NOTICE: This opinion is subject to
formal revision before publication in the United States
Reports. Readers are requested to notify the Reporter of
Decisions, Supreme Court of the United States, Washington,
D. C. 20543, email@example.com, of any typographical or
other formal errors.
SUPREME COURT OF THE UNITED STATES
HANNA KARCHO POLSELLI, et al.,
INTERNAL REVENUE SERVICE
on writ of certiorari to the united states
court of appeals for the sixth circuit
[May 18, 2023]
Chief Justice Roberts delivered the opinion of
For as long as Americans have had to pay taxes,
at least some have tried to avoid them. And for as long as
Americans have avoided taxes, the Internal Revenue Service and its
predecessors have tried to collect them. As an old joke goes:
“I believe we should all pay taxes with a smile. I tried but
they wanted cash.”
Congress has given the IRS considerable power to
go after unpaid taxes. One tool at the Service’s disposal is
the authority to summon people with information concerning a
delinquent taxpayer. But to safeguard privacy, the IRS is generally
required to provide notice to anyone named in a summons, who can
then sue to quash it. Today’s case concerns an exception to
that general rule.
To pursue unpaid taxes and the people who owe
them, “Congress has granted the Service broad latitude to
issue summonses.” United States
, 250 (2014). Among other things, the IRS may issue a
summons to “determin[e] the liability” of a taxpayer or
“any transferee or fiduciary” for unpaid taxes. 26
U. S. C. §7602(a). The IRS also may serve a summons
to “collec[t] any such liability.” Ibid.
summonses can extend to third parties beyond the taxpayer under
investigation. Tiffany Fine Arts, Inc.
, 469 U.S.
, 315–316 (1985). Accordingly, the IRS may request the
production of “books, papers, records, or other data”
from “any person” who possesses information concerning
a delinquent taxpayer. §7602(a)(2).
Given the breadth of this power, Congress has
imposed certain safeguards. The IRS must generally give
“notice of the summons” to “any
person . . . identified in the summons.”
§7609(a)(1). Anyone entitled to notice can bring a motion to
quash the summons. §7609(b)(2)(A). And the Internal Revenue
Code provides district courts with “jurisdiction to hear and
determine any proceeding” concerning a motion to quash,
§7609(h)(1), thereby waiving the sovereign immunity of the
United States, see FAA
, 566 U.S.
, 290 (2012).
There are, however, exceptions to the notice
requirement. As relevant, the IRS need not provide notice to a
person “who is identified in the summons,”
§7609(a)(1), if the summons is:
“issued in aid of the collection
“(i) an assessment made or judgment
rendered against the person with respect to whose liability the
summons is issued; or
“(ii) the liability at law or in equity of
any transferee or fiduciary of any person referred to in clause
In other words, the IRS may issue summonses both
to determine whether a taxpayer owes money and later to collect any
outstanding liability. When the IRS conducts an investigation for
the purpose of “determining the liability” of a
taxpayer, §7602(a), it must provide notice, §7609(a)(1).
But once the Service has reached the stage of “collecting any
such liability,” §7602(a)—which is a distinct
activity—notice may not be required, §7609(c)(2)(D).
For multiple years between 2005 and 2017, Remo
Polselli underpaid his federal taxes. App. to Pet. for Cert.
65a–66a. After investigating, the IRS determined that Mr.
Polselli was liable for the unpaid amounts and other penalties, and
entered official assessments against him totaling more than $2
, at 66a. Revenue Officer Michael Bryant then
set out to collect the money, and he developed a few leads in his
search for assets that Mr. Polselli may have been concealing.
Bryant focused on bank accounts belonging to Mr. Polselli’s
wife, petitioner Hanna Karcho Polselli. Ibid
. Bryant also
knew that Mr. Polselli had paid nearly $300,000 toward part of his
outstanding tax liability from an account owned by Dolce Hotel
Management, LLC, and surmised that Mr. Polselli might have control
over funds belonging to that company. Id.
, at 67a. To
further his investigation, Bryant issued a summons under §7602
to the law firm Abraham & Rose, PLC, where Mr. Polselli had
long been a client. Ibid.
