In a brief filed with the U.S. Supreme Court on March 17 and scheduled for a hearing April 23, Michael Clarke and his partners in Dynamo Holdings, LP argued that they are entitled to a limited evidentiary hearing to show that summonses were issued improperly by the IRS as retribution for their refusal to extend a statute of limitations.
The Eleventh Circuit earlier ruled in Clarke’s favor, and the IRS appealed to the Supreme Court.
In his brief, Clarke argued that “Under United States v. Powell, 379 U.S. 48 (1964), an individual or entity that receives an IRS summons is entitled to the opportunity to show, at an adversary hearing, that the summons should be quashed because judicial enforcement of the summons would constitute an abuse of the court’s processes—including, for example, if the summons was issued by the IRS for an improper purpose.”
The government argued in its brief that the Eleventh Circuit decision “erroneously reduced to zero the amount of evidence that is required” to rebut the IRS showing of good faith.
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