DOJ says IRS summons unenforceable
- A Second Front: Schulz v. IRS
A second front has been established in the People's defense against
the government's invasion of our First Amendment Right to Petition.
Bob Schulz has sued the IRS for interfering with his Right to
Petition for Redress.
The government decided to retaliate against the leaders of the
Petition process, including Bob Schulz in his personal capacity and
as Chairman of the WTP organization. The government served Schulz
with a Summons, demanding that Schulz turn over certain personal
records to the IRS.
Schulz immediately sued the IRS in the US District court. In his
complaint, Schulz asked the Court to quash the IRS Summons on the
grounds that the IRS did not have a legitimate purpose, that the IRS
was infringing on his First Amendment Right to Petition and his
Right to associate with others of like mind, and that the Summons
was nothing more than harassment and impermissible retaliation.
Right-click here for the Memorandum of Law.
The IRS, as defendant, did not respond to the lawsuit. They never
made an appearance in District Court! Eventually, Schulz motioned
the District Court for a default judgment. The District Court issued
its decision, holding that the court was prevented by law from
quashing an IRS Summons.
Schulz immediately appealed to the US Court of Appeals for the
Second Circuit (see Schulz's Appellant Brief). The IRS, through its
attorney, the U.S. Department of Justice, decided to make an
appearance in the court of Appeals. DOJ, through its Senior Counsel,
Robert Storch, filed a Respondent's Brief. Schulz filed his Reply
Oral argument was held last week on December 13, 2004.
At oral argument, DOJ argued that the District Court lacked
jurisdiction and could not quash the Summons served on Schulz
because the Summons legally meant nothing. Ironically, in order to
scuttle Schulz's case by asserting lack of jurisdiction, and to
avoid a judicial skirmish directly debating the Summons authority of
the IRS, DOJ argued before the three appellate justices that the IRS
Summons was legally "unenforceable," therefore Schulz was under no
legal obligation to respond to it, denying the court subject matter
Schulz disagreed. He argued that Reisman was dispositive, that in
Reisman, the US Supreme Court recognized the jurisdiction of the
federal courts in such matters, by declaring the right of a person
served with an IRS Summons to respond to the Summons by taking the
IRS to a US District Court. Schulz also argued that under Powell,
the IRS was required to appear in court to prove its purpose in
issuing the Summons was a legitimate purpose. Finally, Schulz argued
that the court had jurisdiction on the ground that the Summons was,
in fact, an IRS "enforcement action" with significant adverse,
statutorily prescribed consequences (including arrest for contempt),
if he either ignored the Summons or failed to give the IRS what it
was demanding of Schulz. See IRC Sections 7604 & 7210.
During argument, one of the justices inquired of Storch, "If there
is no legal obligation to respond to IRS Summons, then why didn't
the IRS simply print a disclaimer on the Summons itself informing
people that they did not have to respond to the Summons?" Storch
could not answer the question.
In a highly unusual move, the appellate court ordered DOJ to submit
a memorandum to the Court by December 23, 2004, further explaining
to the court why DOJ believes people do not have to respond to IRS
Summons, why people will suffer no consequences if they ignore such
Summons, and why the court is without power to grant Schulz's
request to quash the Summons. In response, Storch, the Senior
Counsel in the office of the US Attorney, repeatedly asserted he did
not understand this area of the law and would have to engage IRS
officials to draft the Memorandum requested by the Court.
RIGHT-Click here to save (download) a copy of the audio file
containing the oral arguments made by Schulz and the DOJ before the
2nd Circuit Court of Appeals on December 13, 2004 to your computer.