving the taxpayer an Opportunity to fully challenge the summons at an enforcement proceeding with the same due process guarantees he would have at trial would be a denial of due process. The legislative history to the Tax Reform Act of 1976, P.L. 94-455 (enacting 26 U.S.C.§7609) in H.R.Rep. No. 94-658 at 308, Ibid. 3204, states that: - « »« where the noticee does not request the third-party witness not to comply at this stage, he would still be permitted to assert such defenses as may be available to him with respect to any evidence obtained pursuant to the summons in any later court action in which the noticee was directly involved (i.e., affec- ting his tax liability or any crim- inal charges which might be brought) 14 the same extent as may be permit- ted under present law. If Congress found it necessary to point out that the taxpayer would still be permitted to challenge the legality of an IRS summons at a subsequent trial, if he did not exercise his statutory right under §7609 at the investigatory stage, then conversely it would logically follow that Congress intended that the taxpayer would not be permitted to make that challenge at the trial-level if he made it at the investigatory stage pursuant to §7609. The Internal Revenue Service also contends that the taxpayer's intervention at an enforcement proceeding to challenge an IRS summons precludes the later challenge of the same summons in a motion tO suppress at a subsequent trial, wherein the fruits of the summons are introduced into evidence. If the above contention of the IRS is true, then the initial hearing must be a fair hearing with all of the due process guarantees which are essential to safeguard accuracy and completeness of evidence: opportunity to be heard, cross-examination of wit- nesses and discovery. Only then can the taxpayer's intervention at the investigatory stage be an adequate substi- tute for a motion to suppress at the trial level. Congress could not have intended to give the taxpayer a statutory right to intervene in 26 U.S.C.§7609 whereby, if the taxpayer exercised that right, he would forever be precluded from receiving a fair hearing with all the guarantees of due process at any hearing, including the 15 One which he would have received had he chosen to raise his challenge of the IRS summons for the first time at trial. Where the taxpayer, pursuant to statutory right, challenges the purpose of the IRS in issuing the summons, the taxpayer is entitled to a meaningful hearing to make that challenge under the due process clause of the Fifth Amendment to the U.S. Constitution. Internvenor-Petitioner has not received a fair hearing in the district court. Petitioner was denied an eviden- tiary hearing, denied discovery and denied the opportunity to confront her Opponents. Mr. Nelson H. Patnaude, the Special Agent who initiated the enforcement proceeding and submitted affidavits in support thereof, was not even present at the hearing. In fact, when District Court Judge Meanor expressed a desire to ask questions of Mr. Patnaude regarding the investiga- tion, he was unable to do so because of Mr. Patnaude's absence. Intervenor- petitioner put in issue allegations of the complaint and raised proper affirmative defenses and therefore should have been granted an evidentiary hearing and discovery. Instead, Judge Meanor ordered a post hearing affidavit, concerning the issues raised, to be submitted as a substitute for an eviden- tiary hearing and discovery. (A-13, infra) Petitioner admits that the taxpayer has a heavy burden to meet to prove that the IRS summons was not issued in good faith; however, there is a different burden to be met by the taxpayer for the taxpayer to be entitled to an evidentiary 16 ina. To be entitled to an eviden- niacy Lantana the taxpayer must put in issue allegations of the complaint and raise proper affirmative defenses which petitioner has done. U.S. V- McCarthy, 514 F.2d 368 (3d Cir. 1975). II. THE DECISIONS OF THE THIRD CIRCUIT ARE IN CONFLICT WITH THE DECISIONS OF THE OTHER CIRCUITS AS TO THE BURDEN WHICH MUST BE MET BY THE TAXPAYER BEFORE A TAXPAYER, WHO en an AN ORCEMENT PROCEEDING, : ENTITLED TO AN EVIDENTIARY HEAR- ING AND DISCOVERY PRIOR TO THE ENFORCEMENT OF AN IRS SUMMONS. The First, Fifth, Seventh and Ninth Circuits have established similar pro- cedures for proceedings to judicially enforce IRS administrative summonses where the taxpayer challenges the purpose and good faith of the IRS in issuing the IRS. administrative summons. The Fifth, Seventh and Ninth Circuits have followed the procedure and rationale set forth by the First Circuit in U.S. .