Case: 11-14825 Date Filed: 05/02/2012 Page: 1 of 110 11 ... · Case: 11-14825 Date Filed: 05/02/2012 Page: 1 of 110 . Miccosukee Tribe of Indians of Florida v. United States of America

11-14825-BB IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

MICCOSUKEE TRIBE OF INDIANS OF FLORIDA, a Federally recognized Indian Tribe,

Plaintiff-Appellantv.

UNITED STATES OF AMERICA,

Defendant-Appellee

ON APPEAL FROM THE ORDER OF THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

BRIEF FOR THE APPELLEE

KATHYRN KENEALLY Assistant Attorney General

TAMARA W. ASHFORD Deputy Assistant Attorney General

GILBERT S. ROTHENBERG (202) 514-3361ROBERT W. METZLER (202) 514-3938JOHN A. DUDECK, JR. (202) 514-3026 Attorneys

Of Counsel: Tax Division Department of Justice

WIFREDO A. FERRER Post Office Box 502 United States Attorney Washington, D.C. 20044

Case: 11-14825 Date Filed: 05/02/2012 Page: 1 of 110

Miccosukee Tribe of Indians of Florida v. United States of America

(11th Cir. - No. 11-14825-BB)

C-1 of 7

CERTIFICATE OF INTERESTED PERSONS

AND CORPORATE DISCLOSURE STATEMENT

Pursuant to 11th Cir. R. 26.1-1, it is hereby certified that the

following persons and entities have an interest in the outcome of this

case or have participated as attorneys or judges in the adjudication of

this case:

Alexander, Craig, Chief, Indian Resources Section, Environment and

Natural Resources Division, United States Department of Justice

American Express, summonee

Ashford, Tamara W., Deputy Assistant Attorney General, Tax Division,

United States Department of Justice

Blaha, Amber, Assistant Section Chief, Law & Policy Section,

Environment and Natural Resources Division, United States

Department of Justice

Citibank (South Dakota), summonee



(11th Cir. - No. 11-14825-BB)

C-2 of 7

Clark, Thomas J., Assistant Chief, Appellate Section, Tax Division,


Cook, Janie, Deputy Division Counsel, Tax Exempt & Government

Entities, Office of Chief Counsel, Internal Revenue Service

DiCicco, John A., Deputy Assistant Attorney General, Tax Division,


Dudeck, John A., Attorney, Appellate Section, Tax Division, United

States Department of Justice

Erickson, Mark A., Attorney, Office of Chief Counsel, Internal Revenue

Service

Farrior, William E., Attorney, Civil Trial Section, Southern Region, Tax

Division, United States Department of Justice

Ferrer, Wifredo A., United States Attorney

Freedman, Kimberly J., Jorden Burt LLP, former Attorney for

Appellant

Furnas, James M., Revenue Agent, Internal Revenue Service



(11th Cir. - No. 11-14825-BB)

C-3 of 7

Gerstin, Ari H., Jorden Burt LLP, former Attorney for Appellant

Gold, The Honorable Alan S., Judge, United States District Court for

the Southern District of Florida

Grillo, Lara O’Donnell, Jorden Burt LLP, former Attorney for

Appellant

Hunt, Sylvia F., Assistant Branch Chief, Exempt Organization Branch,

Office of Chief Counsel, Internal Revenue Service

Jacobs, Christie, Attorney, Office of Chief Counsel, Internal Revenue

Service

Jorden, James F., Jorden Burt LLP, former Attorney for Appellant

Katinsky, David M., Assistant Chief, Civil Trial Section, Southern

Region, Tax Division, United States Department of Justice

Kearns, Michael J., Chief, Civil Trial Section, Southern Region, Tax


Keneally, Kathryn, Assistant Attorney General, Tax Division, United




(11th Cir. - No. 11-14825-BB)

C-4 of 7

Kilbourne, James, Chief, Appellate Section, Environment and Natural

Resources Division, U.S. Department of Justice

Lazarus, William, Assistant Chief, Appellate Section, Environment and

Natural Resources Division, U.S. Department of Justice

Lothamer, Casey, Assistant Branch Chief, Exempt Organization

Branch, Office of Chief Counsel, Internal Revenue Service

Marks, Nancy, Attorney, Office of Chief Counsel, Internal Revenue

Service

McAliley, The Honorable Chris M., Magistrate Judge, United States

District Court for the Southern District of Florida

Metzler, Robert W., Reviewer, Appellate Section, Tax Division, United


Miccosukee Tribe of Indians of Florida, Appellant

Moreno, Ignacia, Assistant Attorney General, Environment and

Natural Resources Division, United States Department of Justice



(11th Cir. - No. 11-14825-BB)

C-5 of 7

Morgan Stanley Smith Barney, summonee

Mullarkey, D. Patrick, Chief, Civil Trial Section, Northern Region,

Tax Division, United States Department of Justice

O’Donnell, Sonia Escobio, Jorden Burt LLP, former Attorney for

Appellant

Passarelli, Edward, Assistant Chief, Natural Resources Section,

Environment and Natural Resources Division, U.S.


