Handbook 109.1
Summons Handbook
Chapter 3
Procedures
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Contents
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This chapter contains the following sections:
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Service of Summons
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Designated Summons
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Time and Place of Exam Set by Summons
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Serve an attested copy of a summons in accordance with IRC 7603. The face
of the summons given to the summoned person should bear an attestation statement.
See Exhibit 109.1.3-1. Briefly, Form 2039- A should be:
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handed to the person to whom it is directed, or
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left at his or her last and usual place of abode by leaving it with a person
who is of suitable age and discretion, with instructions that the summons
be given to the summoned individual, or by affixing the summons to the front
door of the last and usual place of abode by a means that will not mar the
finish.
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NOTE:
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Casual, on the spot preparation and service of the summons should be avoided
since such might encourage defiance and noncompliance.
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Serve a summons issued to a third-party recordkeeper by registered or certified
mail, or personally deliver it to the person to whom it is directed. However,
service by registered or certified mail is the preferred method of service
for third party recordkeepers. See Chapter 6, Section 6.3.2 for an explanation
of third-party recordkeepers. Mail the summons to the last known address
of the recordkeeper and document the case file by recording the method of
service.
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After completion of the certificate of service, place Form 2039 in the
administrative file in the office of the issuing division for use as the
basis for litigation, if necessary.
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If a witness requests that he or she be served with a summons as evidence
of his or her legal duty to produce records, testify or provide handwriting
analysis, and indicates he or she will voluntarily comply, issue the summons
for that purpose. This is commonly referred to as a "friendly summons." However,
do not follow this procedure with a John Doe summons because such a summons
can only be served after approval by a federal district court judge. Serving
a John Doe summons without court approval violates the statute and may jeopardize
the investigation.
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If information requested by a summons is later determined to be unnecessary,
compliance with the summons may be waived by the issuing official, provided
the summons is not the subject of litigation. If it is, concurrence of the
Counsel office handling the litigation must be obtained before compliance
may be waived.
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Witness fees and payments for mileage may be made to all summoned witnesses,
whether a third-party witness, the taxpayer, or the taxpayer's representative.
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Under IRC 7610(b)(2), if the summoned party is the taxpayer or the taxpayer's
officer, employee, agent, accountant, or attorney who was acting in that
capacity when the summons was served, then that person is not entitled to
the reimbursement of costs incurred in searching for, reproducing, or
transporting summoned records. Under IRC 7610(b)(1), only certain summoned
third-party witnesses are eligible for reimbursement of those costs. Excluded
from eligibility are third-parties summoned to produce records in which the
taxpayer has a proprietary interest. If the person summoned is a third-party
entitled to reimbursement, he or she will be given the notice explaining
the payment procedures (Form 2039-B); otherwise, discard Form 2039 -B. See
Chapter 9, Fees and Costs for Summoned Witnesses, for further information.
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If the summons is served on a third-party and any person is entitled to notice
of its issuance, provide Part C of Form 2039 to the noticee along with Part
D of Form 2039, which explains the right to contest the administrative summons.
If more than one person is entitled to notice of the issuance of summons,
the summons and notice may be reproduced to provide such notification. This
would occur, for example, in a situation where a bank account is listed in
two names even if the two persons reside at the same address.
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NOTE:
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The copy of the summons provided to the noticee, Form 2039-C, is not required
to bear an original signature. However, the copy served on the summoned party,
Form 2039-B, must bear an original signature of the official serving the
summons.
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If the summons is not served on a third-party witness and/or notice is not
required because the summons fits into an exception to the notice requirements
of IRC 7609, discard the second copy (Form 2039-C) and the notice (Form 2039-D).
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When investigating the joint liability of a husband and wife, if it is necessary
to obtain either records or testimony from both spouses, serve a separate
summons on each spouse. However, if only one spouse has custody or control
of all of the records that may be relevant to the investigation or if the
Service needs the testimony of only one spouse, serve only the spouse from
whom the records or testimony is sought.
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When issuing a summons to a person in his or her capacity as trustee, receiver,
custodian, corporate or public official, the person's title or position and
the name of the entity should be added. For example, a summons for corporate
records would read, "Mr. S, as president of XYZ Corporation and the XYZ
Corporation" .
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A summons may be issued to a corporation for the production of corporate
records. If the summons is directed to the custodian of records, it must
be served personally on the custodian. If the summons is directed solely
to the corporation, it must be personally served on a corporate officer or
a person authorized to accept service of the summons on behalf of the
corporation. Although IRC 7603 provides that a summons may be served by leaving
it at the summoned person's "last and usual place of abode," this rule does
not apply when a corporation is the summoned person because a corporation
has no abode. Consequently, do not serve a summons on a corporation by leaving
it at the custodian's or the authorized person's place of abode. They are
not the summoned corporation; they merely represent that entity.