¥> Salter, 432 F.2d 697 (1970). Please see the following cases for the specific . procedures of the Courts of Appeal for the Fifth, Seventh and Ninth Circuits. U.S. v. Garrett, 571 F.2d 1323 (Sth Cir. 1978); U.S. v. Wright Motor Co., Inc., 536 er 1050 (5th Cir. 1976); U.S. Vv. Turner, 48 F.2d 272 (7th Cir. 1973); U.S. _v- Church of Scientolo of California, 520 F.2d 818 (9th Cir. 1975). 17 The First Circuit in U.S. v. Salter, supra held that the taxpayer would not be permitted discovery unless he could produce "some evidence supporting respon- dent's allegations." Ibid at 700. Although conclusory allegations of improper purpose were held to be insuffi- cient to permit discovery by the taxpayer, they were held to be sufficient to permit a Limited evidentiary hearing to cross~ examine the IRS agent who issued the Summons. The cross-examination would be limited to the purpose of the summons and investigation. In order to allow the taxpayer some opportunity to substantiate his allega- tions of improper purpose and bad faith, the court in U.S. v. Salter, supra found it necessary to permit the taxpayer, who raises improper purpose in his answer, at the minimum, a limited evidentiary hearing to cross-examine the IRS agent, who issued the summons, on the purpose of the summons and investigation. In establishing the procedure in ‘Salter, supra, the court approved the suggestion offered by the government. The general solution to the taxpayer's need for discovery in summons enforce- ment cases would be for the district court to proceed directly to a hearing at which, if desired, the summonee could examine the agent who issued the summons, concerning his purpose. The court could then, by observation and, where necessary, its own questioning of the agent, make its own determination of whether 18 exploration, as by discovery, seemed to be in order. Ibid. at 700. The Court in Salter then went on to give the test for permitting discovery: If at the end of the hearing there remains a substantial question in the court's mind regarding the validity of the government's purpose, it may then grant discovery. Salter found a double purpose in requiring at least a limited evidentiary hearing where the taxpayer asserts improper purpose or bad faith: 1) to permit the taxpayer at least some opportunity to prove his allegations; and 2) to “eliminate discovery in cases which it is clear that the respondent will not be able to prove his allega- tions." Ibid. at 701. In summary, the tests for permitting -an evidentiary hearing and discovery in the circuits which follow U.S. V.- Salter, supra (First, Fifth, Seventh and Ninth) are as follows: 1) the test for permitting an eviden- tiary hearing is whether the taxpayer or summonee has alleged improper purpose or bad faith in his answer to the com- plaint for enforcement of the summons. 2) the test for permitting discovery is whether, after a limited evidentiary hearing, permitting cross-examination of the IRS agent issuing the summons, "there remains 4 substantial question 19 in the court's mind regarding the valid- ity of the government's purpose ...." Ibid at 700. Although the Third Circuit, at first glance, appears to follow the same procedure for enforcement proceedings as above, the burden on the taxpayer in the Third Circuit is much heavier. U.S. v. McCarthy, supra at 372-373 sets forth the procedure in the Third Circuit for enforcement proceedings. Although the court in U.S. v. McCarthy, supra at 373 states that an evidentiary hearing is an “integral part of the proceedings" the test for per- mitting an evidentiary hearing is whether the taxpayer “puts in issue allegations of the complaint" and/or "raises proper affirmative defenses." Ibid. The burden which must be met by the taxpayer in the Third Circuit for an evidentiary hearing is similar to the heavier burden in the other circuits which must be met before discovery is permitted. This heavier burden has the effect of precluding the taxpayer from even a limited opportunity of substantia- ting his allegations of improper purpose at an evidentiary hearing. Elaborate procedures for permitting discovery after an evidentiary hearing which has raised issues which cannot be resolved by the record, are set forth in U.S. v. Genser (Genser I), 582 F.2d 292 (3d Cir. 1978) and U.S. v. Genser (Genser II), 595 F.2d 146 (3d Cir. 1979). 