102 Iowa L. Rev. 1299 (2017)

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Abstract

Congress has granted the Internal Revenue Service (“IRS”) a broad administrative summons power that it can use with almost unlimited discretion to produce records and testimony to investigate taxpayers for incorrect tax returns. While these investigations are intended to be civil in nature, evidence uncovered during the investigation can lead to criminal prosecution. However, section 7609 of the Internal Revenue Code (“IRC”) provides taxpayers some protection by requiring the IRS to give taxpayers 23- days’ notice before they can enforce a summons on third-party records pertaining to the taxpayer. This gives the taxpayer under investigation an opportunity to quash the summons if the taxpayer can convince a judge that the IRS is using their administrative summons for an improper purpose (for example, attempting to uncover criminal tax fraud but claiming that the investigation is civil in nature, or simply using the administrative summons as a form of harassment). Yet when the IRS has failed to give a taxpayer the full 23-day notice, circuit courts have found various methods of excusing the lack of notice, thereby depriving the taxpayer of the protection set forth by Congress. This changed in 2014 with the Tenth Circuit’s decision in Jewell v. United States. In Jewell, the Tenth Circuit created a circuit split by finding that if the IRS gives a taxpayer less than 23-days’ notice and the taxpayer files a motion to quash the summons, the motion must be granted. This Note argues that the Tenth Circuit is the only court to have thus far come to the correct legal interpretation of IRC § 7609. It explores the legal justification of the Tenth Circuit’s holding as well as substantial public policy reasons for requiring strict enforcement of the 23-day notice requirement