UNITED STATES DISTRICT COURT FOR THE
PENNSYLVANIA EASTERN DISTRICT

KATHY J. PATRIOT                          )
              Plaintiff                   ) CA#___________________________
       v.                                 ) 
DEPARTMENT OF THE TREASURY and            ) 
PNCBANK                                   ) PETITION TO QUASH SUMMONS
              Respondents                 )
__________________________________________) or in the alternative, INJUNCTION

  1. This is an action under the Special Procedures for Third Party Summons Act, 26 USC §7609, to halt the above-named third-party record keeper from revealing Plaintiff’s private records to the Internal Revenue Service, and to quash the summons.

  2. This court has jurisdiction over this action pursuant to 26 USC 7609(h), 28 USC §1331, §1340, §1346, and the First, Fourth, Fifth, Ninth and Tenth Amendments to the US Constitution.

  3. Plaintiff is a citizen of the United States and the State of Maine in which she resides and is entitled to the protection of its laws. Respondent third-party record keeper is a resident of or is found in this district.

  4. According to law, Plaintiff, a person entitled to Notice of the Summons under IRC 7609(a), has the right to begin these proceedings to quash such summons not later than the 20th day after the day such notice is given, and should mail within 20 days from the date of Notice at the address shown on the summons by registered or certified mail a copy of this petition to (A) the third-party record keeper who received the summons, and (B) to the IRS Officer before whom the summoned person is to appear at the address shown on the summons.

  5. The Plaintiff is bringing to this Court this Petition to Quash or in the alternative, Injunction because the Respondent Department of the Treasury issued an informal request to the Respondent Bank for Plaintiff’s financial records without issuing a proper administrative summons in accordance with §7609.

  6. On June 7, 2011, the Respondent Department of the Treasury issued a letter stating it was “an official request for information concerning income paid…”. The letter goes on to say, “[w]e are therefore requesting that you provide us with documentation to corroborate the amount of income that was earned by Ms. Kathy Jackson and reported to the Internal Revenue Service for the taxable year 2007.”

  7. The letter further requests, “[a]s soon as possible, and no later than June 22, 2011, please mail legible copies of the documents requested.”

  8. The letter was signed by Elizabeth M. Bux, an attorney with the Department of the Treasury in the “Greensboro, Group 2” area.

  9. On June 13, 2011, Mary E. Happe, the Records Custodian of the PNC Bank contacted the Plaintiff via email with a copy of a letter to be sent in the US Mail stating she had “been served with a legal document directing it to produce certain records involving [Plaintiff’s] accounts with the bank.” The letter goes on to inform Plaintiff of the Bank’s intention to provide the documents “on or after the return date that is listed in the papers”, “in the absence of a court order directing the bank not to comply with this document”.

  10. The Respondent, Department of the Treasury only served the Bank with a letter requesting the information and did not issue a proper summons under §7609. The purpose of the section is to give Taxpayer notice of rights to protect personal documents from unlawful seizure or inspection. There is nowhere in the law that provides for the Department of the Treasury to circumvent the rights of the taxpayer by simply sending a letter and stating it is an “official request for information”, namely, the Plaintiff’s financial records. The Department of Treasury did not indicate in any way that the request was a legal or official summons.

  11. The letter was not sent by an agent with the Internal Revenue Service; it was sent by the Department’s legal counsel. Such a request by a legal representative should surely warrant more standard for notice to and protection for the taxpayer who is an interested party in the request.

  12. U.S.C. §7602(a)(2) states that the Secretary may request records through a summons. §7602(c)(1) states that “[a]n officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer that contacts with persons other than the taxpayer may be made.” §7602(c)(3)(B) states that this subsection shall not apply “if the Secretary determines for good cause shown that such notice would jeopardize collection of any tax or such notice may involve reprisal against any person; or (C) with respect to any pending criminal investigation.”

  13. The Plaintiff has not been given any indication that she is under criminal investigation; to her knowledge, no Justice Department referral has been made. Therefore, the Plaintiff was entitled to know about the request for information to the bank prior to the bank being contacted. Also, to the Plaintiff’s knowledge, no “good cause shown that such notice would jeopardize collection of any tax…” has been submitted to justify this subversion of the Plaintiff’s rights as a taxpayer.

  14. If a Justice Department referral has been made, no summons can be issued under §7602 nor any action be taken against the Plaintiff under §7604.

  15. Plaintiff did not file a tax return for taxable year 2007. On February 7, 2011, the Internal Revenue Service issued a Notice of Deficiency informing the Plaintiff that she did not file a return and owes taxes in an amount of $4,801 with penalties in the amount of $960.20. This was a standard Notice of Deficiency letter, complete with instructions on how to pay or file a case with the Tax Court (or waive the right to contest the deficiency in Tax Court), signed by Jim Grimes, Field Director of Compliance Services in the Fresno Service Center.

  16. The Notice of Deficiency included a Substitute for Return (Income Tax Examination Changes) for the year 2007 that the Internal Revenue Service generated with their own information.

  17. There was no indication in any of the documentation that the Plaintiff was under any criminal investigation or that the Department of the Treasury would be seeking bank records to supplement the information they included in the tax return.

  18. The Plaintiff received the Notice of Deficiency and timely filed a Petition to the Tax Court on May 1, 2011, less than 90 days after the date of the Notice of Deficiency. The resulting case number in Tax Court is 10524-11 and is still pending.