20 Petitioner-intervenor Jeanene Moenckmeier submits that she has met the heavier burden in the Third Circuit for an evidentiary hearing by putting in issue allegations of the complaint and raising affirmative defenses. The district judge acknowledged, in effect, that petitioner put in issue allegations of the complaint by ordering a post-hearing affidavit on the issue of whether the IRS was using its investigation as a subter- fuge for a criminal grand jury investiga- tion of petitioner in the Eastern District of New York. Judge Meanor could not resolve the issue on the record before him and cross-examination of witnesses was not permitted, nor was it even possible to cross-examine the IRS agent who issued the summons because he was not even present at the enforcement proceeding. Petitioner submits, in the alternative, that even if the court finds that she did not meet the burden for an evidentiary hearing in the Third Circuit, she has met the burden in the other circuits, which requires only allegations of improper purpose or bad faith in her answer. There- fore, the case should be remanded to the district court for an evidentiary hearing and if that evidentiary hearing raises evidence of improper purpose or bad faith on the part of the IRS, she should be permitted discovery. Failure to permit the taxpayer, who asserts improper purpose or bad faith in his answer, at least a limited evidentiary hearing with the opportunity to cross- examine the IRS agent issuing the summons has necessitated a reversal in circuits other than the Third Circuit: U.S. v Salter, supra (lst Cir.); U.S. v Church 21 | lti—isCiCiCONwtNO of Scientology, Supra (9th Cir.) and U.S. Vv. Wright Motor Co. Inc., supra (Sth Cir.). In U.S. v. Garrett, supra at 1327, the Fifth Circuit stated that if the district court had not permitted at least cross-examination of the IRS agents, it would have necessi reversal. =e e Failure of the district ¢ instant case to permit even a stakead = evidentiary hearing to cross-examine Mr. Patnaude, the IRS agent issuing the Summons in the instant case,should also hecessitate a reversal in this case. __ in the interest of maintaining uniformity of decisions in the Gv. &. Courts of Appeals, the Supreme Court Should exercise its Supervisory power to determine the Proper test which the taxpayer-intervenor must meet to entitle him to an evidentiary hearing and discovery, when he intervenes at an enforcement Proceeding pursuant to 26 U.S.C.§7609. Petitioner submits that this Court should adopt the test of the First, Fifth Seventh i Circuits. , : ees 22 III. THE DECISION OF THE THIRD CIRCUIT TO AFFIRM THE DISTRICT COURT IS INCONSISTENT WITH THE DECISION OF THE SUPREME COURT IN U.S. V. LASALLE. LASALLE EXPANDS THE NEED FOR EVIDENTIARY HEARINGS AND DISCOVERY BY ADDING TO THE POWELL TEST OF GOOD FAITH THE REQUIREMENT OF "INSTITUTIONAL GOOD FAITH." To deny the taxpayer in the instant case an evidentiary hearing and discovery, when the taxpayer put in issue allegations of the complaint and raised proper affirm- ative defenses, is inconsistent with the decision of this Court in U.S. v. LaSalle National Bank, supra which necessitates more discovery on the part of the taxpayer, not less. In LaSaile, supra the Supreme Court added a new good faith requirement of "institutional good faith" to the Powell test of good faith 4/ which must be met by the IRS -in order to establish a prima facia case for enforcement. In LaSalle, Supra the Supreme Court held that it is the "institutional posture" of the IRS 4/ U.S. v. Powell, 379 U.S. 59 (1964) at 255 outlines the so-called Powell test: "He [the Commissioner] must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, that the information sought is not already within the Commissioner's possession, and that the administrative steps required by the Code have been followed--" 23 which is dispositive of the good faith of the IRS, rather than the subjective intent of the individual IRS special agent. LaSalle, supra at 315-316. The addition of this new good faith requirement to the Powell test of good faith requires that the IRS must now plead "institutional good faith" in order to make a prima facia case. LaSalle, supra at 317, described the following situations as ones in which "institutional good faith" of the Internal Revenue Service would be lacking: 1. "... delay in submitting a recommendation to the Justice Depart- ment when there is an institutional commitment to make the referral and the Service merely would like to gather additional evidence for the prosecution. Such a delay would be tantamount to the use of the summons authority after the recommendation and would permit the Government to expand its criminal discovery rights." 