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May 19, 2023

Unanimous Supreme Court holds IRS need not give taxpayer notice when issuing third-party summons

Affirming the Sixth Circuit in a unanimous opinion, the Supreme Court has held (Remo Polselli, et al. v. IRS) that the IRS is not required to provide notice to the taxpayer when it seeks third-party records in an effort to collect assessed tax liabilities; only the person identified in the summons must be notified and may bring a motion to quash the summons. The exception to the notice requirement in IRC Section 7609(c)(2)(D)(i) — applicable if notice would give the taxpayer an opportunity to move assets out of the IRS's reach — applies regardless of whether a delinquent taxpayer has a legal interest in the accounts or records being summoned, the Court ruled.

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor