The U.S. Supreme Court on Thursday ruled unanimously that taxpayers have a right to challenge an Internal Revenue Service summons enforcement action in court when they can show the tax agency might have issued the summons in bad faith.
The tax-collecting IRS argued taxpayers already have opportunities to challenge a summons, but the nine justices ruled in favor of a Florida man who demanded an evidentiary hearing about the motives of IRS officials for issuing a summons.
Michael Clarke of West Palm Beach said the IRS issued a summons as retribution against him and his business partners for resisting an audit.
In a nine-page opinion written by Justice Elena Kagan, the Supreme Court said: "A taxpayer has a right to conduct an examination of IRS officials regarding their reasons for issuing a summons when he points to specific facts or circumstances plausibly raising an inference of bad faith."
Not everyone agrees that the ruling empowers taxpayers. (See related article in Expert Views.)
The case is United States v Clarke et al, U.S. Supreme Court, No. 13-301.