United States of America and T. B. Schopfer, Revenue Officer, Internal Revenue Service v. C. H. Harper

662 F.2d 335, 49 A.F.T.R.2d (RIA) 339, 1981 U.S. App. LEXIS 15788

• Court: Court of Appeals for the Fifth Circuit
• Decided: November 23, 1981
• Docket: 80-7688
• Status: Published

Opinions

PER CURIAM:

The taxpayer appeals from the district court’s enforcement of an Internal Revenue Service summons directing him to appear before a revenue officer to testify and to produce certain documents and records relating to his financial status.¹ The taxpayer had been assessed for certain penalties and interest relating to the years 1969 through 1971, and the summons had the legitimate purpose of aiding in determining the collectibility of the liability in question.

The taxpayer asserts that his tax liability for the years in question has been conclusively determined by a proceeding in the bankruptcy court and that the amount as so determined has been paid in full. He argues that because the matters now being investigated are barred by the bankruptcy proceeding the summons has no legitimate purpose. The government points out that the taxpayer’s liability for penalties and interest was not before the bankruptcy court. The taxpayer counters that although the penalty and interest claims were not filed in bankruptcy court, principles of res judicata bar the assessment.

This appeal does not turn on these contentions, however, but rather turns on the fact that the validity of an assessment may not be challenged in a summons enforcement proceeding. The burden of the Commissioner in such a proceeding was stated in United States v. Powell, 379 U.S. 48, 55, 57, 85 S.Ct. 248, 253, 254, 13 L.Ed.2d 112 (1964):

He must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to that 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. . . .

The district court found that each of these requirements has been met. The burden was then on the taxpayer to show that the investigation was for an improper purpose. Id. at 58, 85 S.Ct. at 255; United States v. Southeast First National Bank of Miami Springs, 655 F.2d 661, 663 (5th Cir. 1981). We recently observed that this burden “may, for all practical purposes, be insurmountable.” United States v. Price, 655 F.2d 56, 58 (5th Cir. 1981). In any event it is clear that his desire to contest the underlying assessment will not suffice to meet that burden and defeat the IRS’ prima facie showing.

Neither the district court’s order nor this opinion should be construed as passing on the merits of the taxpayer’s contention with respect to .the assessment’s validity. His rights to challenge it, including his rights to pay the tax, file claim for refund and bring suit under 26 U.S.C. § 7422² remain unimpaired by this proceeding.

Affirmed.

1 . The summons was issued pursuant to 26 U.S.C. § 7602. The district court’s authorization to enforce the summons is found at 26 U.S.C. §§ 7604(b), 7604(a).

2 . The government suggests that the passage of time now bars the taxpayer from filing suit in the tax court under 26 U.S.C. § 6213 without paying the claimed penalty and interest.