But the firm produced no records
in response, stating that it “did not retain any of the
documents requested.” Ibid.
Bryant then issued several additional summonses
seeking records concerning Mr. Polselli. Bryant issued one summons
to Wells Fargo, requesting the financial records of both Mrs.
Polselli and Dolce Hotel Management. Id.
, at 70a–71a.
He also issued summonses to JP Morgan Chase and Bank of America,
seeking among other things “[c]opies of all bank
statements” relating to Mr. Polselli and petitioners Jerry R.
Abraham, P. C., and Abraham & Rose, PLC. Id.
78a–79a, 85a–86a. Bryant did not provide notice to any
of the third parties named in the three summonses. But the banks
did, and Mrs. Polselli, Jerry R. Abraham, and Abraham & Rose
filed motions to quash in Federal District Court.
The District Court dismissed the case for lack
of subject-matter jurisdiction, reasoning that the IRS did not need
to provide notice. Polselli
v. United States
, 2020 WL
12688176, *4 (ED Mich., Nov. 16, 2020). The District Court credited
Bryant’s assertions that “the purpose of his
investigation [was] to locate assets to satisfy Mr.
Polselli’s existing assessed federal tax liability and that
the IRS issued the summonses in question to aid in the collection
of these assessed liabilities.” Ibid.
Because the Code
excluded petitioners from the required notice, there was no waiver
of sovereign immunity, and the District Court therefore lacked
jurisdiction to entertain the motions to quash. Id.
The Sixth Circuit affirmed in a divided opinion,
reasoning that no notice was required because “the summonses
at issue fall squarely within the exception listed in
v. Department of
, 23 F. 4th 616, 623 (2022). Before the Sixth
Circuit, petitioners had argued in favor of a rule—previously
adopted by the Ninth Circuit—requiring that a taxpayer have
“some legal interest or title in the object of the
summons” for the notice exception to apply. Ip
205 F.3d 1168
, 1175 (2000). To decide whether a taxpayer
maintains a sufficient legal interest “in the object of the
summons,” the Ninth Circuit considers “whether there
was an employment, agency, or ownership relationship between the
taxpayer and third party.” Viewtech, Inc.
, 653 F.3d 1102, 1106 (2011). But the Sixth Circuit below
rejected the Ninth Circuit’s legal interest test, concluding
that it was contrary to the plain language of
§7609(c)(2)(D)(i). 23 F. 4th, at 625. The panel below
instead held that “as long as the third-party summons is
issued to aid in the collection of any assessed tax liability the
notice exception applies.” Id.
, at 624 (internal
quotation marks omitted). In so concluding, the Sixth Circuit
aligned itself with both the Seventh and Tenth Circuits. See
v. United States
, 149 F.3d 1190 (CA10 1998)
v. United States
199 F.3d 386
(CA7 1999) (per curiam
Judge Kethledge dissented. He acknowledged that
an ordinary reading of the statute exempted the summonses from
notice but thought the statutory context compelled a narrower
construction. As an initial matter, Judge Kethledge expressed
concern that the panel’s reading of the notice exception
risked “a significant intrusion upon the privacy of
. . . account holders.” 23 F. 4th, at 631. He
argued that an ordinary reading of the first exception to notice
would render the second exception—codified in
To avoid that, Judge Kethledge would have narrowed the
first exception by adopting the legal interest test from the Ninth
Circuit. We granted certiorari to resolve the division among the
Circuits. 598 U. S. ___ (2022).
The question presented is whether the
exception to the notice requirement in §7609(c)(2)(D)(i)
applies only where a delinquent taxpayer has a legal interest in
accounts or records summoned by the IRS under §7602(a). A
straightforward reading of the statutory text supplies a ready
answer: The notice exception does not contain such a
The statute sets forth three conditions to
exempt the IRS from providing notice in circumstances like these.
First, a summons must be “issued in aid
of . . . collection.”
§7609(c)(2)(D). Second, it must aid the collection of
“an assessment made or judgment rendered.”
§7609(c)(2)(D)(i). By “assessment,” the Code
“refers to the official recording of a taxpayer’s
liability.” Direct Marketing Assn.
