United States District Court, D. Kansas
MEMORANDUM AND ORDER
DANIEL
D. CRABTREE UNITED STATES DISTRICT JUDGE
This
matter comes before the court on respondent Kelly
Kaeckell's Objection to Report and Recommendations (Doc.
23 objecting to Doc. 19). Respondent objects to Judge James
P. O'Hara's recommendation that the district court
enforce the IRS summons and direct respondent to appear on a
date certain to provide testimony and produce requested
documents and records. Doc. 23. As explained below, the court
concludes that Judge O'Hara did not err in his
recommendation. Thus, the court overrules respondent's
objection and affirms Judge O'Hara's decision
I.
Factual and Procedural Background
On May
7, 2019, the United States of America initiated this action
to enforce its Internal Revenue Service (“IRS”)
summons (Doc. 1 at 8) issued to pro se respondent, Kelly
Kaeckell.[1]Respondent objected to the summons, arguing
petitioner (1) never served him a notice of intent to levy
and (2) did not follow proper procedure when serving the
summons because the summonses lacked an OMB number. Judge
O'Hara conducted a show cause hearing and directed the
parties to file supplemental briefing. On July 17, 2019,
Judge O'Hara issued a Report and Recommendation,
recommending that the court issue an order enforcing the IRS
summons and directing respondent to appear and provide
testimony. The Report and Recommendation advised that the
parties could file objections within 14 days. Respondent
appeared to file a timely objection to the Report and
Recommendation and raised arguments similar to those raised
before Judge O'Hara. Doc. 23. Petitioner responded,
asking the court to affirm Judge O'Hara's
recommendation. Doc. 24. But, respondent, in his Reply,
stated his prior filing (Doc. 23) “was not an objection
to Judge O'Hara's Report & Recommendation.”
Doc. 25 at 1. Instead, respondent explained, the filing was
intended to respond to petitioner's response to
respondent's Motion to Unseal Document 16 (Doc. 21).
Notwithstanding respondent's waiver of his objection to
the Report and Recommendation, because respondent proceeds
pro se, the court considers his objections below.
II.
Standard of Review
Federal
Rule of Civil Procedure 72(a) permits a party to present
specific, written objections to a magistrate judge's
order. When reviewing a magistrate judge's order deciding
nondispositive pretrial matters, the district court applies a
“clearly erroneous or contrary to law” standard
of review. See First Union Mortg. Corp. v. Smith,
229 F.3d 992, 995 (10th Cir. 2000) (quoting Ocelot Oil
Corp. v. Sparrow Indus., 847 F.2d 1458, 1461-62 (10th
Cir. 1988)); 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P.
72(a). Under this clearly erroneous standard, the district
court does not conduct a de novo review of the factual
findings; instead, it must affirm a magistrate judge's
order unless a review of the entire evidence leaves it
“with the definite and firm conviction that a mistake
has been committed.” Ocelot Oil Corp., 847
F.2d at 1464. In contrast, “the contrary to law”
standard permits the district court to conduct an independent
review of purely legal determinations made by the magistrate
judge. Sprint Commc'ns Co. L.P. v. Vonage Holdings
Corp., 500 F.Supp.2d 1290, 1346 (D. Kan. 2007)
(citations omitted). A magistrate judge's order is
contrary to law if it “fails to apply or misapplies
relevant statutes, case law or rules of procedure.”
Walker v. Bd. of Cty. Comm'rs of Sedgwick Cty.,
No. 09-1316-MLB, 2011 WL 2790203, at *2 (D. Kan. July 14,
2011) (quotation omitted). The court applies this governing
standard below.
III.
Legal Standard Governing Enforcement of IRS
Summonses
The IRS
is authorized to issue an administrative summons to
“ascertain[ ] the correctness of any return, mak[e] a
return where none has been made, determin[e] the liability of
any person for any internal revenue tax . . ., or collec[t]
any such liability . . . .” 26 U.S.C. § 7602(a).
The summons authorizes the IRS to “examine any books,
papers, records or other data” relevant to the inquiry,
and “summon the person liable for tax” to testify
before the IRS and provide relevant records. Id.
§ 7602(a)(1)-(2).
