wos won 12 13 14 15 16 17 1g 19 20 21 22 23 25 26 27 28 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA < IN THE MATTER OF THE TAX LIABILITIES OF: JOHN DOES, Jnited States taxpayers, who during any part of the period January 1, 2005, through December 31, property in the State of Baiiforsia for Little of no a consideration subject to California Propositions 58 o. 193, which information is 4 the’ possession of the St California Board of myoy Equalization, sent tong Gey by the 58 California copnNes pursuant to proposigions 58 and 193, Presently before the Court is the United States’ Ex Parte 00000) Petition for Leave to Serve “John Doe” Summons (“Petition”). By way of its Petition, the United States seeks leave to serve, pursuant to 26 U.S.C. § 7609(£), an Internal Revenue Service (“IRS”) “John Doe” Summons (hereafter “Summons”) on California’s Board of Equalization (“BOE”). For the following reasons, the United States’ Petition is GRANTED. 1woe w Ne 12 13 14 15 16 17 1g 19 20 21 22 23 25 26 27 28 BACKGROUND® In its previous Order, ECF No. 3, the Court denied the United States’ Petition on the grounds that it did not meet one of the thres elements necessary to grant a Summons. Hecause failing to meet one of the three elements is dispositive, the Court did not address the other two elements. In its Order, the Court also advised the United States that if it chose to resubmit the Petition, it would have to address four addi a1 inquiries regarding the constitutionality of issuing a S re a state. The United States has now resubmitted th€ Petition. The revised Petition expands on the discussi! the three required elements and also addresses each of Qe inquires raised by the Court. oO Thie Order first addressee, of the three elements necessary for the issuance off@pSummons and then turns to a consideration of each of Inited States’ responses to the court's four edditiony@sauizies. “For the purpogA ¢f ascertaining the correctness of any return, making turn where none has been made, [or] determining agtansiity of any person for any internal revenue tax...,” the Internal Revenue Code (“IRC”) empowers the Secretary of the Treasury, or its delegate to: We wt 2 For the purposes of this Crder, the Court presumes Petitioner’s familiarity with the facts and background of this matter as sat forth in its previons order 2wos won 15 16 17 1g 19 20 21 22 23 25 26 27 28 [S]ummon the person liable Zor tax or required to perforn the act...or any pezson having possession custody, or caré of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary may deem proper ... to produce such books Papers, records, or other data, and to give such testimony as may be relevant or material to such inquiry. 26 U.S.C. 8§ 7602(a), 7701(11). The IRS power to summon extends even to those situations in which the identity of the taxpayer is unknown. 26 U.S.C. § 7609(£). This power is somewhat limited, howevem because where, as here, the IRS seeks to summon intorngibe vat pertains to an unknown taxpayer, and the information i€ fn the custody of a third party, the United States must. ma’ Showing to the court Ebat @ 1) its investigation relates ascertainable class of persons; 2) a reasonable basis ex} x the belief that these unknown taxpayers may haf@ptailed to comply with Internal Revenue Laws; and 3) the United Stat, inhot obtain the information sought Id. The Court willgAddress each of these elements in order. In its prior order, ye Court determined that the IRS failed to satisty the wala elenent. “tt “st tt “t “st tt “ee