Petitioners are a holding company and its tax-shelter-promoting
subsidiaries. The Internal Revenue Service (IRS) issued summonses
to petitioners pursuant to § 7602(a) of the Internal Revenue Code,
which empowers the IRS to serve summons on any person, without
prior judicial approval, if the information sought is necessary to
ascertain that person's tax liability. The summonses requested
petitioners' financial statements for certain fiscal years, as well
as the names of persons who had licenses from petitioners to
distribute a certain medical device. When petitioners refused to
comply with the summonses, the Government brought an enforcement
action in Federal District Court. Petitioners opposed enforcement
on the ground that the IRS's request for the licensees' names
indicated that the IRS's "primary purpose" was to audit the
licensees, not petitioners. Petitioners contended that, if the IRS
wanted the licensees' names, it could not proceed solely under §
7602(a), but would have to comply also with the "John Doe" summons
procedures of § 7609(f), which requires the IRS to obtain prior
judicial approval to serve a summons seeking information on the tax
liability of unnamed taxpayers. The District Court found that the
IRS had made a sufficient showing of its interest in auditing
petitioners' returns and enforced the summonses. The Court of
Appeals affirmed, holding that § 7609(f) applies only when the IRS
issues a summons to an identifiable party with whom it has no
interest in order to investigate the unnamed third parties' tax
liabilities.
Held: Where, pursuant to § 7602(a), the IRS serves a
summons on a known taxpayer with the dual purpose of investigating
both that taxpayer's tax liability and unnamed parties' tax
liabilities, it need not comply with § 7609(f), as long as all the
information sought is relevant to a legitimate investigation of the
summoned taxpayer. Where the summoned party is itself being
investigated, that party's self-interest provides sufficient
protection against the evils that Congress sought to remedy when it
enacted § 7609(f), which serves as a restraint on the IRS's
exercise of its summons power in the "John Doe" context. Here, on
the record, the licensees' names "may be relevant" to the
legitimate investigation
Page 469 U. S. 311
of petitioners, and thus the summonses were properly enforced.
Pp.
469 U. S.
314-324.
718 F.2d 7, affirmed.
MARSHALL, J., delivered the opinion for a unanimous Court.
JUSTICE MARSHALL delivered the opinion of the Court.
The question presented in this case is whether the Internal
Revenue Service (IRS) must comply with the "John Doe" summons
procedures of § 7609(f) of the Internal Revenue Code of 1954, 26
U.S.C. § 7609(f), when it serves a summons on a named taxpayer for
the dual purpose of investigating both the tax liability of that
taxpayer and the tax liabilities of other, unnamed parties.
I
Petitioner Tiffany Fine Arts, Inc., is a holding company for
various subsidiaries that promote tax shelters. [
Footnote 1] On October 6, 1981, Revenue Agent
Joel Lewis issued four summonses to Tiffany, pursuant to 26 U.S.C.
§ 7602(a). This provision empowers the IRS to serve a summons on
any person, without prior judicial approval, if the information
sought is necessary to ascertain that person's tax liability.
[
Footnote 2] The
Page 469 U. S. 312
summonses requested Tiffany's financial statements for the
fiscal years ending October 31, 1979, and October 31, 1980, as well
as a list of the names, addresses, Social Security numbers, and
employer identification numbers of persons who had acquired from
Tiffany licenses to distribute a medical device known as the
"Pedi-Pulsor." [
Footnote 3]
Tiffany refused to comply with the summonses, and the Government
then brought an enforcement action in the United States District
Court for the Southern District of New York, pursuant to 26 U.S.C.
§§ 7402(b) and 7604(a).
Tiffany opposed enforcement, principally on the ground that the
IRS's request for the names of the licensees indicated clearly that
the IRS's "primary purpose" was to audit the Pedi-Pulsor licensees,
not Tiffany itself. Tiffany offered to produce records in which the
names of the licensees were redacted. It took the position that, if
the IRS were truly
Page 469 U. S. 313
interested in only Tiffany's liability, the redacted records
would be sufficient for an adequate investigation.
