Page:Polselli v. IRS.pdf/6

4 But the banks did, and Mrs. Polselli, Jerry R. Abraham, and Abraham & Rose filed motions to quash in Federal District Court.

The District Court dismissed the case for lack of subject-matter jurisdiction, reasoning that the IRS did not need to provide notice. Polselli v. United States, 2020 WL 12688176, *4 (ED Mich., Nov. 16, 2020). The District Court credited Bryant’s assertions that “the purpose of his investigation [was] to locate assets to satisfy Mr. Polselli’s existing assessed federal tax liability and that the IRS issued the summonses in question to aid in the collection of these assessed liabilities.” Ibid. Because the Code excluded petitioners from the required notice, there was no waiver of sovereign immunity, and the District Court therefore lacked jurisdiction to entertain the motions to quash. Id., at *5.

The Sixth Circuit affirmed in a divided opinion, reasoning that no notice was required because “the summonses at issue fall squarely within the exception listed in §7609(c)(2)(D)(i).” Polselli v. Department of Treasury–IRS, 23 F. 4th 616, 623 (2022). Before the Sixth Circuit, petitioners had argued in favor of a rule—previously adopted by the Ninth Circuit—requiring that a taxpayer have “some legal interest or title in the object of the summons” for the notice exception to apply. Ip v. United States, 205 F. 3d 1168, 1175 (2000). To decide whether a taxpayer maintains a sufficient legal interest “in the object of the summons,” the Ninth Circuit considers “whether there was an employment, agency, or ownership relationship between the taxpayer and third party.” Viewtech, Inc. v. United States, 653 F. 3d 1102, 1106 (2011). But the Sixth Circuit below rejected the Ninth Circuit’s legal interest test, concluding that it was contrary to the plain language of §7609(c)(2)(D)(i). 23 F. 4th, at 625. The panel below instead held that “as long as the third-party summons is issued to aid in the collection of any assessed tax liability the notice exception applies.” Id., at 624 (internal quotation