Peterson, Ann, Attorney, Environment and Natural Resources Division,

U.S. Department of Justice

Pincus, David I, former Assistant Chief, Appellate Section, Tax


Pino, Yinet, Attorney for Appellant

Roman, Bernardo, III, Attorney for Appellant



(11th Cir. - No. 11-14825-BB)

C-6 of 7

Rothenberg, Gilbert S., Chief, Appellate Section, Tax Division, United


Shenkman, Ethan, Deputy Assistant Attorney General, Environment

and Natural Resources Division, U.S. Department of Justice

Sprague, Mary Gay, attorney, Environment and Natural Resources

Division, U.S. Department of Justice

Tenoso, Gaye, Deputy Director, Office of Tribal Justice, United States


Toulou, Tracy, Director, Office of Tribal Justice, United States


Tucker, Andrea S., Attorney, Office of Chief Counsel, Internal Revenue

Service



(11th Cir. - No. 11-14825-BB)

C-7 of 7

Turner, John, Assistant Chief, Indian Resources Section, Environment

and Natural Resources Division, U.S. Department of Justice

United States of America, Appellee

Van Doran, Shelley T., Area Counsel, Office of Chief Counsel, Internal

Revenue Service

Wachovia Bank, summonee

Welsh, Robert L., Attorney, Civil Trial Section, Southern Region, Tax


Williams, Samuel T., Attorney, Office of Chief Counsel, Internal

Revenue Service, Procedure and Administration Division.

Wilson, Rebecca S., Assistant Branch Chief, Employment Tax Branch,

Office of Chief Counsel, Internal Revenue Service


- i - 8405238.11

TABLE OF CONTENTS

PageCertificate of Interested Persons and Corporate Disclosure

Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

Table of contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Table of authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Statement regarding oral argument . . . . . . . . . . . . . . . . . . . . . . . . . xxiii

Statement of jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii

1. The District Court’s jurisdiction . . . . . . . . . . . . . . . . . . . xxiii

2. Appellate jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . xxvii

Statement of the issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Statement of the case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1. Course of proceedings and disposition in

the District Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2. Statement of facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

a. Miccosukee I. The prior litigation involving

the summons issued to Morgan Stanley as

part of a civil investigation of the income tax

liabilities of Tribe member Billy Cypress . . . . . . . . . 3


- ii - 8405238.11

Page

b. Miccosukee II. The instant litigation

involving IRS summonses issued to

third-parties Morgan Stanley, Citibank,

American Express and Wachovia, as

part of the IRS’s civil tax investigation

of the Tribe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

c. The Tribe’s petitions to quash the

summonses and the United States’ motion

to deny the petitions to quash . . . . . . . . . . . . . . . . . . . 7

d. The District Court’s orders rejecting the Tribe’s

sovereign immunity and summons defenses, and

denying the Tribe’s petitions to quash . . . . . . . . . . . 10

3. Standard of review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Summary of argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


- iii - 8405238.11

Page

Argument:

The District Court correctly denied the Tribe’s

petitions to quash the IRS summonses issued to

non-tribal financial institutions . . . . . . . . . . . . . . . . . . . . 15

A. Introduction and background on the IRS’s broad

authority to issue administrative summonses in

support of its responsibility to conduct effective tax

investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

B. The District Court correctly found that the United

States made a prima facie case for denial of the

petitions to quash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

C. The District Court correctly found that the Tribe

failed to meet its heavy burden to show that the

summonses were issued for an improper purpose

or were overbroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

1. Proper purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

2. The summonses are not overbroad . . . . . . . . . . . . . 24


- iv - 8405238.11

Page

D. The District Court correctly held that the Tribe’s

claim of tribal sovereign immunity does not provide

a basis for quashing IRS summonses issued to the

non-tribal third-party financial institutions seeking

their account records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

1. The Tribe’s sovereign immunity claim fails as a

threshold matter because the IRS summonses

were issued to third-party financial institutions

and are not “suits” against the Tribe . . . . . . . . . . . 29

2. The Tribe’s sovereign immunity claim fails for the

additional reason that tribal sovereign immunity

cannot be invoked against the United States or

its agency, the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . 34

E. The Tribe’s argument that Congress has not authorized

the summonses at issue in I.R.C. § 7602(a) is

misconceived . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43


- v - 8405238.11

Page(s)

1. The Tribe’s argument ignores the fact that the

person to which I.R.C. § 7602(a) refers in the

context of this case is a third-party financial

institution, not an Indian tribe . . . . . . . . . . . . . . . . 44

2. The Tribe’s argument conflicts with its

jurisdictional premise . . . . . . . . . . . . . . . . . . . . . . . . 45

3. The Tribe’s statutory analysi is faulty for

additional reasons . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Certificate of compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Certificate of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Statutory addendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62


- vi - 8405238.11

TABLE OF AUTHORITIES

Page(s)

Cases:

Adamowicz v. United States, 531 F.3d 151 (2d Cir. 2008) . . 24, 26

Allen v. Woodford, 543 F. Supp. 2d 1138 (E.D. Cal. 2008) . . . . 30

Alltel Communications, LLC v. Dejordy, __ F.3d __,

2012 WL 1108822 (8th Cir. 2012) . . . . . . . . . . . . . . . . . . . 30

Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531,

107 S. Ct. 1396 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Andrus v. Glover Constr. Co., 446 U.S. 608, 100 S. Ct.