According to Tiffany, if the IRS wanted to go further and obtain
the names of all the licensees, it could not proceed solely under §
7602, but would have to comply also with the requirements of §
7609(f), which applies to John Doe summonses. [
Footnote 4] Under § 7609(f), the IRS cannot serve
a summons seeking information on the tax liabilities of unnamed
taxpayers without obtaining prior judicial approval at an
ex
parte proceeding.
The IRS rejected Tiffany's offer of redacted documents. In an
affidavit filed in support of the Government's enforcement
petition, Revenue Agent Lewis asserted:
"I am conducting an investigation, one purpose of which is to
ascertain the correctness of the consolidated income tax returns
filed by [Tiffany] for the fiscal years ending October 31, 1979,
and October 31, 1980. One aspect of my investigation into the
correctness of Tiffany's consolidated corporate income tax returns
concerns possible underreporting of income received and
questionable business deductions claimed by Tiffany and its
subsidiaries."
App. 14a. In a supplemental affidavit, Agent Lewis conceded
that
"[i]t is certainly possible that, once the individual
[Pedi-Pulsor] licensees are identified, further inquiry will be
made into whether they correctly reported their income tax
liabilities."
Id. at 24a. He reasserted, however, that
one
purpose of his investigation was to audit Tiffany; in particular,
he sought to ascertain whether Tiffany had failed to report
recourse and nonrecourse notes provided to Tiffany by the
Pedi-Pulsor licensees. According to Lewis, the investigation of
Tiffany could not be performed properly with redacted
documents.
Page 469 U. S. 314
The District Court found that the IRS had made a sufficient
showing of its interest in auditing Tiffany's returns and enforced
the summonses. The United States Court of Appeals for the Second
Circuit affirmed. 718 F.2d 7 (1983). It held that the John Doe
provisions of § 7609(f) apply only when
"the IRS issue[s] a summons to an identifiable party in whom it
ha[s] no interest in order to investigate the potential tax
liabilities of unnamed third parties."
Id. at 13. Given the District Court's finding that one
purpose of the summonses was to investigate Tiffany, § 7609(f) was
not relevant here "even assuming that the summonses . . . were
issued to Tiffany partly for the purpose of investigating Tiffany's
customers."
Id. at 13-14.
The Federal Courts of Appeals are divided on the scope of §
7609(f). The Eighth and Eleventh Circuits, like the Second Circuit
in this case, have held that the IRS need not comply with § 7609(f)
when it seeks information on unnamed third parties as long as one
purpose of the summons is to carry out a legitimate investigation
of the named summoned party.
See United States v. Barter
Systems, Inc., 694 F.2d 163 (CA8 1982);
United States v.
Gottlieb, 712 F.2d 1363 (CA11 1983). In contrast, the Sixth
Circuit has taken the opposite position, holding that the IRS must
comply with § 7609(f) whenever it seeks information on unnamed
third parties -- even in cases in which one of the purposes of the
IRS is to investigate the named recipient of the summons.
United States v. Thompson, 701 F.2d 1175 (1983). We
granted certiorari to resolve this conflict.
466 U.
S. 925 (1984). We affirm.
II
Congress enacted § 7609 in response to two decisions in which we
gave a broad construction to the IRS's general summons power under
§ 7602(a). It is therefore useful to review those cases before
embarking on an analysis of the statutory provision.
Page 469 U. S. 315
In
Donaldson v. United States, 400 U.
S. 517 (1971), the IRS issued to an employer a § 7602
summons seeking records prepared by the employer that would be
relevant to an investigation of the tax liability of one of its
employees. The employee obtained a preliminary injunction
restraining his employer from complying with the summons. The
Government then moved for enforcement. In response, the employer
stated that it would have complied with the summons "
were it
not for' the preliminary injunction." Id. at 400 U. S. 521.