2. "Similarly, the good-faith standard will not permit the IRS to become an information gathering agency for other departments, includ- ing the Department of Justice, . regardl¢ss of the status of criminal cases. ~" (footnote omitted) In addition to other allegations and defenses, in intervenor-petitioner's pleading, intervenor-petitioner in the case herein alleged "institutional bad faith" in her Pleading in Intervention 24 TAU athe te Se A a AS esa a lt Sie LE) ery ko onl caren tnsser ating tele ten. ste (R.21 418), supported by affidavits. (Pleading, R. 19-26; Also Transcript at R. 81,82,83,87,101). The Internal Revenue Service did not plead "institutional good faith" in their complaint, nor did the affidavits Submitted by Special Agent Nelson H. Patnaude adequately deny the "institutional bad faith" alleged by intervenor-appellant: 1. " No recommendation for prose- cution of the taxpayer for the years and tax returns under investigation has been made to the United States Department of Justice." (R. 12,46; Also A-9 , infra) 2. “I have not made a recommendation for criminal prosecution in this case. (R.17,9%3; A- ll, infra) 3. " The subject summons was not issued at the request of anyone from the Office of the United States Attorney." (R.17,44; A-ll, infra) 4. “I have not delayed any recommen- dation at the request of my superiors solely to further a criminal prose- cution". (R.17,%5; A-12,infra) 5. "The subject summons was not . issued at the request of any employee of the Department of Justice (to include any employee of any United States Attorney), nor was it issued at the request of any employee of the United States Customs Service." (R.18,%3; A-13 ,infra). 25 The subjective intent of Special Agent Nelson H. Patnaude does not control on the issue of “institutional good faith." It is the subjective intent of the Internal Revenue Service as an institution (Regional Counsel, Assistant Regional Commissioner for Intelligence and Criminal Tax Division of the Office of General Counsel) which is dispositive of the "institutional good faith". LaSalle, supra at 315-316. The above statements of Nelson H. Patnaude in his affidavits are not dispositive of the "institutional good faith" of the IRS and therefore the IRS has not established a prima facia case for the enforcement of the summons herein. An evidentiary hearing with discovery should be ordered in this case to determine the subjective intent of the IRS as an institution. The dissent in LaSalle, supra at 320 expressed a concern that the holding in LaSalle which added "institutional good faith" to the Powell test of good faith would "produce but endless discovery proceedings...." Although the majority knew that their decision in LaSalle would require an expanded need for discovery, this did not deter the majority from adding "institutional good faith" to the Powell test. The Third Circuit has misinterpreted the meaning of U.S. v. LaSalle, supra in denying petitioner an evidentiary hearing and discovery. 26 CONCLUSION For the foregoing reasons a writ of certiorari should issue to review the Judgment Order of the United States Court of Appeals for the Third Circuit, entered July 17, 1979. Respectfully submitted, Jeanene Moenckmeier Petitioner Pro Se 1545 Ninth Avenue San Diego, Calif.92101 714/239-4887 CERTIFICATE OF SERVICE I hereby certify that on this 27th day of September 1979 four copies of the Petition for Writ of Certiorari herein were mailed by me, postage prepaid to the Solicitor General, Department of Justice, Washington, D.C. 20530. Vnetnchrrete’ eanene Moenckmeier 27 (COPY) UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT NO. 79-1472 UNITED STATES OF AMERICA and NELSON H. PATNAUDE, Special Agent, Internal Revenue Service. Ve MIDLANTIC NATIONAL BANK and BRIAN WAIVER Jeanene and Ernst O. Moenckmeier, Intervenors Jeanene Moenckmeier, Appellant On Appeal from the United States District Court for the District of New Jersey. C.A. No. 79-0158 Argued July 12, 1979 Before: ADAMS, ROSENN and HIGGINBOTHAM, Circuit Judges. JUDGMENT ORDER After consideration of all contentions raised by appellant, it is ADJUDGED AND ORDERED that the judgment of the district court be and is hereby affirmed. Each side to bear its own costs. BY THE COURT, /3/ Arlin M. Adams Circuit Judge ATTEST: /s/ Thomas F. Quinn Thomas F. Quinn, Clerk DATED: July 17,1979. (COPY) UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 79-1472 UNITED STATES OF AMERICA, et al. ¥. MIDLANTIC NATIONAL BANK, et al. Jeanene Moenckmeier, Appellant (C.A. NO. 79-0158) SUR PETITION FOR REHEARING Present: SEITZ, Chief Judge, ALDISERT, ADAMS, GIBBONS, ROSENN, HUNTER, WEIS, GARTH, and HIGGINBOTHAM,Circuit Judges. . The petition for rehearing filed y In the