In our newsletter of February 1997, we discussed a 1995 case in which the Ninth Circuit Court of Appeals had refused to hear an appeal of a district court order which directed a taxpayer to respond to an IRS summons for documents. As a condition for ordering the taxpayer to turn over the documents, the district court had required the IRS to notify the taxpayer five days in advance of showing any documents to any person at the IRS working outside the civil examination division. The district court was concerned that the IRS would show the documents to its criminal investigation division.
As authority for the proposition that the summons enforcement order could contain conditions, the district court relied on the opinion of the Ninth Circuit Court of Appeals in United States v. Zolin, 809 F.2d 1411 (9th Cir. 1987). However, a year after the Zolin case, the Fifth Circuit had held that an order enforcing a summons could not contain any conditions. United States v. Barrett, 837 F.2d 1341 (5th Cir. 1988). The Supreme Court tried but failed (in a 4-4 tie) to resolve this intercircuit conflict in an appeal of Zolin. 491 U.S. 554 (1989).
In the 1995 case, the Ninth Circuit had held that the issue was not ripe for appeal because the IRS said it had no current intention of showing the summoned documents to any division other than the civil examination division. United States v. Jose, 71 F.3d 1484 (9th Cir. 1995). The government appealed the ripeness issue to the Supreme Court. Without indicating how it would rule on the issue of whether conditions could be imposed in summons enforcement orders, the Supreme Court held that the Jose case was ripe for appeal. Therefore, the Supreme Court remanded the case to the Ninth Circuit to make a ruling on this question. 117 S. Ct. 463 (12/2/96).
In a surprise, the Ninth Circuit on remand has reversed its position, as stated in Zolin, that conditions can be attached to summons enforcement orders. United States v. Jose, __ F.3d __, 98-1 USTC 50,119 (9th Cir. 12/19/97). In the recent Jose opinion, the Ninth Circuit, sitting en banc, has held that Congress intended the IRS to have expansive summons powers to investigate tax liability and that this intention, absent any contrary statutory provision, prohibits district courts from attaching conditions to enforcing otherwise valid summonses. Thus, by now siding with the Fifth Circuit's Barrett opinion, the Ninth Circuit has removed any intercircuit conflict, and the matter will not go to the Supreme Court anytime soon.
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