The current U.S. Supreme Court term promises to be an especially important one for tax practitioners. In addition to the recent arguments in Bittner v. United States, No. 21-1195 (argued Nov. 2, 2022) (addressing the penalties that can be imposed for non-willful FBAR violations) and In re Grand Jury, No. 21-1397 (argued Jan. 9, 2023) (addressing the application of the attorney-client privilege to communications that include tax-preparation advice), on Dec. 9, 2022, the court granted a writ of certiorari in Polselli v. IRS, No. 21-1599, to address a two-decade old Circuit split regarding the scope of the Internal Revenue Service’s obligation to provide notice when it seeks records in connection with its efforts to collect past due taxes. This column discusses the approaches taken by different Circuit Courts of Appeals and the Supreme Court’s decision to resolve the circuit split.

Background Regarding Summonses

Section 7602 of the Internal Revenue Code gives the IRS broad authority to issue summonses “[f]or the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect of any internal revenue tax, or collecting any such liability.” Section 7609 sets forth the procedures to be applied when the IRS serves summonses on third-party recordkeepers. In general, within three days of serving a summons on a third-party, the IRS must provide a copy of the summons to the person whose financial records are being sought. That person may then challenge the summons in court.

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