above entitled case having been submitted to the judges who participated in the decision of this court and to all the other available circuit judges of the circuit in regular a ¢ive service, and no judge who concurred in the decision having asked for rehearing, and a majority of the circuit judges of the circuit in regular active service not having voted for rehearing by the court in banc, the petition for rehearing is denied. By the Court, Dated: /s/ Arlin M. Adams August 23, 1979 ~ SLECHLe Juage A-3 ELC :ke (COPY) 78 4998 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA : HON. H.CURTIS and NELSON H. PATNAUDE, MEANOR Special Agent, : Internal Revenue Service, Civil Action 3 No. 79-158 Petitioners, Vv. : ORDER MIDLANTIC NATIONAL BANK, Respondent. ORIGINAL FILED : APR 11 1979 Angelo W.Lacascio, Clerk This matter having been opened to the Court ty Robert J. Del Tufo, United States Attorney for the District of New Jersey and this Court having read and considered the pleadings filed herein and having heard oral argument; and good cause therefor having been shown, IT IS on this 1l day of April, 1979, ORDERED (1) That the respondent appear in person before Nelson H. Patnaude, Special Agent, at 10:00 A.M. on the 20th day of April, 1979 at 970 Broad Street, Room 1404, Newark, New Jersey; (2) That at the time of the appear- ance as directed above, respondent testify A-4 and produce all documents, papers, records and information as more fully set forth in the IRS summons which is attached to the Petition; and (3) That a copy of this Order may be deemed good and sufficient service; and (4) That intervenor Jeanene Moenckmeier's request for a stay pending appeal is denied. /s/ H. Curtis Meanor H. CURTIS MEANOR, JUDGE UNITED STATES DISTRICT COURT (COPY) UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 79-1472 April 16,1979 UNITED ST7.UES OF AMERICA and NELSON H. PATNAUDE,Special Agent, Internal Revenue Service _ Vs. MIDLANTIC NATIONAL BANK and BRIAN WAIVER Jeanene Moenckmeier and Ernst O. Moenckmeier, Intervenors Jeanene Moenckmeier, intervenor, Appellant (D.C. Civil No. 79-158} Present: ADAMS,GIBBONS and WEISS,Circuit Judges. 1. Appellant's motion for a stay of the execution of the Internal Revenue Service summons of June 21, 1978, ordered by Honorable H. Curtis Meanor, Judge for the District of New Jersey, to be enforced on April 20, 1979, pending appeal, and Exhibits to appellant's motion, in the above-entitled case, Respectfully ZsZ T.E._Quinn. _ _ enc. Clerk. £m The foregoing Motion is/are granted and the parties are directed to abide by the following briefing schedule: 1. Appellant to hand-file and hand-serve its brief and the appendix not later than May 2, 1979. A-6 2. Appellee to hand-file and hand-serve its brief not later than May 16, 1979, 3. Reply brief, if any, for appellant is to be hand-filed and hand-served not later than May 23, 1979. This case is to be listed for disposition on the merits during the week of July 9, 1979. By the Court, /s/ Arlin M. Adams Judge . Dated: April 18, 1979. 2 sil (COPY) EXHIBIT A UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY. UNITED STATES OF AMERICA and ) NELSON H. PATNAUDE,Special Agent ) of the Internal Revenue Service, ) Petitioners, —_— )Action Vv. )No. MIDLANTIC NATIONAL BANK, — ~— i Respondent. AFFIDAVIT STATE OF NEW JERSEY ) COUNTY OF ESSEX ) NELSON H. PATNAUDE, petitioner herein, being first duly sworn, deposes and says: 1. I ama duly commissioned Special Agent of the Internal Revenue Service and I perform my duties under the District Director of Internal Revenue, Newark,New Jersey. 2. In my capacity as a Special Agent, I am conducting an investigation for the purpose of ascertaining the correct- ness of the tax returns of Jeanene Moenckmeier for the taxable years 1975-1976. _. .3- Pursuant to that investigation and in accordance with 26 U.S.C. §§7602 and 7603, on June 21, 1978, I served an Internal Revenue Service Summons, a copy of which is attached hereto as Exhibit A, upon the respondent, by FROST LES POT Rs eS aoe te kL personally handing an attested copy thereof to Mr. Brian Waiver, Senior Accountant. 4. The said summons directed the appearance of the respondent before an official of the Internal Revenue Service to give testimony and to produce books, papers, records, or other data, as set forth in such summons. 5. The summoned items and testimony are believed to be relevant to the investigation, and the information sought is not already in the possession of the petitioners. 6. No recommendation for prosecution of the taxpayer for the years and tax returns under investigation has been made to the United States Department of Justice. 