  19. The letter to the bank is not a legal summons and does not comply with legal mandates to protect the taxpayer. For instance, the letter was dated June 7, 2011 and it demands the records by June 22, 2011, fifteen days after the letter is addressed. USC §7609(d) discusses the time limits for a properly summoned party:


“(d) Restriction on examination of records

No examination of any records required to be produced under a summons as to which notice is required under subsection (a) may be made —

(1) before the close of the 23rd day after the day notice with respect to the summons is given in the manner provided in subsection (a)(2), or

(2) where a proceeding under subsection(b)(2)(A) was begun within the 20-day period referred to in such subsection and the requirements of subsection(b)(2)(B) have been met, except in accordance with an order of the court having jurisdiction of such proceeding or with the consent of the person beginning the proceeding to quash”.

  1. The action by the Department of the Treasury has violated a number of provisions in the statutes mentioned above. The Department of the Treasury did not properly summon the Bank nor did the Department properly notify the Plaintiff of the intention to contact the Respondent PNCBank for her records pertaining to tax year 2007.

  2. U.S.C. §7609 states that the taxpayer must be notified “within 3 days of the day on which such service is made” of the summons to the Respondent PNCBank. The Respondent Department of the Treasury did not notify the Plaintiff of any request made to the Respondent PNCBank. The Respondent PNCBank notified the Plaintiff of the request and informed the Plaintiff that it intends to hand over the records.

  3. “Such notice shall be sufficient if, on or before such third day, such notice is served in the manner provided in section 7603 (relating to service of summons) upon the person entitled to notice…”. §7609(a)(2). The Plaintiff has not received sufficient notice of summons.

  4. The records were demanded to be sent within 15 days of the date of the letter. If the Respondent PNCBank hands over the records by the deadline listed in the “official request” notice, then the Plaintiff loses the opportunity to file a Petition to Quash by the amount of five days. It is against the statute for the Respondent PNCBank to hand over the records prior to the close of the 23rd day after the summons, which would be, had this been an official summons, no earlier than July 1, 2011, eight days after the notice allows.

  5. The purpose of a summons, according to U.S.C. §7609(b)(2)(A) is to gain information regarding taxpayers in an investigation to collect taxes.

“To enforce an IRS summons, the IRS must establish a prima facie case to demonstrate its “good faith” that the summons; (1) is issued for a legitimate purpose; (2) seeks information relevant for that purpose; (3) seeks information that is not already within IRS possession; and (4) satisfies all administrative steps required by the United States Code.”

See United States v. Powell, 379 U.S., 48, 57-58, 85 S.Ct. 248, 254-255 (1964); Fortney v. United States, 59 F.3d 117, 119 (9th Cir. 1995).

  1. According to this information, the records sought in a summons appear to be no different and the purpose of the demand appears to be no different from that indicated in the “official request for information” submitted to Respondent PNCBank by Respondent Department of the Treasury. For the records sought, a proper administrative summons was appropriate and statutorily required.

  2. The Court in C&J Trust v. United States, 2002 WL 1987417 (E.D.Cal.), stated “Section 7609’s primary purpose is ‘to require that the target taxpayer be given notice, so that he would be able to assert appropriate defenses.’” (citing United States v. Pittsburgh Trade Exchange, Inc., 644 F.2d 302, 305 (3rd Cir. 1981); United States v. First Bank, 737 F.2d 269, 271 (2nd Cir. 1984). “’The plain meaning’” of section 7609(a) requires that notice be given only to the person(s) ‘identified’ in the summons.’” (citing again First Bank, 737 F.2d at 273. Id. at. 2.

  3. The Plaintiff would like to convey, in simple terms, the violations she believes took place which led to the infringement on her due process rights as a taxpayer and which brought rise to this “Petition to Quash or in the alternative, Injunction”.

    1. There was no proper administrative summons issued;

    2. The Plaintiff was not given sufficient notice of any communication planned or which took place within three days of the request;

    3. In fact, the Plaintiff never received notice, sufficient or otherwise, by the Respondent Department of the Treasury, of the demand to Respondent PNCBank;

    4. The “official request” demanded records ordinarily sought by a summons within 15 days, rather than the statutorily mandated 23 days granted in a summons, thereby cutting into the time the Plaintiff would have to intervene in a court of law;

    5. The “official request” was issued by an attorney and not by an investigator with the Internal Revenue Service;

    6. The Respondent PNCBank plans to release the records in violation of statute.

WHEREFORE, the Plaintiff prays this Court hold the “official request” is not a statutorily acceptable summons in accordance with §7609; that a statutory summons is appropriate and mandated in this case; that the Plaintiff did not receive proper or sufficient notice of the information being sought; that Plaintiff was not given the statutorily mandated 20 days in which to launch a Petition to Quash; and that the “official request” be denied.

Respectfully submitted,

__________________________
Kathy J. Patriot

CERTIFICATE OF SERVICE: I c I certify that on this date, I sent via certified mail in a postage paid envelope, a copy of the foregoing Petition to Quash or in the alternative, Injunction to the following persons at the addresses below:

Department of the Treasury
Internal Revenue Service
Office of Division Counsel
ATTN: Elizabeth M. Bux
Kinston Building, Mail Stop 24
2303 W. Meadowview Rd.
Greensboro, NC 27407-3726

PNCBank
ATTN: Mary E. Happe, Records Custodian
500 First Avenue
Pittsburgh, PA 15219

___________________________________ June 16, 2011
Kathy J. Patriot