The opinion of the court was delivered by: Will, District Judge.
In October, 1962, petitioner Paul W. Tillotson, a Special Agent
of the Internal Revenue Service, issued a summons which purported
to be authorized by § 7602 of the Internal Revenue Code of 1954,
26 U.S.C. This summons directed respondent Jackson L. Boughner to
testify with respect to the tax liability of the taxpayer whose
identity has been withheld from petitioner and on whose behalf
respondent delivered a cashier's check to the District Director
of Internal Revenue in Chicago. The check, dated July 27, 1961,
and payable to Internal Revenue Service in the amount of
$215,499.95, was drawn on the La Salle National Bank, Chicago.
Accompanying the check was a letter signed by respondent which
read as follows:
"There is enclosed a cashier's check of La Salle
National Bank dated July 27, 1961, payable to
Internal Revenue Service in the amount of
"This represents additional amounts due from a
taxpayer for some past years. The name of the
taxpayer has not been disclosed to me. However, I am
informed that the aggregate additional amount,
together with interest computed to August 1, 1961, is
the amount of the check, $215,499.95.
The summons was returnable at a time and place certain. By
agreement, respondent's appearance pursuant thereto was continued
to a later date at which time he was present but, through his
counsel, refused to answer all questions put to him on the ground
that the summons was invalid. The hearing was adjourned and was
resumed several months later when respondent again appeared and
again refused to answer questions pertaining to the subject
matter of the summons. This second hearing was terminated and the
instant petition filed some months thereafter. The Court has
jurisdiction to hear and decide the merits here involved.
26 U.S.C. § 7604.
In his answer to the petition, respondent denied that the
summons was issued pursuant to authority granted to the
Commissioner by § 7602. He further denied that the summons was
served upon him lawfully in accordance with § 7603 of the Code.
At the hearing held in September of this year, however,
respondent withdrew his objection to the manner in which the
summons was served but reiterated his contention that the summons
was issued without statutory authority. In particular, he claims
that § 7602 does not authorize the issuance of a summons to
obtain information with respect to a taxpayer whose identity is
unknown either to the Commissioner or to the party served. He
also argues that even if § 7602 authorizes the issuance of such
a summons, a Special Agent is not authorized to issue it. These
are the only issues presented to the Court.
That portion of § 7602 which is here relevant provides the
"For the purpose of ascertaining the correctness of
any return, making a return where none has been made,
determining the liability of any person for any
internal revenue tax or * * * the liability at law or
in equity of any transferee or fiduciary of any
person in respect of any internal revenue tax, or
collecting any such liability, the Secretary or his
delegate is authorized —
"(2) To summon the person liable for tax or
required to perform the act, or any officer or
employee of such person, or any person having
possession, custody, or care of books of account
containing entries relating to the business of the
person liable for tax or required to perform the act,
or any other person the Secretary or his delegate may
deem proper, to appear before the Secretary or his
delegate at a time and place named in the
summons * * * and to give such testimony, under oath,
as may be relevant or material to such
inquiry; * * *." Emphasis supplied.
Respondent's first contention, that § 7602 does not authorize
the issuance of a summons to inquire into the tax liability of a
taxpayer whose identity has been concealed, is clearly erroneous.
The statute explicitly authorizes an inquiry into the tax
liability of any person for any internal revenue tax. Nowhere is
it provided that the identity of such a taxpayer must be known to
the Commissioner before he is authorized to issue a summons.
Respondent cites several cases, including McDonough v. Lambert,
94 F.2d 838 (1st Cir. 1938); Mays v. Davis, 7 F. Supp. 596
(W.D.Pa. 1934); and In re International Corp. Co., 5 F. Supp. 608
(S.D.N.Y. 1934), in support of his first contention. All of these
cases, however, involve predecessor sections to the current §
7602 none of which contained the broad language, now found in
that section, that a summons may be issued
for the purpose of determining the tax liability of any person.*fn1
Moreover, these cases are factually distinguishable because in
none did the Commissioner have reason to believe that unpaid
taxes were owed by a taxpayer whose name he did not know, and in
none did a taxpayer admit his tax liability while concealing his
identity. The Commissioner is not here engaging in a fishing
Respondent also cites additional cases,*fn3 but they are
inapposite and do not warrant discussion.
There remains only respondent's contention that a Special Agent
must concern himself solely with criminal matters and that he
lacks authority to issue a § 7602 summons to assist in
ascertaining the identity of an unidentified taxpayer and
determining his tax liability. The Court has found no authority
to support respondent's position. The Regulations contain no such
restriction, Treas. Reg. § 301.7602-1 (1959), and none is to be
found in the Treasury Department's publication which describes
internal administration of the Service, "Statement of
Organizations and Functions", Treas.Dept.Publica. No. 383, 6 CCH
1963 Stand.Fed. Tax Rep. ¶ 5988 (see ¶ 5988-1118.6(2)).
The summons here was issued for a lawful purpose by an official
with authority to issue it. Accordingly, respondent ...