The employee, however, filed motions to intervene in the
proceedings, under Federal Rule of Civil Procedure 24(a)(2), in
order to oppose enforcement. He stated that he had an interest in
the outcome of the enforcement action and that this interest would
not be adequately represented by his employer. We held that the
employee's interest was not legally protectible and affirmed the
denial of the employee's motions for intervention.
Four years later, we decided
United States v.
Bisceglia, 420 U. S. 141
(1975). In
Bisceglia, the IRS issued to a bank a § 7602
summons for the purpose of identifying an unnamed individual who
had deposited a large amount of money in severely deteriorated
bills. The bills appeared to have been stored for a long period of
time under abnormal conditions, and the IRS suspected that they had
been hidden to avoid taxes. Although we recognized the danger that
the IRS might use its § 7602 summons power to "conduct
fishing
expeditions' into the private affairs of bank depositors,"
id. at 420 U. S.
150-151, we concluded that, on the facts of the case,
the IRS had not abused its power. Thus, we held that the summons
was enforceable.
Section 7609, the provision at issue in this case, was clearly a
response to these decisions. Both the Senate and the House Reports
accompanying the bill that became § 7609 focused exclusively on the
problem of "third-party summonses" -- that is, summonses served on
a party that, like the
Page 469 U. S. 316
employer in
Donaldson and the bank in
Bisceglia, is not the taxpayer under investigation. S.Rep.
No. 94-938, p. 368 (1976); H.R.Rep. No. 94-658, p. 306 (1975). In
fact,
Donaldson and
Bisceglia were the only two
cases cited in the texts of the Reports.
Referring to
Donaldson, the House Report noted that,
under the then-existing law,
"there is no legal requirement that the taxpayer (or other
party) to whose business or transactions the summoned records
relate be informed that a third-party summons has been served."
H.R.Rep. No. 94-658, at 306-307;
see also S.Rep. No.
94-938, at 368. Referring to
Bisceglia, both Reports
stated:
"In certain cases, where the [IRS] has reason to believe that
certain transactions have occurred which may affect the tax
liability of some taxpayer, but is unable for some reason to
determine the specific taxpayer who may be involved, the [IRS] may
serve a so-called 'John Doe' summons, which means that books and
records relating to certain transactions are requested, although
the name of the taxpayer is not specified."
S.Rep. No. 94-938, at 368; H.R.Rep. No. 94-658, at 306.
Both Reports asserted that the standards enunciated in
Donaldson and
Bisceglia might "unreasonably
infringe on the civil rights of taxpayers, including the right to
privacy." S.Rep. No. 94-938, at 368; H.R.Rep. No. 94-658, at 307.
Section 7609 stems from this concern. To deal with the problem of a
third-party summons in a case in which the IRS
knows the
identity of the taxpayer being investigated, Congress enacted §§
7609(a) and (b); these subsections require that the IRS give notice
of the summons to that taxpayer, and give the taxpayer the right
"to intervene in any proceeding with respect to the enforcement of
such summons." In this provision, Congress modified the result
reached in
Donaldson.
In the case of a John Doe summons, where the IRS
does not
know the identity of the taxpayer under investigation,
Page 469 U. S. 317
advance notice to that taxpayer is, of course, not possible. As
a substitute for the procedures of §§ 7609(a) and (b), Congress
enacted § 7609(f), which provides:
"Any summons . . .
which does not identify the person with
respect to whose liability the summons is issued may be served
only after a court proceeding in which the Secretary establishes
that -- "
"(1) the summons relates to the investigation of a particular
person or ascertainable group or class of persons,"
"(2) there is a reasonable basis for believing that such person
or group or class of persons may fail or may have failed to comply
with any provision of any internal revenue law, and"
"(3) the information sought to be obtained from the examination
of the records (and the identity of the person or persons with
respect to whose liability the summons is issued) is not readily
available from other sources"
(emphasis added).