1905 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Barquero v. United States, 18 F.3d 1311 (5th Cir. 1994) . . . . . . 33

Bishop Paiute Tribe v. County of Inyo,

291 F.3d 549 (9th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . 42

Cabazon Indian Casino v. Internal Revenue Service,

57 B.R. 398 (BAP 9th Cir. 1986) . . . . . . . . . . . . . . . . . . . . 50

* Cases or authorities chiefly relied upon are market by asterisks.


- vii - 8405238.11

Page(s)

Cases (continued):

Campbell v. Commissioner, 28 Fed. App’x. 613

(8th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Cherokee Nation v. Georgia, 30 U.S. 1 (1831) . . . . . . . . . . . . . . . 34

* Chickasaw Nation v. United States, 208 F.3d 871

(10th Cir. 2000), aff’d, 534 U.S. 84,

122 S.Ct. 528 (2001) . . . . . . . . . . . . . . . . . . . . . . . . 49-50, 54

Chickasaw Nation v. United States, 534 U.S. 84,

122 S.Ct. 528 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . 49, 53

Circuit City Stores, Inc. v. Adams, 532 U.S. 105,

121 S. Ct. 1302 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Commissioner v. Keystone Consol. Indus., Inc.,

508 U.S. 152, 113 S. Ct. 2006 (1993) . . . . . . . . . . . . . . . . . 46

Commonwealth Nat’l Bank of Dallas v. United States,

665 F.2d 743 (5th Cir. 1982) . . . . . . . . . . . . . . . . . . . . 48, 54



- viii - 8405238.11

Page(s)

Cases (continued):

Cosme v. IRS, 708 F. Supp. 45 (E.D.N.Y. 1989) . . . . . . . . . . . . . 19

Crystal v. United States, 172 F.3d 1141 (9th Cir. 1999) . . . . . . 19

Donaldson v. United States, 400 U.S. 517,

91 S. Ct. 534 (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

* Dugan v. Rank, 372 U.S. 609, 83 S. Ct. 999 (1963),

opinion amended on rehearing on other grounds,

212 F.3d 689 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

* E.E.O.C. v. Karuk Tribe Hous. Auth.,

260 F.3d 1071 (9th Cir. 2001) . . . . . . . . . . . . . . . . . . . 36, 41

E.E.O.C. v. Peabody Western Coal Co.,

400 F.3d 774 (9th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . 35

Elmes v. United States, 264 Fed. App’x. 776

(11th Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Fisher v. United States, 425 U.S. 391, 96 S. Ct.

1569 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31



- ix - 8405238.11

Page(s)

Cases (continued):

* Flandreau Santee Sioux Tribe v. United States,

197 F.3d 949 (8th Cir. 1999) . . . . . . . . . . . . . . . . . . . . 46, 49

* Florida Paraplegic Ass’n, Inc. v. Miccosukee Tribe

of Indians of Fla., 166 F.3d 1126 (11th Cir.

1999) . . . . . . . . . . . . . . . . . . . . 4, 10, 12, 34-35, 37-39, 54-56

Fortney v. United States, 59 F.3d 117 (9th Cir. 1995) . . . . . . . . . 12

Freemanville Water Sys., Inc. v. Poarch Band of Creek

Indians, 563 F.3d 1205 (11th Cir. 2009) . . . . . . . . . . . . . . . 40

Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528,

105 S. Ct. 1005 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . 48, 52

Inyo Cnty., Cal. v. Paiute-Shoshone Indians of the Bishop

Community of the Bishop Colony, 538 U.S. 701,

123 S. Ct. 1887 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . 42, 51

Khan v. United States, 548 F.3d 549 (7th Cir. 2008) . . . . . . . . . 17



- x - 8405238.11

Page(s)

Cases (continued):

Kiowa Tribe of Okla. v. Mfg. Techs, Inc., 523 U.S. 751,

118 S. Ct. 1700 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . 35, 40

La Mura v. United States, 765 F.2d 974 (11th Cir.

1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxvii, 12, 18

Lidas, Inc. v. United States, 238 F.3d 1076

(9th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Marshall Naify Revocable Trust v. United States,

672 F.3d 620 (9th Cir. 2012) . . . . . . . . . . . . . . . . . . . . . . . 38

Mazurek v. United States, 271 F.3d 226 (5th Cir. 2001) . . . . . . 18

Miccosukee Tribe of Indians of Florida v. United States

(Miccosukee I), 730 F. Supp. 2d 1344

(S.D. Fla. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 10, 29

Miccosukee Tribe of Indians v. Lehtinen,

No. 11-39362-CA-21 (Fla. Cir. Ct. 11th Jud. Cir.) . . . . . . . 9



- xi - 8405238.11

Page(s)

Cases (continued):

Mollison v. United States, 481 F.3d 119 (2d Cir. 2007) . . . . . . 18

Nero Trading, LLC v. U.S. Dept. of Treasury, I.R.S.,

570 F.3d 1244 (11th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . 28

Officers for Justice v. Civil Service Com’n, 979 F.2d 721

(9th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Ohio v. Helvering, 292 U.S. 360, 54 S. Ct. 725 (1934) . . . . . . . . 48

