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RIGGS v. UNITED STATES

United States District Court, Northern District of Illinois, E.D


December 19, 1983

CHARLES RIGGS AND ROSEMARY RIGGS, PETITIONERS,
v.
UNITED STATES OF AMERICA AND RAYMOND J. TABOR, RESPONDENTS.

The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

Charles and Rosemary Riggs (collectively "Riggs") bring this pro se action to quash three Internal Revenue Service ("IRS") summonses issued August 18 and 19, 1983*fn1 to third parties allegedly in possession of Riggs' records. In response the United States has moved for dismissal under Fed.R.Civ.P. ("Rule") 12(b)(1), contending Riggs' untimely filing deprives this Court of subject matter jurisdiction. For the reasons stated in this memorandum opinion and order, the motion is granted.

Facts

In the course of an IRS investigation of Riggs' 1976-82 income tax liabilities and returns, agent Raymond J. Tabor ("Tabor") served IRS "third-party recordkeeper" summonses on TRW Credit Data, Inc. and Trans Union Credit Information Co. (both on August 18) and Harry B. Madsen (on August 19). Copies of all three summonses were sent to Riggs by certified mail August 19 and received by Riggs August 23.

On September 8 Riggs appeared at this District Court Clerk's Office to file his petition. As with all civil actions, he was required to affix a civil cover sheet (the JS-44A form approved by the Judicial Conference of the United States), which he was given by a deputy clerk. Riggs asked for but was not given help in filling out the cover sheet. Instead of filing his action that day, he came back to file it next day, September 9 — a critical one-day difference, as we shall see.

Third-Party Recordkeeper Summonses

Under 26 U.S.C. § 7602(a)*fn2 the IRS can call on any person in possession of a taxpayer's records to produce those records in aid of a tax investigation. When a summons for that purpose is issued to a "third-party recordkeeper" (defined in Section 7609(a)(3)), the taxpayer must be given notice (1) within 3 days after the summons is served on the third party and (2) at least 23 days before the day specified in the summons for examination of the records (Section 7609(a)(1)). Section 7609(a)(2) specifies the manner of giving notice to the taxpayer:

  Such notice shall be sufficient if, on or before
  such third day, such notice is served in the
  manner provided in section 7603 (relating to
  service of summons)*fn3 upon the person entitled
  to notice, or is 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 fiduciary of such person, even if
  such person or fiduciary is then deceased, under
  a legal disability, or no longer in existence.

In turn Section 7609(b)(2)(A) authorizes the taxpayer to sue to quash the summons:

  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
  begin a proceeding to quash such summons not
  later than the 20th day after the day such notice
  is given in the manner provided in subsection
  [7609](a)(2). In any such proceeding, the
  Secretary may seek to compel compliance with the
  summons.

This new procedure*fn4 was intended to shift the procedural burden to the taxpayer in third-party summons situations (under former law the taxpayer had the right to prevent the recordkeeper's compliance with a summons by a simple letter, thus forcing the IRS to institute summons enforcement proceedings against the resisting recordkeeper*fn5). Congress' stated purpose for the procedural shift was to eliminate delay in summons compliance, without adversely affecting the taxpayer's rights. S.Rep. No. 494, 97th Cong., 2d Sess. 282, reprinted in 1982 U.S.Code Cong. & Ad.News 781, 1028. No change in the substantive law of summons enforcement was intended. Godwin v. United States, 564 F. Supp. 1209, 1211-12 (D.Del. 1983); Moutevelis v. United States, 561 F. Supp. 1211, 1214 (M.D.Pa. 1983).

Motion To Dismiss

Two questions are posed by the United States' motion to dismiss:

    1. Does the Section 7609(b)(2)(A) 20-day period
  start to run when the notice is mailed or when
  the taxpayer receives it?

    2. In any event, can the period be extended for
  equitable reasons?

Both questions must be answered adversely to Riggs' position here.

As for the first issue, it is too early in TEFRA's life for the matter to have received Court of Appeals scrutiny. But the United States cites a number of District Court decisions that have started the time clock running when the notice is mailed,*fn6 and this Court has seen only one case applying (and without analysis at that) the later date on which the notice is received.*fn7 What controls, of course, is that the plain language of the statute compels the former result:

    1. Section 7609(b)(2) requires the taxpayer to
  begin the proceedings to quash "not later than
  the 20th day after such notice is given in the
  manner provided in subsection [7609](a)(2)."

    2. In turn Section 7609(a)(2) specifies the
  notice "shall be sufficient" if:

    (a) "mailed by certified or registered mail to
  the last known address of such person [entitled
  to notice]" or

    (b) where a fiduciary relationship is known to
  the IRS, "mailed . . . to the last known address
  of the fiduciary of such person [entitled to
  notice], even if such person or fiduciary is then
  deceased, under a legal disability, or no longer
  in existence."

Were actual delivery of the notice required, the statutory provisions as to "sufficien[cy]" and "last known address" would be both unnecessary and meaningless.*fn8

This ruling is all of a piece with the strict construction given to other statutes that waive the sovereign immunity of the United States. Such a literal (or strict, if you will) reading extends to the statutory time limitations for commencing actions against the United States — even if the taxpayer does not in fact receive the notice whose mailing triggers the onset of the limitation period. In the tax area see, e.g., Church of the Creator, Inc. v. Commissioner, 707 F.2d 491 (11th Cir. 1983) (per curiam); Wilson v. Commissioner, 564 F.2d 1317 (9th Cir. 1977) (per curiam), cert. denied sub nom. Mercer v. Commissioner, 439 U.S. 832, 99 S.Ct. 110, 58 L.Ed.2d 127 (1978); in other areas of the law see, e.g., Carr v. Veterans Administration, 522 F.2d 1355, 1357 (5th Cir. 1975); Kollios v. United States, 512 F.2d 1316 (1st Cir. 1975); Whipp v. Weinberger, 505 F.2d 800, 801 (6th Cir. 1974).

It makes no difference that Congress has sometimes chosen different language to specify the date of mailing a notice as the operative date.*fn9 There is no magic in the manner of expressing that concept, so long as the meaning is clearly there — as it surely is in Section 7609.

Because September 9 (Riggs' actual date of filing) is outside the 20-day limit, this Court must go on to the second question: Whether under the circumstances September 8 (the 20th day) may be deemed the date this proceeding was "begun." Again Riggs' position cannot survive analysis.

Fed.R.Civ.P. 3 says:

  A civil action is commenced by filing a complaint
  with the court.

In the notice itself Riggs were given detailed directions as to the time and procedure for filing (see Ex. A), including in part the statement:

  You must comply with the Federal Rules of Civil
  Procedure and local rules of the United States
  District Court.

Nothing in this District Court's standard requirement of a civil cover sheet is extraordinarily burdensome or difficult,*fn10 and Riggs cannot place the responsibility for its preparation on the personnel in the Clerk's Office. Indeed Charles Riggs did not first appear in the Clerk's Office until the 16th day after the notices were actually received by Rosemary Riggs, and he cannot fault anyone else for his having chosen to come in at the last minute and his then finding one of the filing requirements had not been anticipated by him.

In short, Section 7609(b)(2) establishes a jurisdictional requirement, for it imposes a limit on suing the sovereign. And even if it were otherwise — even were equitable tolling applicable — Riggs have shown no grounds for equitable relief.*fn11 This action is dismissed for want of subject matter jurisdiction.


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