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RIGGS v. UNITED STATES

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
  ...

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