Supreme Court Again Avoids Resolving Split of Authority on Conditional Summons Enforcement
When the IRS issues a summons for testimony or documents and the summoned party refuses to testify or turn over the documents, the IRS must go to federal district court to get the court to enforce the summons. Unless the summoned party presents a valid objection (e.g., attorney-client privilege), the court usually orders the party to comply with the summons. Some courts, however, have placed conditions on the IRS when enforcing a summons.
For example, in the recent case of United States v. Jose, 71 F.3d 1484 (9th Cir. 1995), the district court required that the IRS notify the taxpayer five days in advance before showing any documents obtained through the summons to any division of the IRS outside the civil examination division. The district court was concerned that the IRS might show the documents to its criminal investigation division, despite the IRS' current position that it was merely conducting a civil audit.
In Jose, the IRS appealed the judge's ruling, arguing that the judge had no authority to impose any conditions on summons enforcement. Whether a judge has the power to impose conditions is an issue which has divided the Courts of Appeal. The Fifth Circuit has held that a judge has no power to impose conditions. United States v. Barrett, 837 F.2d 1341 (5th Cir. 1988). The Ninth Circuit has held that the judge has such power. United States v. Zolin, 809 F.2d 1411 (9th Cir. 1987). In 1989, the United States brought the Zolin case to the Supreme Court to resolve this conflict. However, a 4-4 tie in the Supreme Court resulted in the Court's not being able to resolve the conflict. 491 U.S. 554, 561 (1989).
In the recent Jose case, the Ninth Circuit held that the IRS' appeal of the conditional enforcement order was premature, since the IRS contended that it as yet had no intention of showing the summoned documents to other IRS divisions. The IRS appealed this Ninth Circuit ruling to the Supreme Court. In a brief, per curiam opinion, the Supreme Court reversed the Ninth Circuit. The Supreme Court held that the district judge's ruling that imposed a condition on enforcing an IRS summons was a final disposition from which an appeal could be taken. 117 S. Ct. 463 (12/2/96).
Interestingly, in Jose, the Supreme Court noted the intercircuit conflict and the fact that it has not yet been resolved. The Court, however, expressed no opinion on whether conditions imposed on enforcing an IRS summons are ever permissible. While the Court again left this issue unresolved, by forcing the Ninth Circuit to rule in the Jose appeal on the merits, the Supreme Court may be positioning the Jose case to be a vehicle for the IRS to bring the issue back to the Supreme Court to resolve the conflict between the Circuits.
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