Written Communication Address:
Jon N C.
c/o 4400 North Scottsdale Road, Suite 9-121
Scottsdale, Arizona 85251
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
JON N C., ) Case No.:09-MC-0xxx
Petitioner, )
vs. ) OPPOSITION TO UNITED STATES’
UNITED STATES OF AMERICA; ) MOTION FOR PROTECTIVE ORDER
WELLS FARGO BANK, NA; )
AND JPMORGAN CHASE BANK, NA, ) (Assigned to the Honorable
Respondents ) Roslyn O Silver)
Petitioner Jon N C. (“Petitioner”) hereby files with this honorable court this Opposition to United States’ Motion and Memorandum for Protective Order filed by Respondent United States of America to quash Petitioner’s heretofore filed discovery requests, for the meritorious reasons set forth herein:
BACKGROUND
On or around December 2008, Petitioner, through and under the guidance of a licensed Certified Public Accountant, caused to be filed a federal income tax return (Form 1040) for tax year 2007.
Petitioner filed said return in good faith, having signed the jurat without reservation.
Respondent United States maintains that (1) Petitioner has engaged in abusive tax reporting, (2) Petitioner has engaged in a “fraudulent refund scheme” that is “commonly referred to by the IRS as a “Form 1099-OID” fraudulent refund scheme. [Rec. Doc. 8].
Respondent violates the “good-faith standard” by permitting the IRS to become an information gathering agency for the other departments, including the Department of Justice; bad-faith is demonstrated when the civil summons is used as a tool by which “the [IRS] merely would like to gather additional evidence for the prosecution”; in addition, the [IRS] delays the recommendation for prosecution to the prosecutors to “permit the Government to expand its criminal discovery rights.” United States v. LaSalle Nat’l Bank, 437 U.S. 248, 98 S. Ct. 2368 (1978).
Petitioner refutes each and every allegation in Respondents assumptions that alleges that Petitioner engaged in any scheme that attempted to defraud Respondent in any way. In particular, Respondent clearly moves this court in bad faith and under an institutional commitment to prosecute Petitioner, thereby violating the LaSalle criteria. [Rec. Doc. 11].
ARGUMENT
Discovery should be not be stayed because Respondent has demonstrated a commitment to prosecute Petitioner, and a stay on discovery will unjustly prejudice Petitioner.
LaSalle clearly outlines the criteria by which a summons on records is adjudged improper. [Rec. Doc. 11].
Respondent has repeatedly demonstrated bad-faith, violation of LaSalle criteria, and commitment to prosecute Petitioner. [Rec. Doc. 8].
Respondent further clarifies its improper position and commitment to prosecute when Respondent states in United States’ Motion and Memorandum For Protective Order that “[P]etitioner’s discovery requests are predicated on tax protestor rhetoric”. [Rec. Doc. 9 ¶ 8]. (emphasis added). Respondent states in error that said “information has no bearing whatsoever on the merits of the petition to quash” [Rec. Doc. 9 ¶ 8] because Petitioner’s requested documents go to the heart of Petitioners allegation that Respondent has violated LaSalle, and that Respondent has been committed to prosecute Petitioner since before the filing of the several Summons which is the basis for the instant case.
Additionally, Respondent states that Petitioner’s request for production of document is overbroad when Petitioner seeks “all “all documents, records and papers of the Department of Justice or in their files, pertaining to Petitioner or his activities and this case.” [Rec. Doc. 3].
LaSalle clearly states that the IRS has no valid purpose in gathering information for the Department of Justice (“DOJ”). LaSalle at 2368. Respondent cannot have it both ways; either DOJ has no pre-prosecution file on Petitioner, in which case discovery will be short and free of burden, or DOJ has a pre-prosecution file, DOJ is preparing to prosecute Petitioner, the IRS has violated the LaSalle criterion in bad-faith, and Petitioner has a right to said information to demonstrate that the Summons in question must be quashed.
The Court has found that “discovery should not be permitted “until [the] threshold immunity question is resolved.” Liverman v. Committee on the Judiciary, U.S. House of Representatives, 51 Fed. Appx. 825, 827-28 (10th Cir. 2002) (unpublished) (quoting Siegert v. Gilley, 500 U.S. 226, 231(1991)). Petitioner has resolved the threshold immunity question by demonstrating that Respondent has waived immunity, thereby making moot Respondent’s argument. [Rec. Doc. 11].
Although discovery in a summons related proceeding is permitted “only in extraordinary situations,” United States v. Balanced Financial Management, Inc., 769 F.2d 1440, 1445-46 (10th Cir. 1985), Petitioner can easily demonstrate that “enforcement of the summons would result in an abuse of the court’s process” and that “discovery would likely lead to useful, relevant evidence.” Robert v. United States, 364 F.3d 988, 999-1000 (8th Cir. 2004). (emphasis added). Petitioner’s request for documents meets both of the Court’s criteria. Respondent’s commitment to prosecute Petitioner coupled with the IRS’ unlawful use of summons authority creates a legal climate that places Petitioner’s time, resources and freedom in jeopardy, thereby creating an “extraordinary circumstance” that warrants critical judicial review of Respondent’s pleadings and underlying motives in the case at bar. Additionally, as noted previously, IF the DOJ is maintaining a file on Petitioner, then Petitioner’s requested documents [Rec. Doc. 3,6] are “useful [and] relevant evidence.” Robert.