Oklahoma Tax Com’n v. Citizen Band Potawatomi

Indian Tribe, 498 U.S. 505, 111 S. Ct. 905 (1991) . . . . . . 40

Oregon Fish & Wildlife Dept. v. Klamath Indian Tribe,

473 U.S. 753, 105 S. Ct. 3420 (1985) . . . . . . . . . . . . . . . . 53

Ponsford v. United States, 771 F.2d 1305 (9th Cir. 1985) . . . . 19

* Quileute Indian Tribe v. Babbitt, 18 F.3d 1456

(9th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Redecker-Barry v. United States, 333 Fed. App’x. 482

(11th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12



- xii - 8405238.11

Page(s)

Cases (continued):

* Reich v. Mashantucket Sand & Gravel, 95 F.3d 174

(2d Cir.1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 39

Reiserer v. United States, 479 F.3d 1160 (9th Cir. 2007) . . . . . 32

Rice v. Rehner, 463 U.S. 713, 103 S. Ct. 3291 (1983) . . . . . . . . 53

S.E.C. v. Jerry T. O’Brien, Inc., 467 U.S. 735,

104 S. Ct. 2720 (1984) . . . . . . . . . . . . . . . . . . . . . . . 33

Sanderlin v. Seminole Tribe of Florida, 243 F.3d 1282

(11th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Santa Clara Pueblo v. Martinez, 436 U.S. 49,

98 S. Ct. 1670 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . 34, 36

Santamaria v. Horsley, 110 F.3d 1352 (9th Cir. 1997) . . . . . . . 41

South Carolina v. Catawba Indian Tribe, Inc.,

476 U.S. 498, 106 S. Ct. 2039 (1986) . . . . . . . . . . . . . . . . 53

Squire v. Capoeman, 351 U.S. 1, 6 S.Ct. 611 (1956) . . . . . . . . . 50



- xiii - 8405238.11

Page(s)

Cases (continued):

* State of Ohio v. Helvering, 292 U.S. 360, 54 S. Ct. 725 (1934).

overruled on other grounds in Garcia v.

San Antonio Metro. Transit Auth., 469 U.S. 528,

105 S. Ct. 1005 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . 48, 52

Steel Co. v. Citizens for a Better Environment,

523 U.S. 83, 118 S. Ct. 1003 (1998) . . . . . . . . . . . . xxvii, 52

* Sugarloaf Funding, LLC v. U.S. Dept. of the Treasury,

584 F.3d 340 (1st Cir. 2009) . . . . . . . . . . . . . . . . . . . . 19, 26

Sweet Pea Marine, Ltd. v. APJ Marine, Inc.,

411 F.3d 1242 (11th Cir. 2005) . . . . . . . . . . . . . . . . . . . xxvii

Tamiami Partners, Ltd. v. Miccosukee Tribe of Indians

of Florida, 999 F.2d 503 (11th Cir. 1993) . . . . . . . . . . . . . 40

* Three Affiliated Tribes of Fort Berthold Reservation

v. Wold Engineering, 476 U.S. 877, 106 S. Ct.

2305 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 40



- xiv - 8405238.11

Page(s)

Cases (continued):

United States EPA v. Gen. Elec. Co., 197 F.3d 592

(2d Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

United States v. Bisceglia, 420 U.S. 141, 95 S. Ct. 915

(1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 57

United States v. Centennial Builders, Inc., 747 F.2d

678 (11th Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

United States v. Cmty. Fed. Sav. & Loan Ass’n,

661 F.2d 694 (8th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . 25

United States v. Dynavac, 6 F.3d 1407 (9th Cir. 1993) . . . . . . . 18

United States v. Ellis, 419 F.3d 1189 (11th Cir. 2005) . . . . . . . 42

United States v. Harris, 628 F.2d 875 (5th Cir. 1980) . . . . . . . 16

United States v. James, 980 F.2d 1314 (9th Cir. 1992) . . . . 40-42

United States v. Juvenile Male 1, 431 F. Supp. 2d

1012 (D. Ariz. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30



- xv - 8405238.11

Page(s)

Cases (continued):

United States v. Lasalle Nat’l Bank, 437 U.S. 298

(1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

* United States v. Linsteadt, 724 F.2d 480 (5th Cir. 1984) 25

United States v. McAnlis, 721 F.2d 334 (11th Cir. 1983) . . . . . 57

United States v. Medlin, 986 F.2d 463 (11th Cir.

1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-18, 25

* United States v. Miller, 425 U.S. 435, 96 S. Ct. 1619

(1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32-33

United States v. Mississippi, 380 U.S. 128, 89 S. Ct. 808

(1965) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

United States v. Monumental Life Ins. Co.,

440 F.3d 729 (6th Cir. 2006) . . . . . . . . . . . . . . . . . . . . 27-28

* United States v. Powell, 379 U.S. 48,

85 S. Ct. 248 (1964) . . . . . . . . . . . . . 8, 10, 12, 17-20, 22, 58



- xvi - 8405238.11

Page(s)

Cases (continued):

* United States v. Red Lake Band of Chippewa Indians,

827 F.2d 380 (8th Cir. 1987) . . . . . . . . . . . . . . . . . . . . 36, 39

United States v. Richards, 631 F.2d 341 (4th Cir. 1980) . . 21-22

United States v. Wheeler, 435 U.S. 313, 98 S. Ct.

