Moseley contends that the IRS has failed to make a prima facie showing of good faith because the documents being sought in the October 7, 1992 summons are the same documents which he turned over and which were copied by the IRS. Moseley claims that the IRS already has in its possession the information it is seeking.
The IRS position now is that, although some documents were voluntarily produced, it does not believe that all of MCI's records were turned over. The IRS also contends that it is entitled to receive all of the original documents again, even if it once had some of them incident to Moseley's voluntary production prior to the October 7, 1992 summons.
"The 'already possessed' principle enunciated by Powell. . . [is] a gloss on § 7605(b)'s prohibition of 'unnecessary' summonses, rather than an absolute prohibition against the enforcement of any summons to the extent that it requests the production of information already in the possession of the IRS." United States v. Davis, 636 F.2d 1028, 1037 (5th Cir.), cert. denied, 454 U.S. 862, 70 L. Ed. 2d 162, 102 S. Ct. 320 (1981). It is to be narrowly construed. For example, documents which are in the physical possession of the IRS but "incapable of practical retrieval" are deemed to not be "already possessed" for purposes of the Powell test. United States v. Linsteadt, 724 F.2d 480, 483-84 (5th Cir. 1984).
In United States v. First Nat'l Bank of N.J., 616 F.2d 668, 673-74 (3d Cir.), cert. denied sub nom. Levey v. United States, 447 U.S. 905, 64 L. Ed. 2d 854, 100 S. Ct. 2987 (1980), the taxpayer refused to comply with an IRS request to produce retained copies of forms 1099 and 1087.
The taxpayer argued that copies of these forms had been sent to the IRS Centers by the individuals preparing the form. The Third Circuit held, that since these forms were stored by the IRS without an indexing system or method of retrieval, as a practical matter, they were neither accessible nor available to the IRS. 616 F.2d at 673-74. But see United States v. Theodore, 479 F.2d 749, 755 (4th Cir. 1973) (the Fourth Circuit refused to enforce an IRS summons because nothing in the record supported the conclusion that the IRS could not readily retrieve the information from its files).
It is well established that the IRS is entitled to receive original documents in response to a summons. United States v. Davey, 543 F.2d 996, 1001 (2d Cir. 1976). Davey does not, however, address the issue whether the IRS has the right to obtain original documents a second time, after it returned the originals to the taxpayer.
In this action, the IRS received original documents from Moseley, thereby satisfying the requirement of Davey. It then chose to copy their original documents and return them to the taxpayer.
Since the IRS made the copies of the documents themselves, there can be no question that the copies were true duplicates of the original documents received from Moseley.
The IRS has not cited one case where the IRS received original documents from a taxpayer, chose to copy those documents, returned the originals, and then asked for the same original documents again from the same taxpayer.
Cases cited by the IRS for the proposition that a summons can be enforced as long as the bulk of the materials is not demonstrably in the possession of the IRS deal with document requests made to third parties and the taxpayer's refusal to produce documents which the IRS received from other sources. See United States v. Davis, 636 F.2d 1028, 1037 (5th Cir.), cert. denied, 454 U.S. 862, 70 L. Ed. 2d 162, 102 S. Ct. 320 (1981) (IRS denied that it already possessed the information and taxpayer maintained that IRS received the information from a local bank). This is clearly not the case here. The IRS concedes that it possesses some of the documents, see Supplemental Declaration P 2, and that these documents were obtained from the taxpayer through voluntary production. I can see no purpose in requiring Moseley to produce documents which the IRS already has in its possession.
It is quite a different matter, however, if the IRS is maintaining that they have copies of documents which are illegible due to a copying problem. Such a mishap is not unusual and if that is the case, those documents would not be readily accessible to the IRS and should not prohibit the IRS from reexamining the documents in question.
In this case, the IRS does not maintain that the documents which it has in its possession, in a complete and legible manner, are inaccessible. Agent Michalski's reason for requesting all of the original documents produced is that some copies are incomplete and illegible. While this provides a reason for the production of certain documents, it does not provide a reason for the production of all of the documents.
Therefore, because the IRS admits that it retained copies of documents previously produced, and because it is unclear which documents the IRS possesses, it is necessary to limit enforcement of this petition. The IRS must provide Moseley with a list of those documents that it possesses in a complete and legible state and which it obtained from him through prior voluntary production. Moseley must then fully comply with the summons, except that it need not produce those documents which appear on the IRS's list.
C) Summons Vague and Overbroad
Finally, Moseley maintains that the IRS summons is vague and overbroad in that it requests "general correspondence and administrative files." According to Moseley, it is impossible to determine which items of general correspondence and items in the administrative files are relevant to the IRS examination.
26 U.S.C. § 7602(a)(1) authorizes the secretary of the Treasury to summon and "examine any books, papers, records, or other data which may be relevant or material" to a particular tax inquiry. "The language 'may be' reflects Congress' express intention to allow the IRS to obtain items of even potential relevance to an ongoing investigation, without reference to its admissibility." United States v. Arthur Young & Co., 465 U.S. 805, 814, 79 L. Ed. 2d 826, 104 S. Ct. 1495 (1984) (emphasis in original).
An IRS summons is overbroad if "it does not advise the summoned party what is required of him with sufficient specificity to permit him to respond adequately to the summons." United States v. Medlin, 986 F.2d 463, 467 (11th Cir. 1993) (quoting United States v. Wyatt, 637 F.2d 293, 302 n.16 (5th Cir. 1981)). Generally, in order to avoid being overbroad the summons must identify: (1) the object of the investigation; (2) the records sought; and (3) the time period from which the documents are to be drawn. See id.; Linsteadt, 724 F.2d at 483.
The IRS summons states:
You are hereby summoned and required to appear before Special Agent Thomas Michalski, an officer of the [IRS], to give testimony and to bring with you and to produce for examination the following books, records, papers, and other data relating to the tax liability or the collection of the tax liability or for the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws concerning the person identified above [Roy C. Moseley] for the periods shown.
Attached to the summons is a separate document which lists nine separate categories of documents and requires the production of:
Any and all books, records, documents, and other items as set forth below for [MCI] for the period January 1, 1980 through and including January 31, 1991 . . .