Section 7602 of the Internal Revenue Code grants the Internal Revenue Service broad authority to examine “any books, papers, records, or other data which may be relevant or material to [an] inquiry.” The IRS exercises this authority by issuing summonses in the course of administrative investigations of either a taxpayer’s civil liability or possible criminal conduct. As this column has recounted, 26 U.S.C. §7609(f) authorizes the IRS to obtain “John Doe summonses” directing a third party to provide information relating to a class of otherwise unidentified individuals. See Jeremy H. Temkin, “John Doe Summonses: Procedural Hurdles With Limited Review,” N.Y.L.J. (Nov. 14, 2019).

A recent decision by the United States Court of Appeals for the Sixth Circuit highlights differences between the low threshold that courts apply in deciding motions to quash summonses addressed to third parties, and the more rigorous standard applied in deciding whether a John Doe summons should be issued. While the court rejected the taxpayer’s attempt to invoke the higher standard applied in the John Doe summons setting, its decision reflects both the difficulties faced by counsel representing taxpayers challenging third-party summonses and the value of constantly considering new lines of attack.

Applicable Standards of Review

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]