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The Future of IRS Summonses After Supreme Court ‘Poselli’ Ruling

In Polselli v. Internal Revenue Service, the U.S. Supreme Court unanimously refused to limit the IRS’s ability to issue summonses without notice to situations in which it seeks records of accounts in which a delinquent taxpayer has an interest. This article discusses the court’s decision, Justice Jackson’s concurring opinion, and the potential for future challenges to the IRS’s issuance of summonses without notice.

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The Internal Revenue Service has broad powers to collect unpaid taxes. In order to locate a delinquent taxpayer’s assets, the IRS can issue summonses seeking records relating to the delinquent taxpayer’s financial accounts, as well as accounts held by third parties with whom the delinquent taxpayer has done business. Over the years, courts have split over whether such third parties are entitled to notice that the IRS has summoned their financial records.

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