United States v. Crum, Ellis ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 01-3750 & 01-3751
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
ELLIS J. CRUM and NORMA N. CRUM,
Defendants-Appellants.
Appeals from the United States District Court
for the Northern District of Indiana, Fort Wayne Division.
Nos. 1:00cv446 & 1:00cv447--William C. Lee, Chief Judge.
Argued February 26, 2002--Decided May 3, 2002
Before FAIRCHILD, COFFEY, and KANNE,
Circuit Judges.
FAIRCHILD, Circuit Judge. Ellis and
Norma Crum challenge a district court’s
order enforcing two summonses that an
Internal Revenue Service revenue officer
had issued to them. The Crums contend in
substance that the applicable statutes
and regulations do not authorize
delegation of summons authority to
revenue officers of the IRS, which they
argue is part of the "Department of the
Treasury" (not of the "Treasury
Department"), and thus the district court
did not have jurisdiction to enforce the
summonses issued by the revenue officer
in this case. We affirm.
Ellis Crum owes federal income taxes for
1991, 1992, and 1993, and his wife Norma
owes taxes for 1993. In 1994 the Crums
created separate, co-managed trusts in
which they placed their primary
residence, their rental property, and
their music business. The IRS assigned
Revenue Officer John Dietrich to
investigate possible administrative
orjudicial collection against the trusts.
Pursuant to 26 U.S.C. sec. 7602, Dietrich
served summonses on the Crums to testify
and produce financial records relating to
their tax liabilities. When the Crums
refused to produce any of the records and
failed to appear at the time and place
designated in the summonses, the United
States filed petitions to enforce the
summonses. After consolidating both
cases, the court granted the petitions
and subsequently denied the Crums’ joint
motion for postjudgment relief. The Crums
appeal only from the latter order.
The Crums argue that the district court
lacked jurisdiction to enforce the
summonses in this case. The Crums
acknowledge that sec. 7602(a) vests
summons authority in the "Secretary,"
which sec. 7701(a)(11)(B) defines as "the
Secretary of the Treasury or his
delegate." The term "delegate" is defined
further in sec. 7701(a)(12)(A)(i) to
include "any officer, employee, or agency
of the Treasury Department duly
authorized by the Secretary of the
Treasury." The Crums rely on the absence
of statutory provisions expressly
authorizing delegation to IRS employees
or expressly locating the IRS in the
"Treasury Department." They suggest that
employees of the IRS are members of a
body called the "Department of the
Treasury," which, they say, Congress
intended to be distinct from the
"Treasury Department."
Congress has established a statutory
structure that endows the IRS with
extensive authority to conduct effective
tax investigations. For instance, 26
U.S.C. sec. 7601 gives the IRS
Commissioner, as the Secretary’s
delegate, "a broad mandate to investigate
and audit" persons to ensure compliance
with federal tax laws. United States v.
Bisceglia, 420 U.S. 141, 145 (1975). As a
necessary incident to this investigatory
power, Congress gave the Commissioner
expansive authority in sec. 7602(a) to
summon any person to provide information
relevant to a particular tax inquiry.
Indeed, the Supreme Court has described
sec. 7602 as the "centerpiece" of a much
larger congressional design to expand the
IRS’s information-gathering authority in
order to facilitate tax investigations.
United States v. Arthur Young & Co., 465
U.S. 805, 816 (1984). Under 26 U.S.C.
sec.sec.7402(b) and 7604(b), district
courts have jurisdiction to enforce an
administrative summons in an adversarial
proceeding commenced by the filing of a
petition. See Donaldson v. United States,
400 U.S. 517, 523-25 (1971).
Federal regulations trace the delegation
of summons authority. First, the
Secretary of the Treasury has delegated
summons authority to the Commissioner of
the IRS. 26 C.F.R. sec. 301.7602-1(b); 26
C.F.R. sec. 301.7701-9(b); Treas. Dep’t
Order No. 150-10 (Apr. 22, 1982). As
authorized by the Secretary, the IRS
Commissioner has redelegated this
authority to certain IRS employees,
including revenue officers such as
Officer Dietrich. 26 C.F.R. sec.
