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1 1 (July 5, 2023)

handle is hein.crs/govemde0001 and id is 1 raw text is: Congressional ______ ~ Research Service Polselli v. IRS: Supreme Court Clarifies Notice Requirements for a Third-Party IRS Summons July 5, 2023 In Polselli v. IRS, decided on May 18, 2023, the Supreme Court held that when the Internal Revenue Service (IRS) issues a third-party summons to aid the collection of a taxpayer's delinquent taxes, the IRS is not required to provide notice to the person whose records are the subject of the summons. The Internal Revenue Code (IRC) authorizes the IRS to issue administrative summonses for the examination of records. Section 7609 of the IRC describes the procedures that apply to a third-party summons, which is directed to someone other than the taxpayer under examination who is believed to be in possession of materials relevant to that taxpayer. The IRS generally must provide notice to any person identified in a third-party summons. Section 7609 authorizes anyone entitled to such notice to bring a petition to quash the summons in federal district court, thus waiving the United States' sovereign immunity from lawsuits for this purpose. Section 7609(c)(2)(D)(i) creates an exception to this notice requirement when the summons is issued in aid of the collection of . .. an assessment made .. . against the person with respect to whose liability the summons is issued. Chief Justice Roberts's unanimous opinion for the Court in Polselli rejected the argument that this exception applies only when the delinquent taxpayer has a legal interest in the accounts or records summoned by the IRS. Rather, the Court held that the IRS is exempt from providing notice if the summons is issued to aid the collection of a tax assessment against a taxpayer. Because the parties identified in such a summons are not entitled to notice, they cannot move to quash the summons in federal court. This Legal Sidebar will discuss how the Court reached its decision and considerations for Congress about third-party IRS summonses. Legal and Factual Background The IRS entered formal assessments against Remo Polselli totaling more than $2 million in unpaid taxes and penalties. As part of its efforts to collect the amount due, the IRS initiated an investigation into assets Congressional Research Service https://crsreports.congress.gov LSB10998 CRS Legal Sidebar Prepared for Members and Committees of Congress