See also § 7609(h)(2) (providing that
these determinations be made
ex parte, solely on the basis
of the IRS's petition and supporting affidavits). Section § 7609(f)
was a response to concerns that our decision in
Bisceglia
did not provide sufficient restraints, in the John Doe context, on
the IRS's exercise of its summons power.
See In re Tax
Liabilities of John Does, 671 F.2d 977, 979 (CA6 1982). With
this background in mind, we turn to consider the application of the
provision to the facts of this case.
III
The legal issue here is starkly posed. The District Court found
as a matter of fact -- and the Court of Appeals affirmed -- that
the IRS was pursuing a legitimate investigation of Tiffany's tax
liability. [
Footnote 5] At the
same time, the Court of
Page 469 U. S. 318
Appeals assumed, and the Government does not dispute, that the
IRS also intended to investigate the tax liabilities of the unnamed
Pedi-Pulsor licensees. The question before us, then, is whether the
IRS must comply with § 7609(f) in the case of such dual purpose
summonses.
This Court has recognized that there is
"a formidable line of precedent construing congressional intent
to uphold the claimed enforcement authority of the [IRS] if [this]
authority is necessary for the effective enforcement of the revenue
laws and is not undercut by contrary legislative purposes."
United States v. Euge, 444 U.
S. 707,
444 U. S.
715-716 (1980). Just last Term, we reemphasized that
"restrictions upon the IRS summons power should be avoided
absent unambiguous directions from Congress.'" United
States v. Arthur Young & Co., 465 U.
S. 805, 465 U. S. 816
(1984) (quoting United States v. Bisceglia, 420 U.S. at
420 U. S.
150). Thus we examine whether the statute and
legislative history indicate that Congress expressly considered the
problem presented here, and attempt to discern the congressional
purposes in enacting § 7609(f).
A
We find that the language of the statute is of little direct
help in determining how to treat dual purpose summonses. By their
terms, the John Doe provisions of § 7609(f) apply to a summons
"which does not identify the person with respect to whose liability
the summons is issued." Tiffany argues that the term "person" in
the statute must be read as "person" or "persons." Tr. of Oral Arg.
6. It then contends that, because the Pedi-Pulsor licensees are
persons not identified
Page 469 U. S. 319
in the summonses, § 7609(f) literally applies.
See United
States v. Thompson, 701 F.2d at 1178-1179.
The Government's construction is diametrically at odds with
Tiffany's:
"Section 7609(f) by its terms applies only if a summons 'does
not identify the person with respect to whose liability [it] is
issued.' That simply is not the case here. The summonses enforced
by the district court explicitly were issued '[i]n the matter of
the tax liability of Tiffany Fine Arts Inc. &
Subsidiaries.'"
Brief for United States 13.
See United States v. Barter
Systems, Inc., 694 F.2d at 168. The task that the parties ask
us to engage in is to determine whether the statutory reference to
"the person" should be read as "every person" or whether it should
be read as "at least one person." We are reluctant, on the basis of
the statutory language alone, to reach even a tentative conclusion
about the scope of § 7609(f). Neither construction strikes us as
clearly compelling.
Turning our attention to the legislative history, we note that
the facts of this case are different from those of
Donaldson and
Bisceglia in one important respect:
The summonses here were served on a party that was itself under IRS
investigation. Congress did not address this situation in 1976 when
it enacted the John Doe provisions. The Reports contain no mention
of a summons issued for the dual purpose of investigating both the
tax liability of the summoned party and the tax liabilities of
unnamed parties. They focus exclusively on summonses issued to
parties not themselves under investigation. [
Footnote 6] We conclude that Congress did not
expressly consider the problem of dual purpose summonses.