Fed. R. Civ. P. 26(c) provides for a Protective Order only against discovery for good cause. By Respondent’s actions and pleadings, Respondent has demonstrated bad-faith, institutional commitment to prosecute and intent to prosecute Petitioner. Respondent has not demonstrated any “good cause” basis on which this honorable Court should grant a protective order. Further, Movant United States must confer with taxpayer in good faith in an effort to resolve the dispute without court action. Respondent has not met this burden. [Rec. Doc. 11].
Petitioner has dire and certain need for all information requested in his hereto filed discovery pleading as the requested information is essential to Petitioner’s case. Petitioner needs the information requested in order to prove his burden as required in United States v LaSalle Nat’l Bank, 437 U.S. 248, 98 S. Ct. 2368 (1978).
Petitioner, as attorney pro se, needs the requested information prior to any hearing date, and in advance of any ruling on the Motion to Dismiss, in order to adequately demonstrate to this Court that Petitioner has been targeted for selective prosecution in advance of the issuance of the Summons at bar. Petitioner especially needs to know persons involved in this case and location of documents to prove Respondent’s bad faith motives.
All the information concerning the improper purpose for using an administrative summons is controlled by the IRS and Department of Justice; Petitioner has no other, and can have no other source of information. Consequently, Respondent’s agents should be ordered to answer all requests for production of documents.
The DOJ attorney is trying to use the overwhelming resources of the United States Government to wear down Petitioner, an attorney-less private individual.
The DOJ attorney alleges that the discovery requests have not yet been served on the attorney of record for the Respondent in this case, Steven P. Johnson of the U.S. Department of Justice, Tax Division, having appeared on behalf of the United States on September 22, 2009. The United States was properly noticed by United States Mail in a postage prepaid envelope, certified, return receipt requested to United States Attorney, District of Arizona, and to the United States Attorney General via United States Mail in a postage prepaid envelope. Because Petitioner has no return receipt for said mailing to United States Attorney General, or in this case, Steven P. Johnson of the U.S. Department of Justice, Tax Division, Petitioner will send such notice forthwith concurrent with the filing of this motion to ensure compliance with all notice requirements. Said notice is filed timely and should not prejudice Petitioner in form or substance, as proof of service on the United States was noticed in the District of Arizona, and is also filed concurrently with this motion.
The Special Procedures for the Third-party Summons section of the Tax Reform Act of 1976, now 26 U.S.C. § 7609, provides that Petitioner is entitled to a hearing, Petitioner is entitled to Petitioner’s day in court prior to a court order enforcing the administrative summons of the IRS, and the manifest Congressional intent of same includes a meaningful hearing with adequate pre-hearing discovery.
CONCLUSION
For the foregoing reasons, Petitioner respectfully requests that Respondent immediately and in accordance with Petitioner’s several Request For Production of Documents, produce all requested materials. Accordingly, Petitioner respectfully requests that this Court deny Respondent’s motion for protective order and grant any other relief to which Petitioner may be entitled. A proposed order with this opposition is filed concurrently herewith.
RESPECTFULLY submitted this 13th day of October 2009,
________________________
Jon N C.
Petitioner Pro Se
CERTIFICATE OF MAILING
I hereby certify that service of the foregoing PETITIONER’S MOTION AND OPPOSITION TO UNITED STATES’ MOTION AND MEMORANDUM FOR PROTECTIVE ORDER has been made this 13th day of October by hand-delivery, or by depositing a copy thereof in the United States Mail in a postage prepaid envelope, certified, return receipt requested, addressed as indicated below.
________________________
Jon N C.
Petitioner Pro Se
ORIGINAL of the foregoing hand-delivered
this 13th day of October, 2009, to:
Clerk of the Court
401 W. Washington Street, Suite 130, SPC 1
Phoenix, AZ 85003-2118
COPY of the foregoing mailed
this 13th day of October, 2009, to:
United States Attorney
District of Arizona
Diane J. Humetewa
Two Renaissance Square
40 N. Central Avenue, Suite 1200
Phoenix, AZ 85004
COPY of the foregoing mailed
this 13th day of October, 2009, to:
Steven P. Johnson
Trial Attorney, Tax Division
U.S. Department of Justice
P.O. Box 683, Ben Franklin Station
Washington, D.C. 20044-0683
By:________________________
______________________________________________________________________________
Written Communication Address:
Jon N C.
c/o 4400 North Scottsdale Road, Suite 9-121
Scottsdale, Arizona 85251
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
JON N C., ) Case No.:09-MC-0xxx
Petitioner, )
vs. ) ORDER DENYING
UNITED STATES OF AMERICA; ) PROTECTIVE ORDER
WELLS FARGO BANK, NA; )
AND JPMORGAN CHASE BANK, NA, )
Respondents )
Petitioner Jon N C. (“Petitioner”) hereby moves this honorable court to deny the United States’ motion for protective order, dismissing the same with prejudice.
Having considered the United States motion for protective order, and for good cause showing, the Court hereby DENIES the United States motion.
Accordingly, IT IS ORDERED that all discovery, including petitioner’s first and second request for production of documents [Rec. Docs. 3 & 6] and the United States’ responses thereto, shall be produced forthwith.
THUS DONE AND SIGNED this ____, day of October 2009.
___________________________