The opinion of the court was delivered by: Parsons, District Judge.
MEMORANDUM OPINION AND ORDER
This case is one of the first filed in this district demanding an
interpretation of the new Tax Equity and Fiscal Responsibility Act of
1982 (TEFRA) which took effect on January 1st of 1983. The facts are
sufficient in the pleadings and uncontroverted representations of the
parties to permit me to rule dispositively on the matter.
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) affected
many areas of Title 26 — the Internal Revenue Code, from tax
deductions to casualty losses. The only provision of the new law which
concerns us in this Schlick case is § 7609 which changes the
procedure by which the taxpayer can prevent a "third-party recordkeeper"
from complying with an administrative summons.
Under the old law, if a summons were issued to a third-party
recordkeeper, notice had to be given to the taxpayer by the government
and the taxpayer could prevent the third-party from complying by writing
a stay letter to the third party. The government then had to go to the
District Court to enforce the summons and the noticee (taxpayer) could
intervene and object to the summons. Under TEFRA, the summons must be
complied with unless the taxpayer begins a proceeding to quash the
In the Schlick case here, the government issued two summonses to Mr.
Rawles, Secretary and Registered Agent for two of Mr. Schlick's
corporations. Mr. Rawles is also an attorney. The government also issued
one summons to Mr. Frank, the Schlicks' accountant. The government's
first argument is that taxpayer Schlick has no right to enter a motion to
quash the summons because Mr. Rawles is not a third-party recordkeeper.
Section 7609 waives sovereign immunity and grants a right to sue the
United States in the limited case of a petition to quash summons. Only
persons entitled to notice under § 7609 may sue, and a person is not
entitled to notice unless a summons is issued to a "third-party
Under the statute, * a third-party recordkeeper is:
(A) any mutual savings bank, cooperative bank, savings
and loan, etc.
(B) any consumer reporting agency;
(C) any person extending credit through credit cards;