Viewtech Inc. v. United States

The IRS was not required to give notice of their summonsing a taxpayer and a company’s bank records, as the summons was issued to help the IRS collect the taxpayer’s debt.

Jung Kwak was assessed by the IRS for several million dollars in unpaid federal income taxes for the tax year ending on December 31, 2007. While trying to locate assets to satisfy this assessment, the IRS discovered Viewtech, Inc., a company in which Kwak had significant financial involvement. An IRS investigation showed that there were significant sums of money being paid to Kwak from Viewtech and to Viewtech from Kwak. After the IRS issued a summons to Wells Fargo, the bank where Viewtech maintained its account, Kwak and Viewtech filed a motion to quash the summons. The government filed a motion to dismiss the motion to quash under FRCP 12(b)(1), arguing that the district court lacked subject matter jurisdiction over the case since § 7609 did not give either Kwak or Viewtech standing to challenge the IRS’ summons. The district court, in agreement with the Government, granted the government’s motion to dismiss Kwak and Viewtech’s motion to quash the summons. Kwak and Viewtech appealed to the Ninth Circuit arguing the district court’s dismissal of their motion to quash was in error. The Ninth Circuit first noted that the applicable rule in this case is that “a third party should receive notice that the IRS has summonsed their records, unless the third party was the assessed taxpayer, or the assessed taxpayer had ‘some legal interest or title in the object of the summons.’” When applying the applicable rule to the case at hand, the Ninth Circuit determined that since the summons was issued in order to help the IRS collect Kwak’s tax deficiency, and since Kwak is the assessed taxpayer who had a significant interest in the Viewtech account, neither Kwak nor Viewtech was required to notice of the summons. AFFIRMED.