http://www.supremecourt.gov/opinions/13pdf/13-301_q9m4.pdf
United States v. Clarke et al. (June 19, 2014 – 2014 US __ ) was a unanimous decision of the United States Supreme Court. The IRS had issued summonses to the respondents requiring them to appear and provide certain tax information. When they failed to appear the IRS brought an enforcement proceeding to compel them to appear. The respondents resisted that proceeding arguing that the issuance of the summonses was abusive and sought to question the agents involved. The District Court denied the request and ordered the enforcement of the summonses characterizing the respondents’ arguments as conjectural and ill-founded in law. The Eleventh Circuit reversed, characterizing the District Court’s holding as an abuse of discretion; they held, based on their own Circuit precedent, that the respondents were entitled to questions the agents whether or not they had established any factual basis for the request. The Supreme Court granted certiorari since there was a Circuit split on the point; all other Circuit Courts had rejected the position that a bare assertion of abuse was a sufficient foundation for examining the IRS agents involved.
The Supreme Court opted for a moderate course which did not accept the bare assertion approach, but nor did it require the establishment of a prima facie case for abuse (pp. 6-7):
The balance we have struck in prior cases comports with the following rule, applicable here: As part of the adversarial process concerning a summons’s validity, the taxpayer is entitled to examine an IRS agent when he can point to specific facts or circumstances plausibly raising an inference of bad faith. Naked allegations of improper purpose are not enough: The taxpayer must offer some credible evidence supporting his charge. But circumstantial evidence can suffice to meet that burden; after all, direct evidence of another person’s bad faith, at this threshold stage, will rarely if ever be available. And although bare assertion or conjecture is not enough, neither is a fleshed out case demanded: The taxpayer need only make a showing of facts that give rise to a plausible inference of improper motive. That standard will ensure inquiry where the facts and circumstances make inquiry appropriate, without turning every summons dispute into a fishing expedition for official wrongdoing. And the rule is little different from the one that both the respondents and the Government have recommended to us.
The decision of the Eleventh Circuit was vacated and the matter remanded to them for further proceedings consistent with the Supreme Court’s ruling.