Page 469 U. S. 320
B
We, therefore, turn to consider whether dual purpose summonses
give rise to the same concerns that prompted Congress to enact §
7609(f). The Reports discuss only one specific congressional worry:
that the party receiving a summons would not have a sufficient
interest in protecting the privacy of the records if that party was
not itself a target of the summons. S.Rep. No. 94-938, at 368-369;
H.R.Rep. No. 94-658, at 307. Such a taxpayer might have little
incentive to oppose enforcement vigorously. Then, with no real
adversary, the IRS could use its summons power to engage in
"fishing expeditions" that might unnecessarily trample upon
taxpayer privacy. S.Rep. No. 94-938, at 373; H.R.Rep. No. 94-658,
at 311. Congress determined that, when the IRS uses its summons
power not to conduct a legitimate investigation of an ascertainable
target, but instead to look around for targets to investigate, the
privacy rights of taxpayers are infringed unjustifiably.
See S.Rep. No. 94-938, at 368; H.R.Rep. No. 94-658, at
307.
Page 469 U. S. 321
In response to this concern, §§ 7609(a) and (b) gave the real
parties in interest -- those actually being investigated -- the
right to intervene in the enforcement proceedings. Similarly, the
John Doe requirements of § 7609(f) were adopted as a substitute for
the procedures of §§ 7609(a) and (b). In effect, in the John Doe
context, the court takes the place of the affected taxpayer under
§§ 7609(a) and (b) and exerts a restraining influence on the IRS.
However, § 7603 provides no opportunity for the unnamed taxpayers
to assert any "personal defenses," such as attorney-client or Fifth
Amendment privileges that might be asserted under §§ 7609(a) and
(b).
See H.R.Rep. No. 94-658, at 309;
see also
S.Rep. No. 94-938, at 370. What § 7609(f) does is to provide some
guarantee that the information that the IRS seeks through a summons
is relevant to a legitimate investigation, albeit that of an
unknown taxpayer.
When, as in this case, the summoned party is itself under
investigation, the interests at stake are very different. First, by
definition, the IRS is not engaged in a "fishing expedition" when
it seeks information relevant to a legitimate investigation of a
particular taxpayer. In such cases, any incidental effect on the
privacy rights of unnamed taxpayers is justified by the IRS's
interest in enforcing the tax laws. More importantly, the summoned
party will have a direct incentive to oppose enforcement. In such
circumstances, the vigilance and self-interest of the summoned
party -- complemented by its right to resist enforcement -- will
provide some assurance that the IRS will not strike out arbitrarily
or seek irrelevant materials.
See, e.g., United States v.
Powell, 379 U. S. 48,
379 U. S. 57-58
(1964) ("[The IRS] must show that the investigation will be
conducted pursuant to a legitimate purpose, that the inquiry may be
relevant to the purpose, that the information sought is not already
within the [IRS's] possession, and that the administrative steps
required by the Code have been followed"). Here, for example,
Tiffany argued vigorously -- albeit unsuccessfully -- against
enforcement of the summonses.
Page 469 U. S. 322
This is not to say, of course, that as long as the summoned
party is under investigation, the IRS will be guaranteed an
adversary. It is possible that the summoned party, even if it is
itself being investigated, will not oppose enforcement, and that as
a result the IRS might obtain some information that is relevant
only to the liabilities of unnamed taxpayers. We recognize that the
privacy rights of the unnamed taxpayers might then be unnecessarily
trampled upon. Congress, however, did not seek to ensure that the
IRS have an adversary in all summons proceedings. All that it did
was require that a party with a real interest in the investigation
-- or the district court in the John Doe context -- have standing
to challenge the IRS's exercise of its summons authority. It is not
up to us, in construing the scope of this authority, to identify a
problem that did not trouble Congress, or to attempt to correct it.
We therefore conclude that, where the summoned party is itself
being investigated, that party's self-interest provides sufficient
protection against the evils that Congress sought to remedy when it
enacted § 7609(f).