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All carbon copies served on the person summoned should contain the following
statement: "I hereby certify that I have examined and compared this copy
of the summons with the original and that it is a true and correct copy of
the original." The copies should also contain the original signature and
title of the IRS official serving the summons Type or handwrite the statement
of attestation on earlier revisions of the summons forms. A rubber stamp
of the attestation may be used. This statement (Exhibit 109.1.3-1) can be
found on the following existing summons forms:
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Form 2039, Summons (July 1992 and subsequent revisions)
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Form 6637, Collection Information Statement (October 1993 and subsequent
revisions)
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Form 6638, Income Tax Return (October 1993 and subsequent revisions)
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Form 6639, Financial Records (October 1993 and subsequent revisions)
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The back of the original summons must have a statement that the copy served
contained the required attestation.
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After the summons has been served, complete the certificate of service on
the reverse side of the original summons including the signature of the employee
who served the summons.
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NOTE:
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If the summoned party fails to comply with the requirements of the summons,
see Chapter 10, Enforcement of Summons for enforcement procedures.
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To serve a summons in another district:
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Collection/Exam/EP/EO should use Form 2209, Courtesy Investigation, to send
the summons to the other district to request that it be served. Criminal
Investigation should prepare a collateral request for this purpose.
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It is the responsibility of the receiving district to complete the spaces
on the summons indicating the name, address, and telephone number of the
Service employee before whom the summoned party is required to appear, as
well as the place and time for appearance.
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Collection employees should contact the SPf in the Office of the Assistant
Commissioner (International) for guidance on serving a summons on an individual
or entity located outside of the United States.
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[109.1]
3.2.2 (04-30-1999)
Issuing a Summons for Service in Another District or Region and Summoning
Information From a Foreign Organization or Individual-Examination Division
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Coordination and cooperation is necessary between the examining office and
another district or region.
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When conducting an IRC 482 examination, it may be necessary to summon a person
living or doing business in another district or region. If so, obtain approval
to issue the summons from the Regional Chief Compliance Officer for the region
in which the examination is taking place.
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If the summons crosses regional lines, the region will forward the summons
to the region requested to cooperate.
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The examining office will provide a completed summons (if possible), and
a memorandum explaining the relevance and materiality of the summoned
information, and the assistance needed from the cooperating office.
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The examining office has the basic authority and responsibility for issuing
the summons, and proceeding with its enforcement. The cooperating office
acts solely as an agent of the examining office.
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Forward judicial enforcement requests to Regional Counsel where the examining
office is located.
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Contact the Assistant Commissioner (International) for advice and assistance
before any contact with a foreign organization, summons, or presummons letter
is issued to obtain information from a foreign organization (not doing business
in the U.S.) or an individual (not physically present in the U.S.).
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IRC 6503(j) was enacted as a means to counter taxpayers who:
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refuse to extend the statute of limitations before the Service has fully
developed a case, or
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have resisted disclosure of necessary information and forced the examiners
to issue notices of deficiency based on incomplete information.
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A designated summons:
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may only be issued to a corporation with respect to such corporation's tax
return, or to any other person to whom the corporation has transferred records,
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may be issued only to a corporation with respect to a return for which a
corporation is being examined under the coordinated examination program (or
any successor program, i.e., large case program examinations),
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requires pre-issuance review by the Regional Counsel for the region in which
the examination is being conducted,
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must clearly state that it is a "designated summons" ,
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must refer to the year or years under examination if a designated summons
is issued for some of the years of examination. This is to avoid the statute
of limitations on assessment from being tolled.
The statute can be tolled if litigation results from a related summons issued
to the same or another person on matters that apply to the same tax return
as the designated summons. The related summons must be issued within a 30-day
period following the issuance of the designated summons. There is no limitation
on the number of related summonses that can be issued.
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Designated and related summonses must be approved by a Chief, Examination
Branch, in the district which will issue the summons.
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If approved, forward the summons to District Counsel for review and coordination
at the regional level.
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A memorandum should accompany the summons explaining the reasons the taxpayer
refused to extend the statute of limitations for assessment. In addition,
the memorandum should have sufficient explanation to establish that all
procedural requirements for issuance have been met, and if the summons will
be issued near the end of the period permitted by IRC 6503(j), and the reason
that the summons was not issued at an earlier date.
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The running of the period of limitations will not be suspended if a designated
summons is complied with and a suit is not filed to enforce a related summons.
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Technically, the statute of limitations can be suspended by filing suit to
enforce a related summons even where the taxpayer has complied with the
designated summons.
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Examiners should consult with District Counsel as to whether the Service
should attempt to suspend the statute based solely upon a related summons.
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District Counsel will notify Examination whether the summons should be issued
after review and coordination.
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Notify and send copies of any designated or related summons issued to the
corporation under examination.