1079 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

United States v. White, 853 F.2d 107 (2d Cir. 1988) . . . . . . . . . . 57

United States v. Wyatt, 637 F.2d 293 (5th Cir. 1981) . . . . . . . . 25

* United States. v. Yakima Tribal Court, 806 F.2d 853

(9th Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 41

Wycoff, Estate of v. Commissioner, 506 F.2d 1144

(10th Cir. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Young v. United States Dep’t of Justice, 882 F.2d 633

(2d Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33



- xvii - 8405238.11

Page(s)

Statutes:

12 U.S.C.:

§ 1892b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

§ 3401 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

§ 3401(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

§ 3401(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

§ 3413(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

15 U.S.C. § 78q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

25 U.S.C.:

§ 2710 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

* § 2710(b)(3)(D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 24

§ 2719(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5



- xviii - 8405238.11

Page(s)

Statutes (continued):

Internal Revenue Code of 1986 (26 U.S.C.):

§ 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49, 57

§ 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

§ 3402(r) . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii, 5-6, 11, 56

* § 3402(r)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 24

* § 3406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

§ 6020(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

§ 6041 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

* § 6041(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii, 5, 11, 21

§ 6201(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

§ 6421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

§ 6671(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

§ 6671(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

§ 6675 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46, 49

§ 6721 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23



- xix - 8405238.11

Page(s)



§ 6722 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

§ 7210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

§ 7601 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

* § 7602 . . . . . . . . . . . . . . . . . . . . . . . . xxv, xxvi, 14, 39, 43-46

§ 7602(a) . . . . . . . . . . . . . . . . . . . . . . 16, 21, 23, 43-45, 57-58

§ 7602(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

§ 7602(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 21-22

§ 7602(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

§ 7604 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

§ 7609 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxvi, 45-46

§ 7609(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiv-xxvi, 18, 47

§ 7609(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47, 57

* § 7609(b)(2) . . . . . . . . . . . . . . . . . . xxiv, xxv, 3, 7, 18, 25, 47



- xx - 8405238.11

Page(s)



§ 7609(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

§ 7609(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

§ 7609(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 46-47

* § 7609(h)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiv-xxvii

§ 7610 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

§ 7701 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 50-51

* § 7701(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxv, 47-53

§ 7701(a)(1) . . . . . . . . . . . . . . . . . . . . . . 11, 44-45, 49-51, 53

§ 7701(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

§ 7701(a)(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

§ 7701(a)(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

§ 7701(a)(40) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

* § 7701(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48, 54



- xxi - 8405238.11

Page(s)


28 U.S.C.:

§ 1291 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxviii

§ 2107(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxviii

42 U.S.C.:

§ 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

§ 12188(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Tax Equity and Fiscal Responsibility Act of 1982,

Pub. L. No. 97-248, § 333(a), 96 Stat. 324 . . . . . . . . . . . . 22

U.C.C. § 4-406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Miscellaneous:

William C. Canby, Jr., American Indian Law in a Nutshell

104 (5th ed. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Fed. R. Civ. P. 12(b)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Fed. R. App. P. 4(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxviii

Fed.R.App.P 32.1(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42



- xxii - 8405238.11

Page(s)

Miscellaneous (continued):

Fed.R. Civ.P. 59(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . xxviii, 2, 11

Fed.R.Civ.P. 60(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxviii, 2, 11

Felix S. Cohen, Cohen’s Handbook of Federal Indian

Law §§ 7.05, 636 (2005 ed.) . . . . . . . . . . . . . . . . . . . . . . . . 37

David H. Getches et al., Cases and Materials on

Federal Indian Law, 410 (5th ed. 2005) . . . . . . . . . . . . . . 37

Rev. Rul. 59-354, 1959-2 C.B. 24 . . . . . . . . . . . . . . . . . . . . . . . . 50

Rev. Rul. 67-284, 1967-2 C.B. 55, modified on another

issue, Rev. Rul. 74-13, 1974-1 C.B. 14 . . . . . . . . . . . . . . . 57

* Rev. Rul. 85-194, 1985-2 Cum. Bull. 301 . . . . . . . . . . . . . . . . . . 24



1 Unless otherwise indicated, “Doc.” references are to the documents(continued...)

- xxiii - 8405238.11

STATEMENT REGARDING ORAL ARGUMENT

Counsel for the United States respectfully inform the Court that

they believe that oral argument would be helpful to the disposition of

this appeal because the case has a complex procedural history and the

Court may have questions that are not fully answered in the briefs.

STATEMENT OF JURISDICTION

1. The District Court’s jurisdiction

The Internal Revenue Service (IRS) is conducting a civil

investigation of the Miccosukee Tribe of Indians (the Tribe) regarding

its compliance with the withholding requirements imposed by §§ 3402(r)

and 3406 of the Internal Revenue Code (the Code or I.R.C.), and the

reporting requirements imposed by I.R.C. § 6041(a), for tax periods

2006 through 2009. As part of its investigation, the IRS issued

administrative summonses to Morgan Stanley Smith Barney (“Morgan

Stanley”), Citibank, American Express, and Wachovia Bank – non-

tribal third parties at which the Tribe maintained accounts. (Doc. 16-

1.)1


1(...continued)in the record of the lead case below (S.D. Fla. No. 10–23507–CV),involving a third-party summons served on Morgan Stanley for bankrecords pertaining to the Tribe. The Morgan Stanley case wasconsolidated below with three other cases involving third-partysummonses served on: (1) Citibank (S.D. Fla. No. 10–23508–CV); (2)American Express (S.D. Fla. No. 10–23509–CV); and (3) Wachovia Bank(S.D. Fla. No. 10–23511–CV). (Doc. 8; Doc. 52 at 9.)