We reject Tiffany's argument that, under the decision below, the
IRS can circumvent the requirements of § 7609(f) merely by stating
that the summoned party is under investigation. We do not find that
argument persuasive for two reasons. First, in such a case, the
summoned party would still have a sufficient interest in opposing
enforcement, as it would have no way of ascertaining that the IRS
was not in fact seeking to investigate it. This party would be an
interested adversary, and the concerns to which § 7609(f) was
addressed would thus be significantly attenuated. More importantly,
if the district court finds in the enforcement proceeding that the
IRS does not in fact intend to investigate the summoned party, or
that some of the records requested are not relevant to a legitimate
investigation of the summoned party, the IRS could not obtain all
the information it sought unless it complied with § 7609(f).
Our conclusion that the congressional concerns are adequately
met without resort to § 7609(f) when the summoned
Page 469 U. S. 323
party is itself under investigation should not be read to imply
that the IRS can obtain from that party, without complying with §
7609(f), information that is relevant only to the investigation of
unnamed taxpayers. In order to obtain such information, the IRS
would have to satisfy the requirements of § 7609(f). Therefore,
when the IRS does not comply with § 7609(f), the focus must be on
whether the information sought is relevant to the investigation of
the summoned party. Thus, we discuss next whether the names of the
Pedi-Pulsor licensees were relevant to an investigation of
Tiffany's tax liability.
C
During the enforcement proceedings, Tiffany argued that it was
possible to perform an investigation of its tax liability without
resort to the names of all the Pedi-Pulsor licensees. We have never
held, however, that the IRS must conduct its investigations in the
least intrusive way possible. Instead, the standard is one of
relevance.
See United States v. Powell, supra, at
379 U. S. 57.
The Government argues persuasively that contact with the licensees
might be necessary to verify that the transactions reported by
Tiffany actually occurred. In fact, Tiffany itself acknowledged the
relevance of the requested information, as it offered the IRS the
names of certain licensees:
"They might want to check a number of them at random, and this
we are willing to do because we understand that they are entitled
to review [Tiffany's] books."
App. 35. Tiffany refused, however, to provide all of the names,
as it did not think that in the course of its investigation of
Tiffany, the IRS would want to audit "50 out of 50 or 150 out of
150 participants."
Ibid.
On the record before us, we agree with the Government that the
names of the licensees "may be relevant" to the legitimate
investigation of Tiffany.
United States v. Powell, supra,
at
379 U. S. 57.
The decision of how many, and which, licensees to contact is one
for the IRS -- not Tiffany -- to make. Having already found that
Congress provided no "unambiguous
Page 469 U. S. 324
direction" on the question whether the IRS needs to comply with
§ 7609(f) in the case of dual purpose summonses, and that the IRS's
failure to comply with these requirements when serving such
summonses does not undermine the goals that Congress sought to
promote through § 7609(f), we conclude that the summonses here were
properly enforced. [
Footnote
7]
IV
We hold that where, pursuant to § 7602, the IRS serves a summons
on a known taxpayer with the dual purpose of investigating both the
tax liability of that taxpayer and the tax liabilities of unnamed
parties, it need not comply with the requirements for John Doe
summonses set out in § 7609(f), as long as all the information
sought is relevant to a legitimate investigation of the summoned
taxpayer. The judgment of the Court of Appeals is therefore
affirmed.
It is so ordered.
[
Footnote 1]
The other petitioners are subsidiaries of Tiffany Fine Arts,
Inc. Throughout this opinion, we refer to petitioners collectively
as "Tiffany."
[
Footnote 2]
This section provides:
"For the purpose of ascertaining the correctness of any return,
making a return where none has been made, determining the liability
of any person for any internal revenue tax or the liability at law
or in equity of any transferee or fiduciary of any person in
respect to any internal revenue tax, or collecting any such
liability, the Secretary or his delegate is authorized -- "
"(1) To examine any books, papers, records, or other data which
may be relevant or material to such inquiry;"
"(2) To summon the person liable for tax or required to perform
the act, or any officer or employee of such person, or any person
having possession, custody, or care of books of account containing
entries relating to the business of the person liable for tax or
required to perform the act, or any other person the Secretary [or
his delegate] may deem proper, to appear before the Secretary [or
his delegate] at a time and place named in the summons and to
produce such books, papers, records, or other data, and to give
such testimony, under oath, as may be relevant or material to such
inquiry; and"
"(3) To take such testimony of the person concerned, under oath,
as may be relevant or material to such inquiry."
