Thursday, June 26, 2014
Following up on Saturday's op-ed by Steve Johnson on Thursday's Supreme Court decision in United States v. Clarke, No. 13.301 (U.S. June 19, 2014): SCOTUSBlog: Court Clarifies Standard for Evidentiary Hearing in Enforcement of IRS Summons, by Susan C. Morse (Texas):
The Supreme Court on June 19 unanimously vacated and remanded an Eleventh Circuit per curiam decision in United States v. Clarke. The Eleventh Circuit had reversed a district court refusal to grant a summons recipient an evidentiary hearing to challenge an IRS summons. The Supreme Court emphasized the abuse of discretion standard applicable to the review of the district court’s decision and clarified the standard that the district court itself should apply. It explained that “the taxpayer is entitled to examine an IRS agent when he can point to specific facts or circumstances plausibly raising an inference of bad faith.” The decision leaves open an underlying legal question in the case: whether improper purpose can follow from the issuance of a summons in retaliation for refusal to extend a statute of limitations and/or in anticipation of a not-yet-filed Tax Court suit.