7. A notice of the summons, together with a copy of the summons, was sent by certified mail on June 21, 1978, tor Jeanene Moenckmeier 1545 Ninth Avenue | San Diego, California 92101 8. Ralph Fucetola III, Esq., who represents the taxpayer, gave notice to the respondent not to comply with the summons by letter dated June 27,1978. A copy of this letter, which is attached hereto as Exhibit C, was sent to me. 9. Respondent has not to this date complied with the summons. 10. I make this Affidavit in support of a petition for judicial enforcement of the summons. A-9 /s/ Nelson H. Patnaude Nelson H. Patnaude Sworn to before me this 19th day of December , 1978. /s/ Diane M. Peter Diane M. Peter Notary Public My Commission Expires November 21, 1982. (Exhibits omitted) A-10 (COPY) ELC :rpb 79 1298 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA,: and NELSON H. PATNAUDE, Honorable H. Special Agent, Internal : Curtis Meanor Revenue Service, | : Civil Action Petitioners, No. 79-158 Ve : SUPPLEMENTAL MIDLANTIC NATIONAL BANK AFFIDAVIT and BRIAN WAIVER, Respondents. STATE OF NEW JERSEY :___ COUNTY OF ESSEX ; SS: NELSON H. PATNAUDE, being duly sworn according to law deposes and says: 1. I ama Special Agent employed by the Internal Revenue Service, Criminal Investigation Division, Newark, New Jersey, and have been so employed since 1961. 2. I have submitted an Affidavit in this case and I incorporate the contents thereof by reference. 3. I have not made a recommendation for criminal prosecution in this case. 4. The subject summons was not issued at the request of anyone from the Office of the United States Attorney. A-11l 5. I have not delayed any recommen- dation at the request of my superiors solely to further a criminal prosecution. 6. Since my involvement with the Criminal Investigation Division's investi- gation relating to Jeanene Moenckmeier, I have had no knowledged of any wire taps having been used in these investigations. /s/ Nelson H. Patnaude ° U Special Agent Sworn and subscribed to . before me this 15th day of March, 1979 /3/ anaes amer ta J. Lowe-Pagliaroli ANGELAMARIA J. LOWE-PAGLIAROLI A Notary Public of New Jersey My Commission Expires June 29, 1980 A-12 (COPY) UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA,: Judge Meanor and NELSON H. PATNAUDE, Special Agent, Internal : Civil Action Revenue Service, No. 79-158 Petitioners, : SUPPLEMENTAL Vv. AFFIDAVIT MIDLANTIC NATIONAL BANK and BRIAN WAIVER, ORIGINAL Respondents. : FILED APR 11 1979 STATE OF NEW JERSEY: __ Angelo W. COUNTY OF ESSEX , 58: Lacascio ,Clerk NELSON H. PATNAUDE, being duly sworn according to law deposes and says: 1. I ama Special Agent employed by the Internal Revenue Service, Criminal Investigation Division, Newark, New Jersey and have been so employed since 1961. 2. I have submitted two prior affidavits in this case and I encorporate the contents thereof by reference. 3. The subject summons was not issued at the request of any employee of the Department of Justice (to include any employee of any United States Attorney), nor was it issued at the request of any employee of the United States Customs Service. [cont'd on next page] A-13 EE, (Affidavit continued) /s/ Nelson H. Patnaude NELSON H. PATNAUDE Sworn and subscribed to before me this 10th day of April, 1979. /s/ Angelamaria J. Lowe-Pagliaroli Angelamaria J..Lowe-Pagliaroli A Notary Public of New Jersey My Commission expires June 29, 1980. A-14 STATUTES RELIED UPON (full text) Title 26, United States Code, Section 7604 Enforcement of summons (a) Jurisdiction of district court.--If any person 1s summoned under the internal revenue laws to appear, to testify, or to produce books, papers, records, or other data, the United States district court for the dis- trict in which such person resides or is found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, records, or other data. (b) Enforcement.--Whenever any person summoned under section 6420(e) (2), 6421(£) (2), 6424 (da) (2) ,6427(£) (2) or 7602 neglects or refuses to obey such summons, or to produce books, papers, records, or other data, or to give testimony, as required, the Secretary may apply to the judge of the district court or to a United States commissioner for the district within which the person so summoned resides or is.found for an attachment against him as for a contempt. It shall be the duty of the judge or commissioner to hear the application, and, if satisfactory proof is made, to issue an attachment, directed to some proper officer, for the arrest of such person, and upon his being brought before him to proceed to a hearing of the case; and upon such hearing the judge or the United States commissioner shall have power to make such order as’ he shall deem proper, not inconsistent with A-15 the law for the punishment of contempts, to enforce obedience to the requirements of the summons and to punish such person for his default or disobedience. (c) Cross references.