To make
a prima facie case in an enforcement of a summons action, the
government must show (1) the summons was issued for a
legitimate purpose; (2) the summons seeks relevant
information; (3) that information is not already possessed by
the IRS; and (4) that it has followed all administrative
steps required by the Internal Revenue Code. United
States v. Powell, 379 U.S. 48, 57-58 (1964). The
government's burden on these requirements is “a
slight one” and the court must read the statute
“broadly” to “ensure that the enforcement
powers of the IRS are not unduly restricted.”
United States v. Balanced Fin. Mgmt., Inc., 769 F.2d
1440, 1443 (10th Cir. 1985). If the government meets this
burden, the “burden shifts to [the respondent] to show
that enforcement of the summons would ‘constitute an
abuse of the court's process . . . .'”
United States v. Wankel, 475 Fed.Appx. 273,
275 (10th Cir. 2012) (quoting Anaya v. United
States, 815 F.2d 1373, 1377 (10th Cir. 1987)).
“Such an abuse would take place if the summons had been
issued for an improper purpose, such as to harass the
taxpayer or to put pressure on him to settle a collateral
dispute, or for any other purpose reflecting on the good
faith of the particular investigation.”
Powell, 379 U.S. at 58.
IV.
Analysis
Here,
the petitioner seeks leave to enforce the IRS administrative
summons served on respondent. After considering the Report
and Recommendation, the court finds Judge O'Hara did not
err when he recommended that the court issue an order
enforcing the IRS summons and directing respondent to appear
on a date certain to provide testimony and produce the
requested documents and records. The court reaches this
conclusion because respondent has failed to carry his burden
to show that enforcing the summons constitutes an abuse of
the court's process. The court thus affirms Judge
O'Hara's reasoning and grants petitioner's
application to enforce the administrative summons, and
explains why, below.
To
enforce a summons, the government must show (1) that the
summons was issued for a legitimate purpose, (2) the summons
seeks relevant information, (3) the information is not
already possessed by the IRS, and (4) the IRS has followed
all required administrative steps. Powell, 379 U.S.
at 57-58. Petitioner filed a Declaration by Revenue Officer
Cathy Gabel in support of its petition. Doc. 1 at 5. This
Declaration demonstrates the IRS issued the summons for a
proper purpose and seeks information from relevant records,
testimony, and data-not possessed by the IRS-for an IRS
investigation aiming to collect “assessed, unpaid
federal income tax” allegedly owed by respondent.
Id. Also, the Declaration shows the IRS followed the
necessary administrative steps to procure the administrative
summons. As Judge O'Hara correctly found, petitioner has
made the required prima facia showing. And thus, the burden
shifted to respondent to show enforcement of the summons
would be an abuse of the court's process.
Respondent
initially challenged the good faith of the IRS investigation
in two ways. First, respondent asserted petitioner never
served a notice of intent to levy. But, as Judge O'Hara
correctly found, the record adequately reflects that the IRS
sent collection due process notices by certified mail to
respondent at his last known address in 2010, 2013, 2014, and
2015. Doc. 13-2 at 4. And, the IRS issued reminder notices to
respondent and mailed them to his last known address in 2012,
2013, 2014, 2015, and 2017. Id. at 4-5. Second,
respondent argued petitioner failed to follow proper
procedure when it served the summons because the summons did
not contain an Office of Management and Budget
(“OMB”) number, as required by 44 U.S.C. §
3215(a)(1). Judge O'Hara correctly rejected this
argument. And, the Tenth Circuit has rejected a similar
argument, holding 44 U.S.C. § 3215 “is
inapplicable to information collection request forms issued
during an investigation against an individual to determine
his or her tax liability.” Lonsdale v. United
States, 919 F.2d 1440, 1444-45 (10th Cir. 1990). The
court thus affirms Judge O'Hara's reasoning in his
Report and Recommendation.
In this
appeal, respondent raises three objections to Judge
O'Hara's recommendation. First, respondent asserts
the IRS violated his due process rights because the IRS
failed to send a Notice of Intent to levy in 2018 and 2019,
and has “never provided proof of any tax lien, or
notice of intent to levy since [March 25, 2015] . . .
.” Doc. 23 at 2. Second, respondent claims the IRS
Notices of Levy were “inappropriate” and
“designed to put [him] out of work again, thereby
having no funds available to hire legal counsel for this
case.” Id. Finally, respondent again ...