575 U.S. 1, 9 (2015); see also Hibbs
, 100 (2004). Section 7609(c)(2)(D)(i) does not excuse
notice, therefore, until the IRS makes an official assessment or a
judgment has been rendered with respect to a taxpayer’s
liability. Third, a summons must aid the collection of assessments
or judgments “against the person with respect to whose
liability the summons is issued.” §7609(c)(2)(D)(i).
This requirement links the subject of the assessment or judgment
with the subject of the collection effort—they must concern
the same delinquent taxpayer. None of the three components for
excusing notice in §7609(c)(2)(D)(i) mentions a
taxpayer’s legal interest in records sought by the IRS, much
less requires that a taxpayer maintain such an interest for the
exception to apply.
Had Congress wanted to include a legal interest
requirement, it certainly knew how to do so. The very next
provision—also enacted as part of the Tax Reform Act of
1976—requires the IRS to “establish the rates and
conditions” for reimbursing costs “incurred in
searching for, reproducing, or transporting” information
sought by a summons. §7610(a)(2); see 90Stat. 1702. But the
IRS may not provide reimbursement if “the person with respect
to whose liability the summons is issued has a proprietary interest
in” the records “to be produced.”
§7610(b)(1). We assume that Congress “acts intentionally
and purposely” when it “includes particular language in
one section of a statute but omits it in another section of the
same Act.” Sebelius
, 569 U.S.
, 378 (2013) (internal quotation marks omitted). The fact
that the exception to the reimbursement provision expressly turns
on a taxpayer’s “proprietary interest” in records
summoned by the IRS strongly suggests that Congress deliberately
omitted a similar requirement with respect to the notice exception
in §7609(c)(2)(D)(i). And here the provision in question is
not just in the “same Act”—it is in the adjacent
section, having been enacted in the same Public Law.
Petitioners advance two primary arguments in
support of their proposed legal interest test, neither of which
convinces us to abandon an ordinary reading of the notice
First, petitioners adopt a narrow definition of
“in aid of the collection.” In their view, the phrase
refers only to inquiries that “directly advance” the
IRS’s collection efforts. Brief for Petitioners 21. A summons
will not directly advance those efforts, they contend, unless it is
targeted at an account containing assets that the IRS can collect
to satisfy the taxpayer’s liability. And, petitioners say,
the only way that a summons issued to a third party will produce
collectible assets is if the delinquent taxpayer has a legal
interest in the targeted account.
This argument does not give a fair reading to
the phrase “in aid of the collection.” According to
petitioners, the phrase requires that a summons produce collectible
assets. But to “aid” means “[t]o help” or
“assist.” American Heritage Dictionary 26 (1969).
Petitioners agree. See Brief for Petitioners 21 (“aid”
means to “support,” “help,” or
“assist”). Even if a summons may not itself reveal
taxpayer assets that can be collected, it may nonetheless help the
IRS find such assets.
Consider this case. The IRS’s
investigation “suggest[ed] that Mr. Polselli often uses other
entities to shield assets from the Internal Revenue Service.”
App. to Pet. for Cert. 68a. Bryant suspected, for instance, that
Mr. Polselli was using Dolce Hotel Management as an alter ego, and
also that he might have access to and use of Mrs. Polselli’s
bank accounts. Based on those leads, Bryant initially requested
that Abraham & Rose produce “cancelled checks, wire
transfer/credit documents, and all other instruments used by Mr.
Polselli to pay the firm.” Id.
, at 67a. Whether Mr.
Polselli maintains a “legal interest” in those
records—a confounding question, see Viewtech
F. 3d, at 1106—is neither here nor there. The IRS could
not, of course, use records of canceled checks and the like to
satisfy Mr. Polselli’s tax deficiency. But if those records
showed that money from Dolce Hotel Management was used to pay Mr.
Polselli’s account at Abraham & Rose, or to pay others
through Abraham & Rose, that could aid in collecting funds from
Dolce Hotel Management to help pay Mr. Polselli’s debt to the
IRS. Or the Service could use those records to try to identify
other alter egos—besides Dolce Hotel Management—where
Mr. Polselli might have hidden assets.
