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UNITED STATES v. RANIERE

July 24, 1995

UNITED STATES OF AMERICA, Petitioner,
v.
JOSEPH RANIERE, Respondent.



The opinion of the court was delivered by: ALFRED J. LECHNER

 LECHNER, District Judge

 This is an action brought by petitioner, the United States of America (the "Government") to enforce an Internal Revenue Service (the "IRS") summons (the "IRS Summons"). Jurisdiction is alleged pursuant to 26 U.S.C. §§ 7402(b) and 7604(a), and 28 U.S.C. §§ 1340 and 1345. Venue appears to be proper. 28 U.S.C. §§ 1391(b) and 1396.

 The IRS issued the IRS Summons to respondent Joseph Raniere ("Raniere") in his capacity as president of Robert Romeo, Inc. ("Romeo Inc."), d/b/a Raniere Associates, Inc. ("Raniere Associates").

 Currently before the court is the petition, filed by the Government, seeking to enforce the IRS Summons (the "Petition to Enforce"). *fn1" For the reasons set forth below, the Petition to Enforce is granted; Raniere is ordered to comply with the IRS Summons.

 Facts

 A. The IRS Summons

 Raniere is president and sole shareholder of Romeo Inc., d/b/a Raniere Associates. Bassinder Declaration, P 2. The IRS has been conducting an investigation (the "IRS Investigation") into Raniere's Federal tax liability during the 1991 through 1993 tax years. Id. at P 3. The IRS Investigation has yielded information indicating Raniere may have had unreported income during the years in question. Id. at P 5. The alleged unreported income is associated with Romeo Inc. Id.

 IRS Special Agent Bassinder issued the IRS Summons to Raniere. This was done pursuant to sections 7602 and 7603 of the Internal Revenue Code, 26 U.S.C. 7602 & 03, and to the power given her as an IRS Special Agent pursuant to 26 C.F.R. § 301.7602. *fn2" The IRS Summons required Raniere to produce a number of Romeo Inc.'s corporate documents and to give testimony with respect to those documents. *fn3" See IRS Summons at 1. The IRS Summons was served on Raniere "as President of [Romeo Inc.] d/b/a Raniere Associates ...." Id. Additionally, the IRS Summons is restricted on its face to the time period from 1 January 1991 through 31 December 1993. Id.

 All administrative requirements necessary for the issuance of an IRS summons have been satisfied. Bassinder Declaration, P 16. There is no "Justice Department Referral" (i.e. no grand jury investigation or request for a criminal prosecution), and the Department of Justice has not made a request for the disclosure of any return or return information with respect to Raniere. Id. at P 4.

 The IRS currently possesses some of Romeo Inc.'s corporate documents. *fn4" Id. at P 9. The documents currently in IRS possession, however, are insufficient to satisfy the IRS Summons. Id.

 Raniere has not complied with the IRS Summons, as required. Id. at P 8. The Amended OTSC required Raniere to "file and serve a written response to the Petition supported by appropriate affidavit(s), as well as any motions [Raniere] desires to make." Amended OTSC at 2.

 The Amended OTSC further ordered:

 
that all motions and issues raised by respondent JOSEPH RANIERE will be considered upon the return date of this Order; that only those issues raised by motion or brought into controversy by the responsive pleading, and supported by affidavit(s), will be considered at the return of this Order; that any uncontested allegations in the Petition will be considered as admitted for the purposes of this enforcement proceeding; that the affidavits in opposition to the Petition or in support of any motion shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein; and that any affidavit failing to comply with this standard shall not be considered by the Court[.]

 Amended OTSC at 2-3.

 B. Raniere's Response

 In response to the Petition to Enforce and the Amended OTSC, Alan G. Merkin ("Merkin"), Raniere's counsel, submitted the Response, supported by the Merkin Affidavit. The Merkin Affidavit states Merkin has "been charged with the care, responsibility and handling of the within matter and, as such, has personal knowledge of the case and [is] fully familiar with the facts contained therein." Merkin Affidavit at 1. The Merkin Affidavit contends the IRS Summons is unenforceable for the reasons set forth in the Response. Merkin Affidavit at 2. *fn5"

 Discussion

 A. The Government's Prima Facie Case

 United States v. Powell, 379 U.S. 48, 13 L. Ed. 2d 112, 85 S. Ct. 248 (1964), sets forth the requirements for a prima facie case for enforcement of the IRS Summons. The Government "must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, that the information sought is not already within the [Government's] possession, and that ...


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