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U.S. Appeals Court Rules IRS Summons Not Enforceable

A U.S. appeals court has ruled the IRS cannot compel taxpayers to turn over personal and private property without a federal court order and that taxpayers can ignore the agencies summonses until actual enforcement action is taken.

In the case Schulz v. IRS, the Second Circuit Court of Appeals in Manhattan ruled:

... absent an effort to seek enforcement through a federal court, IRS summonses apply no force to taxpayers, and no consequence whatever can befall a taxpayer who refuses, ignores, or otherwise does not comply with an IRS summons until that summons is backed by a federal court order. … [A taxpayer] cannot be held in contempt, arrested, detained, or otherwise punished for refusing to comply with the original IRS summons, no matter the taxpayer's reasons, or lack of reasons for so refusing.

 

Bob Schulz, the plaintiff, is head of We the People, an organization that has taken separate legal action against the federal government for its failure to answer a "petition for redress of grievances" regarding the income tax. Though the court affirmed a lower court decision in favor of the IRS, saying Schulz's motion to quash an IRS summons lacked "subject matter," it used the ruling as a means to clarify the agency's power under 26 U.S.C. Section 7604.

The appeals court decision of Jan. 25 stated the federal courts protect taxpayers from an "overreaching" IRS and that the agency must go through the federal courts before force can be applied on anyone to turn over personal and private property to the IRS. Absent a federal court order, the IRS summons amounts simply to a "request," the court ruled, which can be ignored.

A statement on the group's website went on to say: "Without declaring provisions of the code unconstitutional on their face, the court, in effect, nullified key enforcement provisions of the Internal Revenue Code, stripping the IRS of much of its power to compel compliance with its administrative demands for personal and private property."

We the People claims the court decision will benefit the organization's class-action lawsuit against the IRS.

States the group: "The court has expressly recognized that the IRS, as has been asserted in the right-to-petition lawsuit, routinely violates people's due process rights in their day-to-day administrative practices. As such, the findings of the Second Circuit firmly establish for the District Court the substance of the causes of action put forth in our right-to-petition lawsuit."

Schulz's lawsuit stemmed from an IRS summons served on him in relation to an investigation. He claims the summons was a direct infringement on his First Amendment rights. (WorldNetDaily.com)

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