-- (1) Authority to issue orders, processes, and judgments.-- (2) Penalties.--For penalties applicable to violation of section 6420(e) (2) ,6421(f) (2), 6424(d) (2), 6427(£) (2), or 7602, see section 7210. Title 26, United States Code, Section 7609 Special procedures for third-party summonses (a) Notice-- (1) In general.--If-- (A) any summons described in subsection (c) is served on any person who is a third-party recordkeeper, and (B) the summons requires the production of any portion of records made or kept of the business transactions or affairs of any person (other than the person summoned) who is identified in the descrip- tion of the records contained in the summons, then notice of the summons shall be given to any person so identified within 3 days of the day on which such service is made, but no later than the 14th day before the day fixed in the summons as the day upon which such records are to be examined. Such notice shall be accom- panied by a copy of the summons wich has been served and shall contain directions for staying compliance with the summons under subsection (b) (2). (2) Sufficiency of notice.-- Such notice shall be SaFFislent if, on or before such third day, such notice is served in the manner provided in section 7603. (relating to service of summons) upon the person entitled to notice, or is A-16 mailed by certified or registered mail to the last known address of such person, or, in the absence of a last known address, is left with the person summoned. If such notice is mailed, it shall be sufficient if mailed to the last known address of the person entitled to notice or, in the case of notice to the Secretary under section 6903 of the existence of a fiduciary relationship, to the last known address of the fidu- Ciary of such person, even if such person or fiduciary is then deceased, under a legal disability, or no longer in existence. (3) Third-party recordkeeper defined.-- For purposes of this subsection, the term "third-party recordkeeper" means-- (A) any mutual savings bank, coopera- tive bank, domestic building and loan association, or other savings institu- tion chartered and supervised as a Savings and loan or similar associa- tion under Federal or State law, any bank (as defined in section 581), or any credit union (within the meaning of section 501(c) (14) (A)); (B) any consumer reporting agency (as defined under section 603(d) of the Fair Credit Reporting Act (15 U.S.C. 168la(f£))); (C) any person extending credit through the use of credit cards or similar devices; (D) any broker (as defined in section 3(a) (4) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a) (4))); (E) any attorney; and (F) any accountant. (4) Exceptions.--Paragraph (1) shall not apply to any summons-- A-17 (A) served on the person with respect to whose liability the summons is issued, or any officer or employee of such person, (B) to determine whether or not records of the business transactions or affairs of an identified person have been made or kept, or (C) described in subsection (f). (5) Nature of summons. Any summons to which this subsection applies (and any summons in'aid of collection described in subsection (c) (2) (B)) shall identify the taxpayer to whom the summons relates or the other information as will enable the person summoned to locate the records required under the summons. ‘ (b) Right to intervene; right to stay compliance.-- (1) Intervention.--Notwithstanding any other law or rule of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to intervene in any proceeding with respect to the enforcement of such summons under section 7604. (2) Right to stay compliance.-- Nothwithstan g any other law or rule of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to stay compliance with the summons if, not later than the 14th day after the day such notice is given in the manner provided in sub- section (a) (2)-- (A) notice in writing is given to the person summoned not to comply with — the summons, and A-18 (B) a copy of such notice not to comply with the summons is mailed by registered or certified mail to such person and to such office as the Secretary may direct in the notice referred to in subsection (a) (1). (c) Summons to which section applies.