United States District Court, D. Hawaii
FINDINGS AND RECOMMENDATION TO DENY THE PETITION TO
QUASH 3RD PARTY SUMMONS AND TO GRANT THE UNITED STATES'
MOTION FOR SUMMARY DENIAL OF THE PETITION TO QUASH AND FOR
ENFORCEMENT OF INTERNAL REVENUE SERVICE SUMMONS
RICHARD L. PUGLISI, UNITED STATES MAGISTRATE JUDGE.
the Court are (1) the Petition to Quash 3rd Party Summons,
filed by Louise Tower on May 19, 2017 (“Petition”);
and (2) the Motion for Summary Denial of the Petition to
Quash and for Enforcement of Internal Revenue Service
Summons, filed by the United States on July 20, 2017
(“United States' Motion”). ECF Nos. 1, 12.
Briefing was completed on these two matters on August 28,
2017. Pursuant to Local Rule Rule 7.2(d) of the Local Rules
of Practice of the United States District Court for the
District of Hawaii, the Court elects to decide these matters
without a hearing and VACATES the hearing set for September
8, 2017. As discussed in detail below, the Court FINDS AND
RECOMMENDS that the district court DENY the Petition and
GRANT the United States' Motion.
3, 2017, Internal Revenue Service (“IRS”) Tax
Specialist Blanche Galasinao, issued a summons to the Bank of
Hawaii to produce bank information related to Petitioners
Louise Tower and Shawn Morse (“Summons”).
See ECF Nos. 1-15, 12-2. The Summons directed the
Bank of Hawaii to produce all bank records in its possession
relating to any bank accounts, loans made or applied for, or
for any credit/debit/charge cards with respect to Petitioners
for years 2014 and 2015. Id. In accordance with
Internal Revenue Code Section 7603, Ms. Galasinao served an
attested copy of the Summons on Bank of Hawaii via certified
mail. ECF No. 12-1, Galasinao Decl., ¶¶ 4-5. Ms.
Galasinao also sent notice of the summons to Petitioners by
certified mail pursuant to Internal Revenue Code Section
7609(a). Id. ¶ 6. Ms. Tower then filed the
present Petition seeking to quash the Summons issued to Bank
of Hawaii. ECF No. 1. In response, the United States filed
its Motion seeking denial of the Petition and enforcement of
the Summons. ECF No. 12.
enforce a summons, the government must establish good faith
by showing that the summons: (1) is issued for a legitimate
purpose; (2) seeks information relevant to that purpose; (3)
seeks information not already within the IRS's
possession; and (4) satisfies all administrative steps
required by the United States Code. United States v.
Powell, 379 U.S. 48, 57-58 (1964). The government's
burden is “a slight one” and is generally
satisfied by the sworn declaration of the IRS agent who
issued the summons establishing that the Powell
requirements have been met. Fortney v. United
States, 59 F.3d 117, 120 (9th Cir. 1995).
the government has shown that the Powell
requirements have been met, the taxpayer is entitled to an
evidentiary hearing to challenge the summons' validity if
the taxpayer presents “specific facts or circumstances
plausibly raising an inference of bad faith.”
United States v. Clarke, 573 U.S.___, 134 S.Ct.
2361, 2367, 189 L.Ed.2d 330 (2014). “Naked allegations
of improper purpose are not enough: The taxpayer must offer
some credible evidence supporting his charge.”
Id. The taxpayer must “make a showing of facts
that give rise to a plausible inference of improper
motive.” Id. at 2368.
The Powell Requirements Have Been Met.
the Court finds that the government has demonstrated that the
Powell requirements have been met. The IRS submitted
the declaration of IRS Tax Specialist Blanche Galasinao, who
issued the Summons, establishing that the Summons meets the
four Powell requirements. See ECF No. 12-1,
Galasinao Decl. Specifically, Ms. Galasinao's declaration
(1) the Summons was issued for a legitimate purpose as part
of the IRS's investigation to determine Petitioners'
federal tax liabilities for the calendar years 2014 and 2015;
(2) the information sought through the Summons is relevant to
the investigation to help the IRS determine the correct
federal tax liabilities of Petitioners;
(3) the Summons seeks documents not already within the
IRS's possession; and
(4) all administrative requirements have been met with regard
to the Summons.
the government has met the four Powell requirements,
the burden shifts to Petitioners to show facts that give rise