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Meyer v. United States

United States District Court, D. Arizona

March 24, 2017

Joseph D. Meyer, Petitioner,
United States of America; Internal Revenue Service; and Nancy Phipps, Revenue Agent, Respondents.


          David G. Campbell United States District Judge

         Petitioner Joseph D. Meyer filed a motion to quash a third party summons issued by the Internal Revenue Service and Revenue Agent Nancy J. Phipps. Doc. 1. Respondents - the IRS, Phipps, and the United States of America - replied, seeking denial of Petitioner's motion, and filed their own motion to dismiss the IRS and Phipps as parties. Doc. 5. The issues are fully briefed. Docs. 1, 5, 11, 12. No party has requested oral argument. For the reasons set forth below, the Court will deny Petitioner's motion to quash and grant Respondents' motion to dismiss.[1]

         I. Background.

         Petitioner has not filed income tax returns for the years 2013, 2014, and 2015. Doc. 6, ¶ 3. Phipps, a Revenue Agent for the IRS, was assigned to determine if Petitioner had tax liability for those years. Id., ¶ 2. Phipps contacted Petitioner on August 26, 2016, and provided him with letters and publications about the IRS audit process. Id., ¶¶ 4-6. One of these publications, “Publication 1, Your Rights as a Taxpayer, ” stated: “we sometimes talk with other persons if we need information that you have been unable to provide, or to verify information we have received.” Id., ¶¶ 7, 10. Petitioner did not attend a scheduled meeting with Phipps on September 7, 2016, and by September 18, 2016, Petitioner had not rescheduled the meeting, responded to Phipps' correspondence, or provided requested documents. Id., ¶¶ 11-13.

         On September 19, 2016, Phipps issued a third-party summons to Wells Fargo Bank, N.A., seeking Petitioner's bank records from 2013, 2014, and 2015. Id., ¶¶ 14, 20. Phipps also sent Petitioner a copy of the summons and a notice informing him of his right to file a petition to quash, which he received on September 21, 2016. Id., ¶¶ 17-19. Phipps received electronic access to the responsive documents from Wells Fargo on October 6, 2016, but she has not accessed them pending resolution of Petitioner's motion. Id., ¶¶ 21-22.

         II. Analysis.

         Before the Court addresses the merits of Petitioner's motion, the Court will first decide whether the IRS and Phipps are proper respondents.

         A. Agent Phipps and the Internal Revenue Service.

         Respondents argue that Petitioner fails to state a claim against the IRS and Phipps because the United States is the only proper party to this petition. Doc. 5 at 8. Petitioner asserts various claims under 26 U.S.C. § 7602 against the IRS and Phipps in her official capacity[2] as Revenue Agent, and contends that the Court has jurisdiction pursuant to §§ 7609(b)(2)(A) and (h)(1). Doc. 1 at 1, 3-6. But Petitioner's “basis for jurisdiction, 26 U.S.C. § 7609(b), does not authorize a suit against the IRS in its own name.” Kasian v. IRS, No. CV10-1462-PHX-JAT, 2010 WL 5103099, at *1 (D. Ariz. Dec. 9, 2010). And “[a] suit against IRS employees in their official capacity is essentially a suit against the United States.” Id. (quoting Gilbert v. DaGrossa, 756 F.2d 1455, 1460 (9th Cir. 1985)). See also Luke v. Abbott, No. SA CV96-176 GLT (EEX), 1996 WL 33518028, at *8 (C. D. Cal. Dec. 4, 1996) (citing Kentucky v. Graham, 473 U.S. 159, 165-66 (1985), and dismissing government employee sued in official capacity as a “redundant party” when government entity was also sued).

         Petitioner does not state why the IRS is a proper party in light of this authority, and asserts that Phipps is properly named only because she issued the summons and allegedly failed to follow proper procedures. Doc. 11 at 4. The IRS is an improper respondent and Phipps is a redundant party. See Kasian, 2010 WL 5103099, at *1; Luke, 1996 WL 3351802, at *8. The Court will dismiss Petitioner's motion to quash as to the IRS and Phipps.

         B. The Summons is Sufficient and Was Properly Issued.

         Petitioner argues that the summons was not issued in good faith (Doc 1., ¶¶ 7-9); that it violates state and federal laws (id., ¶ 10); and that the summons is deficient. The Court disagrees.

         When the propriety of a summons is at issue, “[t]he IRS has the initial burden of proving that the summons: (1) is issued for a legitimate purpose; (2) seeks information relevant to the purpose; (3) seeks information not already within the IRS's possession; and (4) satisfies all of the administrative steps required by the Internal Revenue Code.” United States v. Dynavac, Inc., 6 F.3d 1407, 1414 (9th Cir. 1993) (citing United States v. Powell, 379 U.S. 48, 57-58 (1964)). “The government's burden is a slight one, and may be satisfied by a declaration from the investigating agent that the Powell requirements have been met. Once the prima facie case is made, a ‘heavy' burden falls upon the taxpayer to show an abuse of process, or the lack of institutional good faith.” Id. (citations omitted).

         The IRS has made a prima facie case that the summons was proper. Phipps stated that she issued the summons for Petitioner's banking records as part of her investigation into Petitioner's income and potential tax liability. Doc. 5 at 11; Doc. 6-2, ¶¶ 2, 9-10. Phipps stated that the IRS does not have these records. Doc. 5 at 12; Doc. 6-2, ¶¶ 9-10. And Phipps stated that she complied with all administrative steps required by the Internal Revenue Code in issuing the summons. Doc. ...

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