- xxiv - 8405238.11

Section 7609(b)(2) of Code allows “any person who is entitled to

notice” of a third-party administrative summons under I.R.C. § 7609(a)

to bring a proceeding to quash the summons. (Emphasis added.) The

IRS determined that the Tribe was “a person entitled to notice” under

I.R.C. § 7609(a) and provided the notices required by that section to the

Tribe. The Tribe filed a petition to quash each of the four IRS

third-party summonses at issue, stating that each petition was filed

“[p]ursuant to 26 U.S.C. Section 7609(b)(2)” and that the District Court

had jurisdiction pursuant to I.R.C. § 7609(h)(1). (Doc. 1 at 1 in each

case.) Upon motion of the Tribe, the District Court consolidated the

four cases. (Doc. 8.)

Under I.R.C. § 7609(h)(1), the District Court has jurisdiction “to

hear and determine any proceedings brought under [§ 7609(b)(2)],” and

I.R.C. § 7609(b)(2) provides that “any person who is entitled to notice of


2 To be properly brought under I.R.C. § 7609(b)(2), a petition must be filed within the 20-day time limit prescribed in I.R.C. § 7609(b)(2)(A), and notice must be provided by registered or certifiedmail within the same 20-day time limit to the person summoned andthe designated IRS office as required by I.R.C. § 7609(b)(2)(B). Becausethe summonses were dated September 10, 2010 (Doc. 1-3 at 1 in eachcase) and the petitions were filed on September 29, 2010 (Docket entry1 in each case), it appears that the filing requirement in I.R.C. § 7609(b)(2)(A) was satisfied. Further, the certificate of service for eachof the petitions indicates that the notice requirement in I.R.C.§ 7609(b)(2)(B) was satisfied by the timely sending of a copy of thepetition to the pertinent entities by certified mail. (Doc. 1 in each caseat “Certificate of Service”.)

- xxv - 8405238.11

a summons under . . . [I.R.C. § 7609(a)] shall have the right to begin a

proceeding to quash [a third-party summons].” (Emphasis added.) It is

the United States’ position that (1) the Tribe is “a person entitled to

notice” under I.R.C. § 7609(a) (emphasis added), (2) as a “person

entitled to notice,” it had “the right to begin a proceeding to quash” the

summons under I.R.C. § 7609(b)(2), and (3) because the petitions to

quash were properly brought2 under I.R.C. § 7609(b)(2), there is

jurisdiction under I.R.C. § 7609(h)(1).

The Tribe, however, now takes a position that would deny the

District Court jurisdiction under I.R.C. § 7609(h)(1). According to the

Tribe, it is not “a person” within the meaning of I.R.C. § 7602 (providing

the IRS with summons authority) or I.R.C. § 7701(a) (providing the


3 The Tribe bases its argument that it is not a “person” for purposesof I.R.C. § 7602 on the fact that the section contains no definition of theword “person” and does not specifically mention Indian tribes. (Br. 28.) Section 7609 also contains no definition of the word “person” and doesnot specifically mention Indian tribes. Thus, under the Tribe’sreasoning, it cannot be a “person” for purposes of I.R.C. § 7609.

4 The Tribe incorrectly cites I.R.C. § 7609(h)(1) as a basis forappellate jurisdiction. That section, by its terms, provides jurisdictiononly for district courts. Further, assuming, contrary to what it actually

(continued...)

- xxvi - 8405238.11

definition of a “person” for purposes of the Internal Revenue Code). (Br.

27-34.) If the Tribe’s analysis is correct, it is equally applicable to I.R.C.

§ 7609.3 This, in turn, means that the Tribe is not “a person entitled to

notice” under I.R.C. § 7609(a) (emphasis added) and that, consequently,

it cannot begin a proceeding to quash the summons under I.R.C. §

7609(b)(2). Accordingly, under the Tribe’s theory, the District Court

does not have jurisdiction under I.R.C. § 7609(h).

Although in our opposition to the Tribe’s motion for a stay pending

appeal filed with this Court (at 15-16), we alerted the Tribe to the

jurisdictional problem presented by its position, the Tribe has not

addressed the problem in its opening brief. Indeed, in its statement of

jurisdiction (Br. 1), it does not even address whether the District Court

had subject matter jurisdiction.4 As the party invoking the District


4(...continued)states, that the Tribe intended to cite I.R.C. § 7609(h)(1) as the basis forthe District Court’s jurisdiction, it is not assisted. As discussed above,the Tribe fails to explain how its not-a-person argument can be squaredwith a claim of subject matter jurisdiction under I.R.C. § 7609(h)(1). Thus, the Tribe either loses on the merits or the case should bedismissed for want of subject matter jurisdiction.

5 See also Argument E.2, infra, explaining why the Tribe’s positionis not correct.

- xxvii - 8405238.11

Court’s jurisdiction, the Tribe has the burden of establishing that the

District Court had subject matter jurisdiction. Steel Co. v. Citizens for a

Better Environment, 523 U.S. 83, 104, 118 S.Ct. 1003, 1017 (1998);

Sweet Pea Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242, 1247 (11th

Cir. 2005). If the Tribe’s position that it is not a “person” is correct,5

then this case should be dismissed because the Tribe has failed to

demonstrate that the District Court had subject matter jurisdiction.

