here - Fuerst Ittleman David & Joseph, PL

Case 3:10-mc-00024-GEB Case: 11-1612 Document: -DEA Document 003110561288 25 Filed Page: 01/07/11 65 Date Page Filed: 12 06/13/2011
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not Mr. Gangi was a bona fide resident of the Virgin Islands. Such records are irrelevant,
Petitioners argue, because modern technology permits individuals to maintain bank accounts and
authorize transactions remotely from anywhere around the world. This Court disagrees.
Because of the permissive language in IRC § 7602(a), the relevancy threshold under
Powell is not demanding. See IRC § 7602(a)(1) (authorizing the Government to “examine any
books, papers, records, or other data which may be relevant or material to [tax collections
inquiries]” (emphasis added)). Indeed, the Third Circuit has recognized that IRC § 7602(a) sets a
“rather liberal standard of relevance” that permits the Government to obtain “information that has
only ‘potential relevance’ to the investigation.” Rockwell, 897 F.2d at 1263 (quoting United
States v. Arthur Young & Co., 465 U.S. 805, 814 (1984)). Although the Court recognizes the
conveniences of modern technology, the Court cannot categorically say that bank records have no
relevance to a consideration of residency. See accord Twin Palms, Civ. No. 09-61062,
unpublished order in Chambers, at 9; cf. Vazquez v. C.I.R., T.C. Memo. 1993-368, 1993 WL
315404, at *4 (T.C. Aug. 19, 1993) (considering taxpayer’s Puerto Rican bank account, in
determining that he was a bona fide resident of Puerto Rico for tax purposes).
5. Non-Compliance With IRC § 7602(c)’s Advance Notice Requirement
Finally, Petitioners object that the R&R summarily rejected their position with regard to
the fourth prong of the Powell test, compliance with applicable administrative procedures under
the IRC. Petitioners contend that the administrative summonses themselves revealed that the IRS
failed to give the advance notice required by IRC § 7602(c), and that Magistrate Judge Arpert
improperly relied on the declaration of Agent Moss, which stated that the IRS had complied with
all applicable administrative procedures under the IRC during this investigation. (See Moss
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