United States v. Clarke

A taxpayer has the right to challenge the Internal Revenue Service’s reasons for issuing a summons when that taxpayer offers credible evidence to support a plausible charge.

The Internal Revenue Service (IRS) investigated the tax returns for Respondents’ partnership and notified Respondents’ of deficiencies in its tax returns. The IRS then issued summonses to which Respondents failed to respond. The IRS therefore brought an enforcement action in District Court.

Respondents argued that the summonses failed to have an investigative purpose and that the IRS acted with various retaliatory motives. The District Court ordered the summonses be enforced, but the Eleventh Circuit reversed, holding that the District Court had abused its discretion.

The United States Supreme Court granted certiorari to determine whether a taxpayer has a right to challenge the IRS’s reasons for issuing a summons. The Court held that a taxpayer is entitled to an investigative examination when specific facts or circumstances would lead to the inference that a summons was issued in bad faith. The Court highlighted that the taxpayer must only offer credible evidence to support a charge.