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UNITED STATES v. KEMPER MONEY MARKET FUND
December 13, 1983
UNITED STATES OF AMERICA AND DAVID P. SWIRE, SPECIAL AGENT, INTERNAL REVENUE SERVICE, PETITIONERS,
KEMPER MONEY MARKET FUND, INC., RESPONDENT, V. CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY, RESPONDENT, V. FIRST NATIONAL BANK OF HIGHLAND PARK, RESPONDENT, V. NORTHERN TRUST BANK, RESPONDENT.
The opinion of the court was delivered by: Nordberg, District Judge.
MEMORANDUM OPINION AND ORDER
On October 4, 1983, a hearing was held on the petition of the
Internal Revenue Service ("IRS") to enforce a number of IRS
summons issued against various financial institutions at which
intervenor-taxpayers Robert L. Wenz and Merrick Consultants,
Ltd. have accounts. These taxpayers have intervened in the
summons enforcement proceeding pursuant to
26 U.S.C. § 7609(b)(1).
(1) the investigation will be conducted pursuant to a
(2) the inquiry may be relevant to that purpose
(3) the information sought is not already within the
Commissioner's possession, and
(4) the administrative steps required by the Code have been
followed — in particular, that the Secretary or his delegate,
after investigation, has determined the further investigation
to be necessary and has notified the taxpayer in writing to
658 F.2d at 536. The government ordinarily proves these four
elements by submitting affidavits of the agents involved in the
If the government meets its burden of establishing a prima
facie case, the district court should order the respondent to
show cause why the summons should not be enforced. At this
stage of the proceeding, the burden of production and proof has
shifted to the taxpayer, and this burden is a "heavy one". 658
F.2d at 538. The taxpayer must establish that enforcement would
constitute an abuse of the court's process. He must prove bad
faith on the part of the government by showing that the
government has abandoned in an institutional sense its pursuit
of possible civil penalties. 658 F.2d at 538 (citations
omitted). The taxpayer must do more than just produce evidence
which would call into question the government's prima facie
case. The taxpayer must allege specific facts from which the
court might infer a possibility of wrongful conduct by the
government. Mere allegations of bad faith are not sufficient.
To meet this burden, the taxpayer is entitled to a limited
amount of preliminary discovery. The taxpayer may discover:
(1) the identities of the investigating agents,
(2) the date the investigation began
(3) the dates the agent or agents filed reports recommending
(4) the date the district chief of the Intelligence Division or
Criminal Investigation Division ...
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