An Appeals Court makes it harder for the Service to enforce a summons.
The agency issued summonses to four banks, requesting a taxpayer’s account records. But IRS violated the rule that the taxpayer must get notice of a third-party summons at least 23 days before the agency examines the records. Violating the 23-day rule automatically invalidates the summonses, in the Court’s opinion (Jewell, 10th Cir.). Expect the Supreme Court to eventually weigh in on this issue.
This decision conflicts with the rulings of five other Appeals Courts. And the government is serious about protecting its summons rights. Later this spring, the Supreme Court will rule on whether taxpayers who claimed that IRS issued a summons for improper purposes can have a pre-enforcement hearing without first having to substantiate the claim.