Kish v. U.S.

MEMORANDUM & ORDER Petitioners Shlomo and Zissy Kish commenced this action on August 1, 2023, against Respondents the United States of America and the Department of the Treasury, Internal Revenue Service (“IRS”), seeking to quash two summonses the IRS issued to them in connection with an IRS examination of their federal income tax returns and reporting obligations (the “Summonses”). (Pet. to Quash IRS Summons (“Pet.”), Docket Entry No. 1.) Petitioners contend that the Summonses are invalid and unenforceable because they do not meet the requirements for IRS summonses set forth in United States v. Powell, 379 U.S. 48 (1964). (Pet.

10, 28.) The IRS opposes the motion and cross-moves to enforce the Summonses.¹ (Resp’ts’ Mem. in Opp’n to Pet. & in Supp. of Cross-Mot. to Enforce Summonses (“IRS Mem.”), Docket Entry No. 18.) For the reasons set forth below, the Court denies Petitioners’ motion to quash the Summonses and grants the IRS’ cross-motion to enforce the Summonses. I. Background Shlomo Kish and Zissy Kish are United States persons who are subject to income tax on their income under the Internal Revenue Code (“IRC”).² (Decl. of Sang Yoon Kim in Supp. of Resp’ts’ Opp’n to Mot. to Quash & in Supp. of Resp’ts’ Cross-Mot. to Enforce (“Kim Decl.”) 5, Docket Entry No. 17). As part of their income tax obligations, Petitioners are required to report all taxable income and pay taxes according to the provisions of the IRC. (Id. 5.) The IRC imposes additional filing obligations on taxpayers who have an interest in or authority over foreign financial accounts or other specified financial assets. (Id. 6); see also 26 U.S.C. §§6038, 6038b, 6038d, 6046, 6046a, 6048 (setting forth additional filing requirements for taxpayers with specified foreign assets or income). i. The IRS investigation of Petitioners’ income and asset reporting In connection with an ongoing investigation of Petitioners’ federal income tax liabilities, the IRS has three open examinations: an examination of the income tax liability of Petitioners for each taxable year ending December 31, 2011 through December 31, 2021, for which they filed a Form 1040 income tax return with joint filing status, (Kim Decl. 8); an examination of Shlomo Kish’s potential liability for penalties based on its belief that he did not file IRS Form 5471³ for each taxable year from 2011 through 2021, despite allegedly having legal ownership of foreign bank accounts and foreign real estate located in the United Kingdom,⁴ (id.