IN THE UNITED STATES DISTRICT
FOR THE DISTRICT OF SOUTH CAROLINA
Jane Doe Henderson
CA NO. 91-805-20K
The United States
The Palmetto Bank,
Federal Savings and
Southern National Bank of
Carolina, Interstate Johnson
Corporation, and NCNB
Bank of South
This matter is before the
court on a petition to quash certain Internal Revenue summonses.
The internal Revenue Service ( IRS )
issued five (5) summonses between March 15, 1991 and June 7,
1991, in the course of an investigation of James M. Henderson
and Mary Henderson (collectively the "Henderson's ). The
IRS was attempting to determine the correct federal income tax
liability of the Henderson's for the years of 1985, 1986, 1987,
1988 and1989, and to inquire into any offense connected with the
administration or enforcement of the internal revenue laws. The
summonses were directed to and served upon various financial
institutions.' The Henderson were given proper notice of each of
The Henderson's filed a petition' to
quash the summonses. In this petition, the Henderson's assert
that the summonses were not properly attested that they were
true copies of the original when they were served. The United
States has filed a motion to dismiss the petition to quash and a
petition to enforce the summonses.
The court must first determine whether
it has jurisdiction to decide the petition to quash or the
petition to enforce the summonses. The IRS contends that this
court lacks jurisdiction to decide the petition to quash as it
relates to the summonses directed to Interstate Johnson Lane
Corp. and C&S Bank. In general, the United States,
and therefore the IRS, is immune to Suit except where the
Congress has expressly waived immunity by statute. See United
States v. Sherwood, 312 U.S. 584 (1941). In the Internal
Revenue Code, Congress has waived sovereign immunity in certain
instances. "The United States district court shall have
jurisdiction to hear and determine any proceeding [properly
brought to quash an IRS summons] . . . ." 26 U.S.C.
§7609(h)(l). A person has the right to begin a proceeding
It is not disputed that the IRS has
the authority to issue summonses for these purposes.
See 26 U.S.C. §7602(a) & (b).
The summonses were to (1) Palmetto Bank, served March 15, 1991;
(2) Heritage Federal S & L, served March 15, 1991; (3)
C&S Bank, served March 21, 1991; (4) Interstate Johnson Lane
Corp., served May 17, 1991; and (5) NCNB Bank, served
June 7, 1991.
The petition to quash was originally filed on March 22, 1991
seeking to quash the summonses directed to Heritage Federal S
& L and Palmetto Bank. An amended petition was filed
on April 18, 1991 seeking in addition to quash the summons to C
& S Bank. A second amended petition was filed on
June 7, 1991 seeking in addition to quash the summons to
Interstate Johnson Lane. A third amended petition was
filed on June 25, 1991 seeking additionally to quash the summons
to NCNB Bank.
quash a summons not later than the 20th day after the day he is
given notice of the summons in the manner required by the law.
26 U.S.C. §7609(b)(2). Therefore, if a proceeding to quash is
not begun within the twenty day period, the district court is
without jurisdiction to quash the summons. In this case, the
Henderson's were given notice sufficient under the law of the
summons to c&s Bank on March 22, 1991. A proceeding must
have been begun by April 11, 1991. The Henderson's did not amend
the petition to quash to include this summons until April 18,
1991. The Henderson's were given notice sufficient under the law
of the summons to Interstate Johnson Lane Corp. on May 17, 1991.
A proceeding must have been begun by June 6, 1991. The
Henderson's did not amend the petition to quash to include this
summons until June 7, 1991. Therefore, the Henderson's did not
meet the jurisdictional deadline to begin proceedings to quash
these two summonses, and this court lacks jurisdiction to decide
the petition to quash as it relates to the summonses to
Interstates Johnson Lane Corp. and C&S Bank.'
The summonses were issued by agent
Suzanne Bell. Agent Bell, in her affidavit, stated that the
books, records, papers, and other data sought are either not in
the possession of the IRS or are not readily accessible without
undue administrative burden and expense. She further stated that
the information sought is necessary and relevant to the
investigation and that no referral to the Department of Justice
for criminal proceedings has been made. Bell also stated that
all administrative procedures had been followed.
This court does, however, have jurisdiction to
decide the petition to enforce as it relates to all of the
summonses. 26 U.S.C. §7604(a). Jurisdiction to determine
questions of enforcement is granted independently from
jurisdiction to determine a petition to quash. S~ 26 U.S.C.
§7604(a) and 7609(h)(l)
enforce the summonses, the United States need only show that the
summonses were issued for a legitimate purpose, that the data
sought may be relevant to that legitimate purpose, that the data
is not already in the government's possession, and that the
administrative steps required by the Internal Revenue Code were
followed. United Stales v. Powell, 379 U.S. 48 (1964); United
States v. LaSalle National Bank, 437 U.S. 298, 313-14
(1978); Alphin vs. United States 809 F 2d 236 (4th Cir.
1987). The IRS may establish its prima facie case by an
affidavit of the investigating agent averring the four elements
from Powell. Alphin v. United States, 809 F.2d 236 (4th
Cir. 1987); In re Newton, 718 F.2d 1015, 1019 (11th Cir.