2. Appellate jurisdiction

On August 2, 2011, the District Court issued an order granting

the United States’ motion to deny the petitions to quash. (Doc. 52

(unofficially reported at 2011 WL 3300164)). That order was a final

judgment that disposed of all the claims of all the parties. La Mura v.

United States, 765 F.2d 974, 978 n.5 (11th Cir.1985). On August 30,


- xxviii - 8405238.11

2011, the Tribe filed a motion for reconsideration pursuant to Fed.R.

Civ.P. 59(e) or, in the alternative, Fed.R.Civ.P. 60(b). (Doc. 53.) That

motion was denied by the District Court on September 12, 2011.

(Doc. 55.) On October 10, 2011, the Tribe timely filed a notice of appeal

(Doc. 58) to this Court. See 28 U.S.C. § 2107(b); Fed. R. App.

P. 4(a)(1)(B), 4(a)(4)(iv) & (vi). This Court has jurisdiction to hear the

appeal under 28 U.S.C. § 1291.


IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 11-14825-BB

MICCOSUKEE TRIBE OF INDIANS OF FLORIDA, a Federally recognized Indian Tribe,

Plaintiff-Appellantv.

UNITED STATES OF AMERICA,

Defendant-Appellee

ON APPEAL FROM THE ORDER OF THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

BRIEF FOR THE APPELLEE

STATEMENT OF THE ISSUE

Whether, in denying the Tribe’s petitions to quash four IRS

revenue summonses, the District Court correctly found that the Tribe’s

improper purpose and overbreadth claims did not meet its heavy

burden of rebutting the United States’ prima facie showing that the

summonses were valid, and correctly rejected the Tribe’s claim that

tribal sovereign immunity provided a basis for quashing the


-2- 8405238.11

summonses, which were issued by an agency of the United States to

non-tribal, third-party financial institutions.

STATEMENT OF THE CASE

1. Course of proceedings and disposition inthe District Court

The Tribe filed petitions to quash administrative summonses

issued to Morgan Stanley, Citibank, American Express, and Wachovia

Bank, as part of an IRS civil investigation of the Tribe’s compliance

with certain withholding and reporting requirements of the Code. (Doc.

1 in each case.) The District Court consolidated the four cases. (Doc. 8.)

The United States then filed a motion to deny the petitions to quash,

supported by the Declaration of IRS Revenue Agent James Furnas.

(Docs. 16, 16-1.) After the Tribe filed an opposition (Doc. 33), the

District Court allowed the Tribe to take the deposition of Agent Furnas

and conducted an evidentiary hearing. (Docs. 30, 38-39.) On August 2,

2011, the court issued an order granting the motion of the United

States to deny the petitions to quash. (Doc. 52.)

On August 30, 2011, the Tribe filed a motion for reconsideration

under Fed. R. Civ. P. 59(e) or, in the alternative, under Fed. R. Civ.


-3- 8405238.11

P. 60(b). (Doc. 53.) The motion was denied in an order issued on

September 12, 2011. (Doc. 55.) This appeal by the Tribe followed.

See also footnote 10, infra, discussing the Tribe’s stay motions.

2. Statement of facts

a. Miccosukee I. The prior litigation involving the summons issued to Morgan Stanley aspart of a civil investigation of the income tax liabilities of Tribe member Billy Cypress

Since April 2010, the Tribe has filed a number of petitions seeking

to quash administrative summonses issued by the IRS. See I.R.C.

§ 7609(b)(2). The first petition to quash filed by the Tribe involved an

IRS summons issued in connection with a civil investigation of the

individual income tax liabilities of Billy Cypress, a member of the Tribe.

The summons was issued to a third-party financial institution, Morgan

Stanley, seeking its records relating to the Tribe and Billy Cypress. The

United States moved to deny the Tribe’s petition to quash, and the

Tribe opposed. (Doc. 52 at 2.)

The District Court granted the motion in part and denied it in

part. Miccosukee Tribe of Indians of Florida v. United States

(Miccosukee I), 730 F.Supp.2d 1344 (S.D. Fla. 2010). The court rejected

the Tribe’s tribal sovereign immunity argument based on this Court’s


-4- 8405238.11

pronouncement in Florida Paraplegic Ass’n, Inc. v. Miccosukee Tribe of

Indians of Fla., 166 F.3d 1126, 1135 (11th Cir. 1999), that “[t]ribal

sovereign immunity does not bar suits by the United States,” and on

similar pronouncements of other courts of appeals. Id. at 1344. The

court also rejected the Tribe’s challenges based upon overbreadth and

relevance. Id. at 1352-53. The court, however, concluded that the

Tribe’s allegations of bad faith, improper purpose, and possession of the

information raised factual questions, and that it should be granted a

limited evidentiary hearing. Id. at 1353. The case was subsequently

settled by the parties. Although the Tribe took an interlocutory appeal

from the District Court’s non-final order, this Court subsequently

dismissed the appeal as moot in light of the settlement. (Doc. 52 at 2-3.)

