United States District Court, D. Minnesota
February 11, 2014
UNITED STATES OF AMERICA, Petitioner,
DAVID SORENSON, individual and as President of Anderson-Sorenson Homes Inc., Respondent.
REPORT AND RECOMMENDATION
JANIE S. MAYERON, Magistrate Judge.
This matter is before the Court on the United States of America's Petition to Enforce Internal Revenue Service ("IRS") Summonses issued to Respondent David Sorenson in both his individual capacity and as president of Anderson-Sorenson Homes, Inc. At the hearing on this Petition, Bahram Samie, Assistant United States Attorney, appeared on behalf of the United States and David Sorenson appeared pro se. For the reasons stated below, the Court recommends that the Petition be granted.
Internal Revenue Service (IRS) Officer Dale Mikel is investigating the federal income tax liability of Sorenson and of Anderson-Sorenson Homes, Inc. for the tax years 2010-2011. (Mikel Decl. ¶ 2.) On June 7, 2013 Mikel issued and served two administrative summonses directing Sorenson to appear on July 10, 2013, to testify and produce for examination all documents and records regarding income received from 2010-2011. ( Id. ¶¶ 5-6, Exs. A-B.) Sorenson failed to appear, prompting the IRS to send a "last chance" letter instructing Sorenson to appear on August 14, 2013. ( Id. ¶¶ 7-8, Exs. C-D.) Sorenson again failed to appear, prompting the United States to commence this action. ( See Pet, Dec. 12, 2013.)
On December 16, 2013, this Court issued an Order to Show Cause, directing Sorenson to appear on February 10, 2014 and show cause why he should not be compelled to obey the summonses [Docket No. 3]. On December 19, 2013, Sorenson was personally served copies of the Order to Show Cause, Petition, Mikel Declaration and exhibits [Docket No. 4]. Sorenson appeared at the hearing and did not object to enforcement of the summonses. Rather, he informed the Court of his intent to have his accountant prepare and file the necessary tax returns within thirty days.
Before enforcing a summons issued by the IRS, a court must find that the summons (1) was issued for a legitimate purpose, (2) targets information relevant to that purpose, (3) requests information not already in the IRS's possession, and (4) satisfies all administrative steps under the Internal Revenue Code. United States v. Powell, 379 U.S. 48, 57-58 (1964).
At the hearing, Sorenson did not contest the summons on any of the Powell grounds and instead expressed the desire to comply. He asserted his belief that the 2010 and 2011 returns could be filed within thirty days. Even if Sorenson had objected, Mikel's declaration establishes that the Powell requirements are satisfied. The summonses were issued for the legitimate purpose of investigating the federal income tax liability of Sorenson individually, and of Anderson-Sorenson Homes, Inc. The books, records, papers, and other requested documents and testimony are relevant to that purpose. The IRS has not obtained the documents or information through other means. Lastly, Mikel was authorized to issue the summonses, and there is no indication that the summonses do not comply with all administrative requirements.
The IRS summonses were issued for a legitimate purpose, seek relevant information, request information the IRS does not already possess, and all administrative requirements have been fulfilled. Accordingly, based on the files, records, and proceedings herein, IT IS HEREBY RECOMMENDED that:
1. The United States of America's Petition to Enforce Internal Revenue Summonses [Doc. No. 1] be GRANTED and that Respondent be Ordered to obey every requirement of the IRS summonses issued on June 7, 2013 for tax years 2010 and 2011 within 30 days of the date this Report and Recommendation is adopted by the United States District Court; and
2. JUDGMENT BE ENTERED ACCORDINGLY.