1983); United States v. Davis, 636 F.2d 1028 (5th Cir.
1981). The affidavit of agent Bell establishes a prima facie case
for enforcement. Since a prima facie case is established,
the burden shifts to the Henderson's to show that the summonses
should not be enforced.
The Henderson's assert that all of the
administrative steps required by the Internal Revenue Code were
not followed. The I-Henderson's contend that the IRS did not
serve "attested' copies of the original summonses. A
summons issued by the IRS "shall be served by the
Secretary, by an attested copy delivered in hand to the person
to whom it is directed, or left at his last and usual place of
abode . . . 7 26 U.S.C. §7603. Mimick v. United States,
91-1 USTC p. 50,070 (D.Neb. 1991)' appears to be the only
reported case that has interpreted what is an "attested
copy for purposes of 26 U.S.C. §7603. As the district court in
Nebraska did, this court looks to Black's Law Dictionary
to define the term "attested
5 This case is not reported in the Federal
Supplement. It also may be located at 1991 WL 34445 and
1991 U.S. Dist. Lexis 1329.
"[A]n attested' copy of a document is one which has been
examined and compared with the original, with a certification or
memorandum of its correctness, signed by the person who examined
it. Black's Law Dictionary 117 (5th ed. 1979). Therefore, an
attested copy must have a written and signed certification that
it is a correct copy.
The copies of the summonses that are
part of the record in this case have no written and signed
certification that they are true copies of the original on them
or attached to them. The IRS does not contest the fact that the
summonses that were served did not have such a written and
signed certification The IRS contends that the statute does not
require such a certification. This court disagrees. This court
finds that to be an attested copy, the summons must have a
written and signed certification or memorandum that the copy is
a true and correct copy of the original. Therefore, the IRS
failed to follow the administrative steps required by the
Internal Revenue Cede.
The Henderson's have shown that the IRS
failed to establish an element required under Powell for
the enforcement of a summons. The district court can deny
enforcement of a summons if it finds that the IRS has fallen
short of establishing the four elements from Powell. United
States v. Michaud, 907 F.2d 750, 752 (7th Cir. l990)(en
banc); Cf. Hintze v. Internal Revenue Service,
879 F.2d 121 (4th Cir. 1989); United States v. White, 853
F.2d 107 (2d Cir. 1988); United States v. John G. Mutschler
& Assoc.. Inc., 734 F.2d 363, 367 (8th Cir. 1984).
IRS contends that any failure to comply with the administrative
procedures was a minor flaw which should not preclude
enforcement of the summonses.' This court does not agree.
Congress specifically provided that a summons issued by the IRS "shall
be served by the Secretary, by an attested copy . . .
." 26 U.S.C. ~7603 (emphasis added). The word shall in a
statute is generally used to show that a certain action is
mandatory.' Therefore, the service of an attested copy in
mandated by the Internal Revenue Code.
It seems clear that a valid purpose for
this mandate is to assure the person receiving the summons that
what he received was in fact a true copy of the original
summons. The failure to serve an "attested copy deprives
the person receiving the summons of this assurance which
Congress expressly granted. This court finds that under the
facts of this case, the failure to follow the requirement of the
Internal Revenue Code to serve an attested copy precludes the
enforcement of the summonses.
This court finds that it lacks subject
matter jurisdiction to decide the petition to quash as it
relates to the summonses to Interstate Johnson Lane Corp. and
C&S Bank. The petition must be dismissed in such parts as
relate to these two summonses. This court further finds
The IRS cites three cases for the
proposition that a minor flaw will not preclude enforcement: United
States v. Bank of Moulton, 614 F.2d 1063 (5th Cir.
1980)(IRS's obtaining information prematurely did not preclude
enforcement because the violation was minor, and there was no
harm caused by the conduct); United States v. Texas Heart
Institute, 755 F.2d 469 (5th Cir. 1985)(Even though
notice requirement was not met, summons was enforceable because
the taxpayer had actual notice and received every benefit of the
administrative procedure), overruled on other .grounds by United
States v. Barrett, 837 F.2d 1341 (5th Cir. 1988); and United
States v. Gilbert C. Swanson Foundation. Inc., 772 F.2d
440 (8th Cir. 1985)(Failure to
adhere to IRS internal operating order did not preclude
enforcement of a summons).
Black's Law Dictionary 1233 (5th ed. 1979); and 39 Words and
Phrases, "Shall-In Statutes 122-30 (1953).
That the remaining three summons should be quashed becasue
the IRS failed to serve an attested copy of the summonses. For
this same reason, the court finds that the IRS is not entitled
to enforcement of any summones.
Based on the forgoing, it is
ORDERED that the motion of
the IRS to dismiss the petition is granted in part and denied in
part. It is further
ORDERED that the petition to
quash the summonses is dismissed in part and granted in part. It
ORDERED that the petition for
enforcement is denied.
IT IS SO ORDERED.
Henry M. Herlong, Jr.
United States District Judge
Greenville, South Carolina
November 27, 1991
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