What happens if the law requires the IRS to provide notice to the taxpayer and the taxpayer to provide notice to the IRS and both parties fail to provide the notice? Can the government ignore its failure and enforce consequences for the taxpayer’s failure? The answer is “yes” when it comes to the IRS summons, according to Holcomb v. Internal Revenue Service, No. 19cv1482-LAB (S.D. Cali. 2019).
Facts & Procedural History
The taxpayer banked at Wells Fargo. The IRS issued a summons to the bank to obtain the taxpayer’s records. It can do this as part of an IRS audit or to collect unpaid tax debts.
The court record does not indicate whether the IRS provided the taxpayer with the required notice of the summons. The Code requires the IRS to give the taxpayer notice within 3 to 23 days of the summons.
Within this time, the taxpayer responded to the IRS with notice that he intended to quash the IRS summons. This notice was faxed to the IRS.
The court was tasked with addressing the validity of the IRS summons.
About the IRS Summons
The IRS uses its power to issue administrative summons to gather information from the taxpayer and third parties. This can include records and even testimony.
The IRS’s administrative summons power is set out in Sec. 7609. This law allows the IRS to issue a summons without court intervention. It also provides the court with jurisdiction to hear disputes involving IRS summonses. These disputes typically involve the taxpayer filing a motion to quash the IRS’s summons.
Notice Required for an IRS Summons
The law also imposes mirror notice requirements on both the IRS and the taxpayer. Both notice requirements say that the other party has to provide notice by “registered or certified mail.”
In this case, the IRS apparently provided proper notice, but it did not do so by registered or certified mail. The taxpayer did the same. He provided the IRS with the required notice, but not by registered or certified mail. Is the IRS summons valid and enforceable in this situation and can the court consider the motion to quash?
The court noted that the IRS can be excused for not complying with the notice requirement if the taxpayer was not harmed by the omission. In this case, the taxpayer responded timely to the IRS summons. Thus, the court concluded that the taxpayer was not harmed by the IRS’s omission.
The court then addressed the taxpayer faxing the IRS notice rather than mailing it to the IRS by registered or certified mail. The court noted that the mailing requirements could not be waived for taxpayers:
Although the government’s failure to comply with notice requirements under 26 U.S.C. § 7609 may be excused, the rule does not work in reverse to excuse a movant’s failure to comply.
According to the court, unlike the IRS, taxpayers are held to strict compliance.