301.7701-9(c); 26 C.F.R. sec. 301.7701-
9(b); IRS Delegation Order No. 4 (Rev.
22) para.para. 7 & 8. Courts consistently
have recognized that IRS officers have
the delegated authority to issue
administrative summonses. See, e.g.,
Arthur Young & Co., 465 U.S. at 814 ("As
a tool of discovery, the sec. 7602
summons is critical to the investigative
and enforcement functions of the IRS . .
. ."); United States v. Ins. Consultants
of Knox, Inc., 187 F.3d 755, 759 (7th
Cir. 1999) (observing that "[t]he IRS is
authorized to issue summonses" pursuant
to sec. 7602); Miller v. United States,
150 F.3d 770, 772 (7th Cir. 1998) (noting
that the IRS’s power to issue summonses
under sec. 7602 is "broad"); United
States v. Derr, 968 F.2d 943, 946-47 (9th
Cir. 1992) (rejecting argument that IRS
District Examination revenue agent did
not have delegated authority to issue
summonses); United States v. Saunders,
951 F.2d 1065, 1067 (9th Cir. 1991)
(rejecting argument that IRS revenue
officer lacked delegated authority).
Officer Dietrich had authority to issue
the summonses.
The Crums rely on an alleged distinction
between the "Treasury Department" and the
"Department of the Treasury." They assert
that the "Treasury Department" and the
"Department of the Treasury" are
"distinct statutory entities, each with a
separate identity, history, stature,
location, composition, function, and
authority"; that Officer Dietrich is a
revenue officer who works for the
Department of the Treasury but not the
Treasury Department; and that no statute
authorizes delegation of summons
authority to revenue officers of the
Department of the Treasury. In an attempt
to prove that the IRS is part of the
"Department of the Treasury" (delegation
to officers of which has not been
authorized) and not the "Treasury
Department" (to officers of which summons
authority can be delegated), the Crums
rely on isolated references in the
Internal Revenue Code suggesting that IRS
officers belong to and perform functions
for the Department of the Treasury.
This semantic argument strains
credulity. It is true that there are
Congressional enactments which refer to a
"Department of the Treasury" and others
which refer to a "Treasury Department."
But we are not persuaded that Congress
intended to create separate departments
concerning the Treasury, nor does any
purpose in doing so appear. To the
contrary, there is only one department
and it is referred to by different names.
The executive departments are listed at 5
U.S.C. sec. 101, and that list includes
only the "Department of the Treasury." 31
U.S.C. sec. 301 introduces a subchapter
dealing with the organization of the
"Department of the Treasury." Subsection
(a) says that the Department of the
Treasury is an executive department, and
(b) says that it is headed by the
Secretary of the Treasury.
That an agency’s name takes two forms is
hardly remarkable. See Neal v. Honeywell
Inc., 33 F.3d 860, 863 (7th Cir. 1994)
("a statute’s context (both linguistic
and historical) may show that different
verbal formulations have the same
meaning"); W. Fuels-Utah, Inc. v. Fed.
Mine Safety & Health Review Comm’n, 870
F.2d 711, 715 (D.C. Cir. 1989)
("Congress’s interchangeable use of the
two phrases . . . is further evidence, if
any is necessary, that Congress did not
intend for any distinction with
substantive consequences to depend upon
the linguistic variations upon which the
parties here focus."). Treasury’s own
website deploys both forms
interchangeably, at http//www.treas.gov,
as do the courts, see, e.g., Robbins v.
Bentsen, 41 F.3d 1195, 1196, 1197 (7th
Cir. 1994); United States v. Gimbel, 830
F.2d 621, 623, 625 (7th Cir. 1987). It is
interesting to note that there are style
guides which confirm that these phrases
are different forms of one name. The New
York Times style manual, for instance,
advises that "[f]or most federal
departments, the briefer form State
Department is preferred to Department of
State." The New York Times Manual of
Style and Usage 105 (1999); see also The
Associated Press Stylebook and Briefing
on Media Law 71 (2000) ("The of may be
dropped and the title flopped while
capitalization is retained: the State
Department."). We conclude that there is
no merit to the Crums’ position.
The district court’s judgment is
AFFIRMED.