Kerr v. U.S.
| Decision Date | 03 October 1986 |
| Docket Number | No. 85-4123,85-4123 |
| Citation | 801 F.2d 1162 |
| Parties | -5986, 86-2 USTC P 9730 Thomas M. KERR, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Thomas M. Kerr, Marion, Ind., for petitioner-appellant.
Roger M. Olsen, Acting Asst. Atty. Gen., Michael L. Paup, Charles E. Brookhart, Matthew J. Anderton, Dept. of Justice, Washington, D.C., for respondent-appellee.
Appeal from the United States District Court for the District of Montana.
Before SNEED, KENNEDY, and BEEZER, Circuit Judges.
Appellant Kerr appeals from the district court's order denying Kerr's motion to quash two summonses issued by the Internal Revenue Service (IRS) to two Montana banks and granting summary enforcement of the summonses. The summonses, issued in the course of an investigation of Kerr's individual tax liability (and that of his wife), direct the banks to produce various documents concerning accounts in the Kerrs' names, or over which they have signatory authority, or upon which they are named as trustee and/or beneficiary.
In United States v. Trader's State Bank, 695 F.2d 1132 (9th Cir.1983), we considered the validity of summonses prepared in the course of the same investigation that gives rise to the summonses at issue here. In that case we vacated the summonses as overbroad because they called for the disclosure of all banking transactions of the Life Science Church of Billings, Montana, of which the Kerrs are founders and trustees, and were not limited to transactions related to the Kerrs. See 695 F.2d at 1133.
Kerr contends on appeal that the summonses are overbroad because their enforcement will still result in the disclosure of all church banking records; that enforcement of the summonses will violate his first amendment freedoms of religion and association, or those of the Life Science Church; that the summonses were issued in bad faith; that the enabling statute for the summonses, the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), is unconstitutional; that the statute of limitations has expired on the investigation; and that the IRS has no jurisdiction to investigate him.
We examine the district court's order to determine whether it was clearly erroneous, see Ponsford v. United States, 771 F.2d 1305, 1308 (9th Cir.1985), and find that it was not.
We note initially that with the summonses issued in the instant case, the government has successfully addressed the concerns that motivated this court to vacate the summonses in the Trader's State Bank case. By narrowing the summonses to encompass accounts that the Kerrs controlled, and thus to exclude documents and records that "solely concern the Church," the government has established the requisite relation between the documents sought and the "legitimate governmental end of assessing the Kerrs' tax liability." Trader's State Bank, 695 F.2d at 1133; see United States v. Grayson County State Bank, 656 F.2d 1070, 1074 & n. 5 (5th Cir.1981), cert. denied 455 U.S. 920, 102 S.Ct. 1276, 71 L.Ed.2d 460 (1982).
The government, through the affidavit of its agent, William Beaman, has made a prima facie showing that the investigation is being conducted for a proper purpose, that the material sought is relevant to that purpose and not already possessed by the IRS, and that the administrative steps required by the IRS have been followed. See United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254, 255, 13 L.Ed.2d 112 (1964); Liberty Financial Services v. United States, 778 F.2d 1390, 1392 (9th Cir.1985). Thus the burden is on Kerr to show an abuse of process. See Powell, 379 U.S. at 58, 85 S.Ct. at 255; Liberty Financial Services, 778 F.2d at 1392. We find that Kerr has not met this burden.
Because the IRS is investigating his individual tax liability, and not that of the church, Kerr's claim that the summons is overbroad because it does not comply with the restrictions of 26 U.S.C. Sec. 7611 (formerly section 7605) is inapposite. Those provisions apply only when the government is investigating the tax liability of a church. See 26 U.S.C. Sec. 7611(h)(2).
Kerr's first amendment claims fail because he has made no showing that the summonses will burden the exercise of religious beliefs by himself or anyone else, see, e.g., Grayson County State Bank, 656 F.2d at 1074, and because he has not shown that enforcement of the summonses will, by requiring disclosure of the names of church members, infringe his right of freedom of association, or that of his church or its members. Even if Kerr has standing to raise such claims, his...
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