By the same token, the summonses Bryant issued
to the three banks sought records to “identify
. . . entities whose funds Mr. Polselli has control over
without formal ownership” and “bank accounts associated
with such entities.” App. to Pet. for Cert. 68a. As with the
request Bryant issued to Abraham & Rose, even if the three bank
summonses did not reveal bank accounts in which Mr. Polselli has a
legal interest, they could lead to assets parked elsewhere that the
IRS could collect to satisfy his $2 million liability.
IRS investigations are much like any other: A
detective might order forensic testing or speak to witnesses to
help identify a culprit, even if those activities are
unlikely—in and of themselves—to solve the crime.
Similarly, documents in the accounts belonging to Mrs. Polselli or
Dolce Hotel Management may be a step in a paper trail leading to
assets owned by Mr. Polselli. Everyday tasks illustrate the same
point: A recipe might help a chef shop for needed groceries, even
though more steps are required before dinner will be ready. By
conflating activities that help advance a goal with activities sure
to accomplish it, petitioners ignore the typical meaning of
“in aid of.”
Petitioners next argue that the exception
provided in clause (i) must be read narrowly so as to avoid making
entirely superfluous the exception found in clause (ii). Clause (i)
excuses notice when the IRS issues a summons “in aid of the
collection of . . . an assessment made or judgment
rendered against” the delinquent taxpayer.
§7609(c)(2)(D)(i). Clause (ii) exempts from notice any summons
“issued in aid of the collection of . . . the
liability at law or in equity of any transferee or fiduciary of any
person referred to in clause (i).” §7609(c)(2)(D)(ii).
We ordinarily aim to “giv[e] effect to every clause and word
of a statute.” Microsoft Corp.
v. i4i L. P.
, 106 (2011) (internal quotation marks omitted). If clause
(i) already exempts from notice every summons that helps the IRS
collect an “assessment” against a delinquent taxpayer,
petitioners argue, there would be no work left for clause (ii) to
do. Adding a “legal interest” requirement, on the other
hand, would cabin the scope of clause (i), leaving some purpose for
But this argument overlooks two differences
between clause (i) and clause (ii). First, clause (i) is applicable
upon an assessment
, while clause (ii) is applicable upon a
finding of liability
. Under the Code, a taxpayer’s
“liability” for unpaid taxes arises before the IRS
makes an official “assessment” of what the delinquent
taxpayer owes. See §6203 (“The assessment shall be made
by recording the liability of the taxpayer
. . . .”); see also United States
, 541 U.S.
, 122 (2004) (assessment refers to “the calculation or
recording of a tax liability”). Although an assessment may
“trigge[r] levy and collection efforts,” Hibbs
542 U. S., at 101, the Code does not require in all cases that
the IRS make a formal assessment before attempting to collect an
outstanding tax liability. See §§6501(c)(1)–(3)
(authorizing the IRS to bring “a proceeding in court for
collection of [a] tax . . . without assessment” in
situations involving false returns, willful attempts to evade
taxes, and failures to file a return).
Second, petitioners’ argument overlooks
that clause (i) and clause (ii) are addressed to different
entities. Clause (i) concerns assessments or judgments against a
—“the person with respect to whose
liability the summons is issued.” §7609(c)(2)(D)(i).
Clause (ii), in contrast, concerns the liability of a
“transferee or fiduciary.” §7609(c)(2)(D)(ii).
That the notice exception distinguishes between taxpayers and their
fiduciaries or transferees should come as no surprise. The Code
elsewhere separately empowers the IRS to collect outstanding tax
liabilities from taxpayers, on the one hand, and from transferees
or fiduciaries, on the other. See §6901. The Code also
differentiates between taxpayers and their fiduciaries or
transferees in empowering the IRS to issue summonses in the first
place. See §7602(a).
These distinctions—between liability and
assessment or judgment, and between taxpayers and their transferees
or fiduciaries—are not just academic. They show that the
second notice exception found in clause (ii) applies in situations
where clause (i) may not. To dispense with notice, clause (i)
requires that there be “an assessment made or judgment
rendered against the person with respect to whose liability the
summons is issued.” §7609(c)(2)(D)(i). By contrast,
clause (ii) does not impose the same conditions. It instead
authorizes the IRS to issue a summons in aid of collecting a
“liability at law or in equity,” and refers
specifically to the liability of any “transferee or
fiduciary” of the delinquent taxpayer.