[
Footnote 3]
According to Tiffany's president,
"the Pedi-Pulsor, is designed to permit bed-ridden patients to
prevent deep vein thrombosis through leg movement assisted by the
Pedi-Pulsor."
Affidavit in Opposition to Order to Show Cause, App. 16-17.
Two of the summonses also requested production of the list of
clients who acquired lithographs from Tiffany. After ascertaining
that Tiffany did not in fact market lithographs, the IRS dropped
its request for this information.
[
Footnote 4]
"A 'John Doe' summons is, in essence, a direction to a third
party to surrender information concerning taxpayers whose identity
is currently unknown to the IRS."
In re Tax Liabilities of John Does, 671 F.2d 977. 9,8
(CA6 1982).
[
Footnote 5]
Tiffany devotes considerable energy to arguing that "the
summonses were issued principally with respect to the tax
liabilities of Tiffany's clients." Brief for Petitioners 11. Under
our holding in this case, it is irrelevant whether this was the
IRS's primary or secondary purpose; all that matters is that the
IRS was pursuing a legitimate investigation of Tiffany. In any
event, "this Court has frequently noted its reluctance to disturb
findings of fact concurred in by two lower courts."
Rogers v.
Lodge, 458 U. S. 613,
458 U. S. 623
(1982).
See Blau v. Lehman, 368 U.
S. 403,
368 U. S.
408-409 (1962). On the record before us, we see no
reason to upset the finding below.
[
Footnote 6]
Amici First Western Government Securities and Samuels,
Kramer & Co. argue that the Reports refer to a case in which
the summoned party was itself under investigation. The summons
referred to in the example cited by
amici was issued
"to obtain the names of corporate shareholders involved in a
taxable reorganization which had been characterized by the
corporation (in a letter to its shareholders) as a nontaxable
transaction."
S.Rep. No. 94-938, p. 373 (1976); H.R.Rep. No. 94-658, p. 311
(1975). According to
amici, in such a case the corporation
itself must have been under investigation.
The Reports do not indicate, however, the name of the case. Nor
do they indicate whether the summons was issued to the corporation,
or whether the IRS was in fact interested in the corporate tax
liability.
Amici do not tell us to which actual case the
Reports referred. The Government, in contrast, states that the
example in question could have referred to only one reported case:
United States v. Armour, 376 F.
Supp. 318 (Conn.1974). In that case, the IRS issued summonses
to bank officials in order to learn the names of shareholders for
whom the bank held shares.
Given the scarcity of facts provided with the example, we simply
cannot tell whether a dual purpose summons was involved. Moreover,
even if we found a case that was consistent with
amici's
reading of the example, we would have no way of knowing whether
Congress was referring to that case rather than to
Armour.
We are therefore disinclined to place great weight on the argument
advanced by
amici.
[
Footnote 7]
We also find that it was well within the District Court's
discretion to conclude, after reviewing the submissions of the
parties and holding oral argument, that an evidentiary hearing on
the question of enforcement w as unnecessary.
See United States
v. Morgan Guaranty Trust Co., 57 F.2d 36, 42-43, n. 9 (CA2),
cert. denied sub nom. Keech v. United States, 439
U.S. 822 (1978). As we stated in
Donaldson v. United
States, 400 U. S. 517,
400 U. S. 527
(1971), "the burden of showing an abuse of the court's process is
on the taxpayer." Even if factually true, the central argument
raised by Tiffany before the District Court -- that the IRS's
primary, but not sole, interest was to investigate the licensees --
did not provide a basis for quashing the summonses.