-- (1) In general.-- Except as provided in paragraph (2), a summons is described in this subsection if it is issued under paragraph (2) of section 7602 or under section 6420(e) (2), 6421(£) (2), 6424 (d) (2), or 6427(e) (2) and requires the production of records. (2) Exceptions.-- A summons shall not be treated as described in this sub- section if-- (A) it is solely to determine the identity of any person having a numbered account (or similar arrange- ment) with a bank or other institu- tion described in subsection (a) (3) (A), or (B) it is in aid of the collection of © (i) the liability of any person against whom an assessment has been made or judgment rendered, or (ii) the liability at law or in equity of any transferee or fiduciary of any person referred to in clause (i). (3) Records; certain related testimony.-- For purposes of this section-- (A) the term "records" includes books, papers, or other data, and (B) a summons requiring the giving of testimony relating to records shall A-19 be treated as a summons requiring the production of such records. (ad) Restriction of examination of records. --No examination of any records required to be produced under a summons as to which notice is required under subsection (a) may be made-- (1) before the expiration of the 14-day ‘period allowed for the notice not to comply under subsection (b) (2), or (2) when the requirements of subsection (b) (2) have been met, except in accor- dance with an order issued by a court of _ competent jurisdiction authorizing examination of such records or with the consent of the person staying compliance. (e) Suspension of statute of limitations.-- if any person takes any action as provided in subsection (b) and such person is the person with respect to whose liability the summons is issued (or is the agent, nominee, or other person acting under the direction or control of such person), then the running of any period of limitations under section 6501 (relating to the assess- ment and collection of tax) or under section 6531 (relating to criminal prosecutions) with respect to such person shall be sus- pended for the period during which a proceeding, and appeals therein, with re- spect to the enforcment of such summons is pending. (f) Additional requirement in the case of a John Doe summons.--Any summons described in subsection (c) which does not identify the person with respect to whose liability the summons is issued may be served only after a court proceeding in which the Secretary establishes that-- A-20 (1) the summons relates to the investi- gation of a particular person or ascertainable group or class of persons, (2) there is a reasonable basis for be- lieving that such person or group or class of persons may fail or may have failed to comply with any provision of any internal revenue law, ana (3) the information sought to be obtained from the examination of the records (and the identity of the person or persons with respect to whose liability the summons is issued) is not readily available from other sources. (g) Special exception for certain summonses. --In the case of any summons described in subsection (c), the provisions of subsection (a) (1) and (b) shall not apply if, upon petition by the Secretary, the court de- termines, on the basis of the facts and circumstances alleged, that there is reasonable cause to believe the giving of notice may lead to attempts to conceal, destroy, or alter records relevant to the examination, to prevent the communication of information from other persons through intimidation, bribery, or collusion, or to flee to avoid prosecution, testifying, or production of records. (h) Jurisdiction of district court.-- (L1) The United States district court for the-district within which the person to be summoned resides or is found shall have jurisdiction to hear and determine proceedings brought under subsections (£) or (g). The determinations required to be made under subsections (f) and (g) shall be made ex parte and shall be made solely upon the petition A-21 and supporting affidavits. An order denying the petition shall be deemed a final order which may be appealed. 2} Except as to cases the court considers of greater importance, a proceeding brought for the enforcement of any summons, or a proceeding under this section, and appeals, take prece- dence on the docket over all cases and shall be assigned for hearing and decided at the earliest practicable date. Added Pub.L. 94-455, Title XII, §1205(a), Oct. 4, 1976, 90 Stat. 1699. * A-22 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1010%3A1. Public record. Not legal advice.