778 F.2d 1390 (9th Cir. 1985), 84-2267, Liberty Financial Services v. United States

Docket Nº:84-2267.
Citation:778 F.2d 1390
Party Name:LIBERTY FINANCIAL SERVICES and First Capital Securities, Inc., Petitioners-Appellants, v. UNITED STATES of America, Respondent-Appellee.
Case Date:December 18, 1985
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1390

778 F.2d 1390 (9th Cir. 1985)

LIBERTY FINANCIAL SERVICES and First Capital Securities,

Inc., Petitioners-Appellants,

v.

UNITED STATES of America, Respondent-Appellee.

No. 84-2267.

United States Court of Appeals, Ninth Circuit

December 18, 1985

Submitted Sept. 12, 1985[*]

Page 1391

James E. Ritchie, Martin A. Schainbaum, Kathleen A. Miller, San Francisco, Cal., for petitioners-appellant.

Glenn L. Archer, Jr., Michael L. Paup, Charles E. Brookhart, Farley P. Katz, Washington, D.C., for respondent-appellee.

Appeal from the United States District Court for the Northern District of California.

Before BARNES, FARRIS, and CANBY, Circuit Judges.

PER CURIAM:

Liberty Financial Services ("Liberty") appeals the district court's denial of its petition to quash IRS summons and the entry of summary judgment in favor of the United States. We affirm.

The United States, through the Internal Revenue Service ("IRS"), instituted an investigation to determine whether Liberty had engaged in promoting abusive tax shelters subjecting it to liability for penalties imposed by 26 U.S.C. Sec. 6700 (1967). In conjunction with this investigation, the IRS served a third-party recordkeeping summons on Wells Fargo Bank, pursuant to the provisions of 26 U.S.C. Sec. 7609 (1976), naming Liberty in the summons. The IRS complied with 26 U.S.C. Secs. 7609(a)(1) 1 and 7609(b)(2)(A) 2 in notifying Liberty of the summons on Wells Fargo and informing Liberty of its right to institute proceedings to quash the summons within 20 days after receiving notice.

Liberty filed a timely petition to quash the summons in the United States District Court for the Northern District of California. Thereafter, the United States filed a motion for summary judgment and after numerous responses were filed, the district court granted the government's motion for summary judgment and denied Liberty's

Page 1392

petition to quash the summons. Liberty timely appeals.

Two questions are presented: 1) Did the Commissioner adequately show that the investigation satisfied the requirements of United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); and 2) Was the summons a John Doe summons requiring that the provisions of 26 U.S.C. Sec. 7609(f) 3 be met?

We review de novo to determine whether the record evidences a dispute regarding a genuine issue of material fact. We hold that it does not. When, as here, the summons is issued to certain "third-party recordkeepers" such as banks, the IRS must give notice to taxpayers named in the summons. 26 U.S.C. Sec. 7609(a)(1). A taxpayer entitled to such notice may bring a...

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