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The statute of limitations will be suspended for the period beginning when
a lawsuit is initiated in a court of law to either enforce or quash the summons
and ending on the date that there is a final resolution regarding the summoned
person's response to the summons. In the instance of a suspended statute
of limitations:
a. Counsel will notify Examination of actions so that the statute can be
updated accordingly.
b. The examiner responsible for the case will:
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Update the statute are using the alpha codes: "PP" to identify the irregular
statute date.
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Remove the alpha code "PP" and the extended statute date when the summoned
party complies with the designated summons.
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Update the statute when the suspension period is ended.
c. If the court does not require additional compliance, the assessment period
will in no case expire before 60 days or the number of days that remained
on the statute when the summons enforcement proceeding was filed, whichever
is greater.
d. If the court requires additional compliance, the statute date will expire
120 days from the date of final resolution.
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If a designated summons is issued near the end of the statute of limitations
(which is at least 60 days prior to expiration), give the summoned party
only the minimum 10-days to appear as required by section 7605(a). Do not
grant an extension of time to the summoned party for response to the summons.
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A summons issued under IRC 6503(j) must clearly state that it is a designated
summons. The following statement should be typed at the top of the first
page of Form 2039, Summons, for a designated summons: "This is a designated
summons pursuant to IRC 6503(j)."
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Type the following at the top of the first page of Form 2039 if the summons
is related to a designated summons: "The summons is related to a designated
summons issued on (date) pursuant to IRC 6503(j)."
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It is important that only the name of the taxpayer appears on the taxpayer
identification portion of the summons identified by the phrase "In the matter
of the tax liability of (_____________)."
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Generally, the following guidelines apply:
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The time and place of examination must be reasonable.
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The date for appearance should not be on a Saturday, Sunday, or a legal holiday.
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If a prospective witness is cooperative, the summons should be made returnable,
if feasible, at the place that suits the witness' convenience.
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If the witness is uncooperative or attempts to hamper the investigation,
it may be best to have him or her appear and produce his or her records at
the agent's office.
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In computing the time period for appearance or production of records, do
not include the date of service but do count the date of appearance.
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If the summons is directed to a third-party and is subject to the notice
and waiting period requirements of IRC 7609:
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Set the date for appearance at least 24 days after the date notice of the
summons is given.
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Do not accept records from the summoned third-party prior to the date of
appearance because noticees have the right during this time period to initiate
proceedings to quash the summons.
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If a proceeding to quash has properly been instituted, do not examine records
unless the court so orders, or the noticee who has instituted the proceeding
consents.
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If the summons is not subject to IRC 7609 requirements, the date for appearance
must be not less than 10 days from the date of service, but the summoned
person may voluntarily comply at an earlier time.
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A third-party witness may request service of a summons as evidence of a legal
duty to testify or produce records. If the summons is not subject to IRC
7609 notice and waiting period requirements, the date for appearance is 10
or more days after service of the summons even if the person expects to respond
on an earlier date. (See IRC 7609(c)(2) and Chapter 6 of this handbook for
a discussion of third-party summonses not subject to the 24 day notice period
of IRC 7609.)
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NOTE:
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Do not use this procedure when the taxpayer or other person is entitled to
a notice. Do not use this procedure for a John Doe summons, which may only
be served after approval by a federal district court judge.
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If a summoned witness for a valid reason (such as illness) cannot appear
on the date fixed in the summons, the date may be continued by mutual agreement.
To formally extend the compliance date of the summons:
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Specify the new appearance date in writing. The letter should be signed by
the Service employee who issued the original summons and approved by the
Service employee who approved the issuance of the original summons. Mail
the letter by certified mail or hand deliver to the summoned party.
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If the issuing Service employee has problems obtaining compliance on the
extended appearance date, consult District Counsel for possible remedies.
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Exhibit [109.1]
3-1 (04/30/99)
Example of Attestation
This is to state that I executed an Internal Revenue Summons (Form 2039)
and served it on Mr. John P. Oak, President of ABC Manufacturing Company,
Inc. 114 Easy Street, U.S.A., on May 11, 1997, at 11:14 a.m.. I handed the
Attested Copy of the Summons (Form 2039) to Mr. John P. Oak in accordance
with Section 7603, Internal Revenue Code. The Summons required Mr. John P.
Oak to appear before me and to produce certain corporate records on May 22,
1997, at 10:00 a.m., at the office of the Examination Division, Room 300,
Federal Building, 900 Chapter Street, U.S.A.Mr. John P. Oak failed to comply
with the Summons. He did not appear at the scheduled time and place, and
has since failed to appear or produce the corporate records designated in
the Summons.Signature of AgentName of AgentTitle of Agent |
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Internal Revenue Manual
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Hndbk. 109.1 Chap. 3 Procedures
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(04-30-1999)
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