here - Fuerst Ittleman David & Joseph, PL
here - Fuerst Ittleman David & Joseph, PL 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 66 Date Page Filed: 13 06/13/2011 of 17 PageID: 477 Decl. 13.) By Letter Orders of October 5th and 28th, the Court permitted limited discovery and supplemental briefing regarding the Government’s compliance with IRC § 7602(c), and the parties timely filed responsive submissions. Petitioner Frank Gangi filed an affidavit attesting to the following facts: (i) that he was the sole owner of Petitioners BABP VI, LLC (“BABP”) and Ferrous Miner Holdings, Ltd. (“Ferrous Miner”); (ii) that the Law Office of Marjorie Roberts, P.C. (the registered agent of BABP) received correspondence from Agent Moss on or about February 2, 2010, which contained IRS Form 4564, Publication 1, and Publication 3498; (iii) that the February 2, 2010 correspondence was the first correspondence he received that indicated that BABP was under examination by the IRS; (iv) that he received similar correspondence from Agent Moss with respect to the IRS’s investigation of Ferrous Miner on or about February 3, 2010; and (v) that the February 3 correspondence was the first correspondence he received that indicated that Ferrous Miner was under investigation by the IRS. (Gangi. Aff.) The Government responded with the Declaration of IRS Agent William Everett, whose review of IRS records revealed that the IRS sent a Letter 3164 to Mr. Gangi on December 19, 2005, that advised him that the IRS may contact third parties in connection with its investigation of his federal tax liabilities. (Everett Decl. & Ex. 102 (Letter of December 19, 2005, Form 3164.) The Government argues that this advance notice to Mr. Gangi satisfies IRC § 7602, and that the subsequent notice to BABP and Ferrous Miner was sufficient under IRC § 7609(a)(1), which permits contemporaneous notice, within three days, to “any person (other than the person summoned) who is identified in the summons.” (Doc. No. 21, Gov’t Supp. Br. at 2.) Given the opportunity to reply, Petitioners did not deny that Mr. Gangi received advance notice of third-party contact, but respond that IRC 13 A-000021
Case 3:10-mc-00024-GEB Case: 11-1612 Document: -DEA Document 003110561288 25 Filed Page: 01/07/11 67 Date Page Filed: 14 06/13/2011 of 17 PageID: 478 § 7602(c) required advance notice to BABP and Ferrous Miner as well, because the IRS summonses sought documents concerning these entities too. IRC § 7602(c) provides in pertinent part: An officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer with respect to the determination or collection of the tax liability of such taxpayer without providing reasonable notice in advance to the taxpayer that contacts with persons other than the taxpayer may be made. The Government has provided competent evidence, and Petitioners do not dispute, that the IRS gave advance notice to Mr. Gangi prior to contacting third parties “with respect to the determination or collection of the tax liability of such taxpayer.” Thus, IRC § 7602(c) does not preclude enforcement of the summonses as against Mr. Gangi. However, because the summonses also sought documents concerning Mr. Gangi’s wholly-owned businesses BABP and Ferrous Miner, the question remains whether IRC § 7602(c) required the IRS to provide separate advance notice to Petitioners BABP and Ferrous Miner prior to contacting third parties. The Government argues that advance notice was not required, but rather that 2 contemporaneous notice under IRC § 7609 sufficed, because BABP and Ferrous Miner were not the “taxpayers” under investigation, as reflected by the caption on the summons, which indicated that the summonses were issued “In the matter of United States Income Tax Liability of Frank Gangi.” This response is not entirely satisfactory, because, as Petitioners note, BABP and Ferrous Miner both received notices contemporaneous with the first, CitiBank summons 2 IRC § 7609 permits contemporaneous notice (within three days of service of summons, so long as the date of service is not more than 23 days before the date of production) to “any person” who “is identified in the summons,” if the summons requires the submission of evidence relating to that person. 14 A-000022
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Case 3:10-mc-00024-GEB Case: 11-1612 Document: -DEA Document 003110561288 25 Filed Page: 01/07/11 66 Date Page Filed: 13 06/13/2011<br />
of 17 PageID: 477<br />
Decl. 13.) By Letter Orders of October 5th and 28th, the Court permitted limited discovery and<br />
supplemental briefing regarding the Government’s compliance with IRC § 7602(c), and the<br />
parties timely filed responsive submissions.<br />
Petitioner Frank Gangi filed an affidavit attesting to the following facts: (i) that he was<br />
the sole owner of Petitioners BABP VI, LLC (“BABP”) and Ferrous Miner Holdings, Ltd.<br />
(“Ferrous Miner”); (ii) that the Law Office of Marjorie Roberts, P.C. (the registered agent of<br />
BABP) received correspondence from Agent Moss on or about February 2, 2010, which<br />
contained IRS Form 4564, Publication 1, and Publication 3498; (iii) that the February 2, 2010<br />
correspondence was the first correspondence he received that indicated that BABP was under<br />
examination by the IRS; (iv) that he received similar correspondence from Agent Moss with<br />
respect to the IRS’s investigation of Ferrous Miner on or about February 3, 2010; and (v) that the<br />
February 3 correspondence was the first correspondence he received that indicated that Ferrous<br />
Miner was under investigation by the IRS. (Gangi. Aff.) The Government responded with the<br />
Declaration of IRS Agent William Everett, whose review of IRS records revealed that the IRS<br />
sent a Letter 3164 to Mr. Gangi on December 19, 2005, that advised him that the IRS may<br />
contact third parties in connection with its investigation of his federal tax liabilities. (Everett<br />
Decl. & Ex. 102 (Letter of December 19, 2005, Form 3164.) The Government argues that this<br />
advance notice to Mr. Gangi satisfies IRC § 7602, and that the subsequent notice to BABP and<br />
Ferrous Miner was sufficient under IRC § 7609(a)(1), which permits contemporaneous notice,<br />
within three days, to “any person (other than the person summoned) who is identified in the<br />
summons.” (Doc. No. 21, Gov’t Supp. Br. at 2.) Given the opportunity to reply, Petitioners did<br />
not deny that Mr. Gangi received advance notice of third-party contact, but respond that IRC<br />
13<br />
A-000021
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