The US Supreme Court ruled Thursday that the Internal Revenue Service (IRS) does not need to provide notice to delinquent taxpayers of summons made against them to collect outstanding federal taxes. This does not apply to summons to determine whether a taxpayer owes an outstanding amount, only summons to collect.
The case, Polselli v. Internal Revenue Service, concerned a delinquent taxpayer, Remo Polselli, who underpaid his federal taxes and had an outstanding balance of over $2 million. Polselli was disputing the summons he received from the IRS to collect that outstanding amount, claiming that he did not have the notice required by §7609 of the US Codes. The court unanimously determined that notice was not required because of an exception that applies to summons “served on the person with respect to whose liability the summons is issued,” interpreting this exception to include summons to collect outstanding taxes.
Writing for the court, Chief Justice John Roberts made clear that this exception only applied to summons to collect an already-determined delinquent amount, saying:
In other words, the IRS may issue summonses both to determine whether a taxpayer owes money and later to collect any outstanding liability. When the IRS conducts an investigation for the purpose of “determining the liability” of a taxpayer, §7602(a), it must provide notice, §7609(a)(1). But once the Service has reached the stage of “collecting any such liability,” §7602(a)—which is a distinct activity—notice may not be required, §7609(c)(2)(D).
Although the court was unanimous in its holding, Justice Ketanji Brown Jackson wrote a concurring opinion stressing that the IRS’s ability to issue summons is not unrestricted. Emphasizing that “notice is not a mere formality,” Jackson noted that notice is still the default rule for summons and that the IRS is “not necessarily exempt from notice obligations any time a tax-delinquency matter enters the collection phase.” Justice Neil Gorsuch joined Jackson’s opinion.