§7609(c)(2)(D)(ii). As a result, clause (ii) permits the IRS
to issue unnoticed summonses to aid its collection from transferees
or fiduciaries before
it makes an “official recording
of a taxpayer’s liability.” Direct Marketing
, 575 U. S., at 9. “That may not be very heavy
work for the phrase to perform, but a job is a job, and enough to
bar the rule against redundancy from disqualifying an otherwise
sensible reading.” Gutierrez
, 528 U.S.
, 258 (2000); see also Nielson
U. S. ___, ___ (2019) (slip op., at 21) (a clause that
“still has work to do” is not superfluous).
Clause (ii) addresses an additional potential
problem as well. Delinquent taxpayers sometimes declare bankruptcy
or otherwise discharge debt. When they do so, the Government may
not be able to collect “an assessment made or judgment
rendered against the” taxpayer. §7609(c)(2)(D)(i). In
those situations, clause (i) may not apply, for a summons cannot be
“issued in aid of ” an impossible collection
effort. §7609(c)(2)(D). But clause (ii) may nevertheless
permit the IRS to issue unnoticed summonses to collect the
“liability” of the taxpayer’s transferee or
Petitioners also emphasize the privacy
concerns that led Congress to enact the notice requirement in the
first place. They highlight that “Congress enacted §7609
in response to two decisions in which we gave a broad construction
to the IRS’s general summons power.” Tiffany Fine
, 469 U. S., at 314. In Donaldson
, 400 U.S.
(1971), we considered whether the employee of a company to
which the IRS had issued a summons could intervene to prevent his
employer’s compliance with the Service’s request.
, at 527. We concluded that the employee had no right to
do so. Id.
, at 530. And in United States
, 420 U.S.
(1975), we approved an IRS summons issued to a bank
“for the purpose of identifying an unnamed individual who had
deposited a large amount of money in severely deteriorated
bills,” concluding that the IRS had not abused its authority.
Tiffany Fine Arts
, 469 U. S., at 315 (characterizing
explain why Congress enacted §7609, which establishes a
baseline rule requiring the IRS to provide notice and which
authorizes anyone entitled to notice to move to quash a summons.
§7609(a). But neither case obliges us to read the notice
exception in §7609(c)(2)(D)(i) more narrowly than its terms
provide. We think the history highlighted by petitioners supports a
contrary conclusion. That Congress proved acutely aware of our
prior decisions supports a plain reading not only of the general
notice requirement, but also of the specific exception the statute
We do not dismiss any apprehension about the
scope of the IRS’s authority to issue summonses. As we have
said, “the authority vested in tax collectors may be abused,
as all power is subject to abuse.” Bisceglia
U. S., at 146. Tax investigations often involve the pursuit of
sensitive records. In this case, for instance, the IRS sought
information from law firms concerning client accounts. And even the
Government concedes that the phrase “in aid of the
collection” is not “limitless.” Tr. of Oral Arg.
33. The Government proposes a test turning on reasonableness: So
long as a summons is “reasonably calculated to assisting in
collection,” it can fairly be characterized as being issued
“in aid of ” that collection. Id.
, at 26;
see also id.
, at 36 (“[T]he third party should have
some financial ties or ha[ve] engaged in financial transactions
with the delinquent taxpayer.”).
This is not, however, the case to try to define
the precise bounds of the phrase “in aid of the
collection.” The parties did not argue, and the panel below
did not decide, the contours of that phrase. See Illinois
, 462 U.S.
, 222–223 (1983). In addition, both the briefing by
the parties and the question presented focus only on whether the
exception provided in §7609(c)(2)(D)(i) requires that a
taxpayer maintain a legal interest in records summoned by the IRS.
For the reasons we have given, the answer is no.
The judgment of the Court of Appeals for the
Sixth Circuit is affirmed.
It is so ordered.