650 F. App'x 425
9th Cir.2016Background
- Wen-Bing Soong and Hsin-Jung Shirley Soong, lawful permanent residents, own a home in Union City, California, but declared after IRS service attempts that they relocated to Taiwan and did not intend to return.
- The IRS issued administrative summonses (for tax years 2004–2007) and attempted service at the Union City residence; an IRS agent left the summonses with the Soongs’ adult son, Henry, who said his parents were "traveling."
- The Soongs moved to dismiss/enjoin enforcement for lack of personal jurisdiction and inadequate service, arguing they were not in the U.S. and therefore should have been served under Fed. R. Civ. P. 4(f) (service in a foreign country) and that § 7603(a) service was improper.
- The government presented records (county, DMV, tax forms, correspondence) showing the Union City address as the Soongs’ residence and mailing address and that the IRS had been corresponding to that address.
- The district court denied the motion and granted the IRS’s petitions to enforce the summonses; the Soongs appealed only the service/personal-jurisdiction issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court had personal jurisdiction because service at Union City was inadequate given the Soongs’ alleged residence in Taiwan | Service was required under Rule 4(f) in Taiwan because the Soongs lived abroad and were not present in the U.S. | Service in U.S. was proper: Rule 4(e)(2)(B) (left at dwelling with competent adult) and Rule 4(e)(1) by California substituted service §415.20 | Court held service was adequate; Soongs failed to rebut prima facie showing that Union City was their dwelling and mailing address, so personal jurisdiction proper |
| Whether IRS complied with § 7603(a) when issuing and serving administrative summonses | Service defective under §7603 because Soongs no longer resided at Union City, so summons invalid | IRS satisfied §7603: summons delivered to last and usual place of abode; substantial compliance and good faith; taxpayers received actual notice | Held IRS complied; even if minor defect, no prejudice and actual notice existed, so enforcement proper |
| Whether the government met Powell prima facie burden to enforce summonses | (Soongs did not contest substantive compliance) | Government provided agent declaration showing legitimate purpose, relevance, non-possession of records, and required administrative steps | Court held Powell factors satisfied; enforcement appropriate |
| Whether evidentiary objections to government declarations preserved | Plaintiffs raised competency/reliability only on appeal | Government noted objections not raised below | Held objections waived for failure to timely object in district court |
Key Cases Cited
- Muniz v. United Parcel Serv., Inc., 738 F.3d 214 (9th Cir. 2013) (appellate affirmance may be based on any ground supported by the record)
- United States v. Richey, 632 F.3d 559 (9th Cir. 2011) (summons enforcement standards; substantial compliance with §7603 and prejudice analysis)
- United States v. Powell, 379 U.S. 48 (U.S. 1964) (government’s prima facie burden to enforce IRS summonses)
- United States v. Dynavac, Inc., 6 F.3d 1407 (9th Cir. 1993) (agent declaration may satisfy government’s slight burden)
- United States v. Gomez-Norena, 908 F.2d 497 (9th Cir. 1990) (preservation rule for evidentiary objections on appeal)
- Marbled Murrelet v. Babbitt, 83 F.3d 1060 (9th Cir. 1996) (failure to request a ruling can constitute waiver of objection)