United States v. Kristensen ( 2020 )

1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, No. 2:19-cv-2472 MCE DB 12 Plaintiff, FINDINGS AND RECOMMENDATIONS 13 v. 14 KENNETH KRISTENSEN and SUSAN KRISTENSEN, 15 16 Defendants. 17 18 On December 11, 2019, plaintiff filed a petition to enforce summonses of the Internal Revenue 19 Service (“I.R.S.”). (ECF No. 1.) On December 16, 2019, the undersigned issued an Order to Show 20 Cause as to why the summonses should not be enforced. (ECF No. 5.) A copy of that order, along with 21 the verified petition filed December 11, 2019, and its supporting documents was served on the 22 defendants on February 26, 2020. (ECF No. 9.) 23 The matter came before the undersigned for hearing on March 13, 2020, pursuant to the order to 24 show cause. (ECF No. 10.) Attorney Steven Tennyson appeared for plaintiff, along with Revenue 25 Officer Clifford Brown, Jr. Neither defendant filed a response to the Order to Show Cause or appeared 26 at the March 13, 2020 hearing.1 27 1 Attorney Tennyson stated that defendant Susan Kristensen had been in contact with attorney Tennyson 1 After review of the briefing and oral argument the undersigned makes the following findings and 2 recommendations. The Verified Petition to Enforce I.R.S. Summons filed December 11, 2019, seeks to 3 enforce administrative summonses issued on March 28, 2019. (ECF No. 1-1; ECF No. 1-2.) The 4 summonses are pursuant to an investigation to secure information related to federal tax liability or 5 collection of tax liability assessed for tax Form 1040 for the tax period ending December 31, 2016, and 6 for tax Form CIVPEN for the quarterly periods ending September 30, 2013, March 31, 2015, December 7 31, 2015, June 30, 2016, September 30, 2016, December 31, 2016, March 31, 2017, and June 30, 2017. 8 (ECF No. 1-1 at 2; ECF No. 1-2 at 2.) 9 Subject matter jurisdiction is invoked pursuant to 28 U.S.C. §§ 1340 and 1345 and is found to be 10 proper. 26 U.S.C. §§ 7402(b) and 7604(a) authorize the government to bring this action in this court. 11 The Order to Show Cause issued on December 16, 2019 shifted to defendants the burden of rebutting 12 any of the four requirements articulated in United States v. Powell, 379 U.S. 48, 57-58 (1964). 13 The undersigned has reviewed the petition and documents in support. Based on the 14 uncontroverted petition verified by Revenue Officer Brown, and the entire record, I make the following 15 findings: 16 1. The summonses (ECF No. 1-1; ECF No. 1-2) issued by Revenue Officer Clifford Brown, 17 Jr., issued on March 28, 2019, and served upon defendants that same day, seeking testimony and 18 production of documents and records in defendants’ possession was issued in good faith and for a 19 legitimate purpose under I.R.C. § 7602, that is, to secure information related to the tax liability or the 20 collection of the tax liability of tax Form 1040 for the tax period ending December 31, 2016, and for tax 21 Form CIVPEN for the quarterly periods ending September 30, 2013, March 31, 2015, December 31, 22 2015, June 30, 2016, September 30, 2016, December 31, 2016, March 31, 2017, and June 30, 2017. 23 2. The information sought is relevant to that purpose. 24 3. The information sought is not already in the possession of the Internal Revenue Service. 25 4. The administrative steps required by the Internal Revenue Code have been followed. 26 5. There is no evidence of referral of this case by the Internal Revenue Service to the 27 Department of Justice for criminal prosecution. 1 6. The verified petition and its exhibits made a prima facie showing of satisfaction of the 2 requirements of United States v. Powell, 379 U.S. 48, 57-58 (1964). 3 7. The burden shifted to defendants Kenneth Kristensen and Susan Kristensen to rebut that 4 prima facie showing. 5 8. Defendants have presented no argument or evidence to rebut the prima facie showing. 6 CONCLUSION 7 Accordingly, IT IS HEREBY RECOMMENDED that the I.R.S. summonses served upon 8 defendants Kenneth Kristensen and Susan Kristensen be enforced and that defendants be ordered to 9 appear at the I.R.S. offices at 4830 Business Center Drive, Ste 250, Fairfield, California, before Revenue 10 Officer Clifford Brown, Jr, or a designated representative, within 60 days of any order adopting these 11 findings and recommendations, then and there to be sworn, to give testimony, and to produce for 12 examining and copying the books, checks, records, papers and other data demanded by the summons, 13 the examination to continue from day to day until completed, unless compliance with the summonses is 14 fully achieved prior to that date and time. I further recommend that if it enforces the summonses, the 15 Court retain jurisdiction to enforce its order by its contempt power. 16 These findings and recommendations are submitted to the United States District Judge assigned 17 to the case, under 28 U.S.C. § 636(b)(1)(B) and (C) and Rule 304 of the Local Rules of the United States 18 District Court for the Eastern District of California. Within thirty (30) days after being served with these 19 findings and recommendations, any party may file written objections with the court and serve a copy on 20 all parties. Such a document should be titled “Objections to Magistrate Judge’s Findings and 21 Recommendations.” Any reply to the objections shall be served and filed within fourteen (14) days after 22 service of the objections. The District Judge will then review these findings and recommendations 23 pursuant to 28 U.S.C. § 636(b)(1). 24 //// 25 //// 26 //// 27 //// WAS VE TE OCOWINY LD UOT PIR eee PAY ST Tt 1 The parties are advised that failure to file objections within the specified time may waive the 2 || right to appeal the District Court’s order. Martinez v. Y1st, 951 F.2d 1153 (9th Cir. 1991). 3 || Dated: June 19, 2020 4 5 ORAH BARNES 6 UNITED STATES MAGISTRATE JUDGE 7 8 DLB:6 9 || DB/orders/orders.civil/USvkristensen2472.enfor.f&rs 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28