See Order filed by this Court on May 23, 2011 (11th Cir. No. 10-14762-

CC).

b. Miccosukee II. The instant litigation involving IRS summonses issued to

third-parties Morgan Stanley, Citibank,American Express and Wachovia, aspart of the IRS’s civil tax investigation of the Tribe

The Tribe operates a commercial gaming establishment. In

general, distributions of gaming profits made by Indian tribes to their


6 Under I.R.C. § 3402(r)(1), “[e]very person, including an IndianTribe, making a payment to a member of an Indian Tribe from the netrevenues of any class II or class III gaming activity conducted orlicensed by such tribe shall deduct and withhold from such payment atax in an amount equal to such payment’s proportionate share of theannualized tax.” Section 6041(a) of the Code requires informationreturns (i.e., IRS Forms 1099) for certain payments of $600 or more. Section 3406 imposes various backup withholding requirements,including ones pertaining to the reporting requirements under I.R.C.§ 6041(a).

The Indian Gaming Regulatory Act provides that “per capitapayments [of net revenues from gaming activities conducted or licensedby any Indian tribe] are subject to Federal taxation and tribes [must]notify members of such tax liability when payments are made.” 25U.S.C. § 2710(b)(3)(D). See Campbell v. Commissioner, 28 Fed. App’x.613, 615 (8th Cir. 2002); National Indian Gaming Com’n, Bulletin 05-1 (Jan. 18, 2005), www.nigc.gov/reading_room/bulletins. See also 25U.S.C. § 2719(d) (Application of Internal Revenue Code to winningsfrom Indian gaming operations.)

-5- 8405238.11

members are subject to withholding and information reporting

requirements under the Code.6 As noted above, the IRS is currently

conducting an investigation to determine, inter alia, the Tribe’s

compliance with tax withholding requirements imposed by I.R.C.

§§ 3402(r) and 3406, and the information reporting requirements

imposed by I.R.C. § 6041(a), for tax periods 2006 through 2009.

(Doc. 16-1 at 1-2; Doc. 38 at 59; Doc. 52 at 27-30.)

The investigation of the Tribe arose from allegations that the

Tribe was making unreported distributions of cash to tribal members.


-6- 8405238.11

(Doc. 16-1 at 1.) Prior to the instant investigation for the 2006 through

2009 tax years, the IRS examined whether the Tribe was meeting the

reporting and withholding obligations for the 2000 through 2005 tax

years. In the 2000-2005 examination, the IRS determined that the

Tribe failed to make the required withholding on certain taxable

payments of gaming profits under I.R.C. § 3402(r) and backup

withholding under I.R.C. § 3406, and failed to file IRS Forms 945,

Annual Return of Withheld Federal Income Tax, for that withholding.

In addition, the IRS determined that the Tribe failed to file several

Forms 1099 MISC, Miscellaneous Income, on which it was required to

report payments to tribal members as well as payments of non-

employee compensation to service providers. (Doc. 16-1 at 1-2, 14; Doc.

38 at 66; Doc. 52 at 13, 28-29.)

Concerned that the Tribe was continuing to make similar

payments without proper withholding or reporting, the IRS began an

investigation of the Tribe’s compliance with the withholding and

reporting requirements for the 2006-2009 tax periods (the instant

investigation). As part of the investigation, Revenue Agent James

Furnas issued four summonses “[i]n the matter of the Miccosukee Tribe

of Indians of Florida” on September 10, 2010, to Morgan Stanley,


7 Revenue Agent Furnas testified at the evidentiary hearing that,despite his requests, the Tribe had not provided him with documentsrelating to the 2006-2009 tax investigation. (Doc. 38 at 71, 80; see alsoDoc. 52 at 14.) Also, regarding the prior 2000-2005 investigation, AgentFurnas testified that the Tribe provided him with only limitedinformation and he had to develop most of the information from third-party records. (Doc. 38 at 71-72.)

8 Although the third parties have decided not to intervene, they arebound by the District Court’s decision. I.R.C. § 7609(b)(2)(C).

-7- 8405238.11

Citibank, American Express, and Wachovia Bank – non-tribal third

parties at which the Tribe maintained bank and brokerage accounts.

The summonses required those third parties to give testimony and to

produce documents relating to accounts that the Tribe maintained at

the third parties.7 (Doc. 1-3 in each case; Doc. 16-1; Doc. 52 at 4-9, 13-

14.)

c. The Tribe’s petitions to quash thesummonses and the United States’motion to deny the petitions to quash

Citing I.R.C. § 7609(b)(2), the Tribe filed four petitions seeking to

quash the third-party summonses, which the District Court

consolidated. (Doc. 1 in each case; Doc. 8.) Although Morgan Stanley,

Citibank, American Express and Wachovia, as summonees, had the

right to intervene in the Tribe’s case (I.R.C. § 7609(b)(2)(C)), none of

them chose to do so.8


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In its petitions to quash, the Tribe argued, inter alia, that each

summons was unenforceable because: (1) the Tribe is a sovereign entity

entitled to tribal sovereign immunity, (2) the summonses were issued

for an improper purpose, (3) the summonses were overbroad and sought

irrelevant information, and (4) the summonses were issued in bad faith

and constituted an improper fishing expedition against the Tribe.

(Doc. 1 in each case.)

The United States moved to deny the petitions to quash, and

supported its motion with a declaration from Revenue Agent Furnas.

(Docs. 16, 16-1.) It argued that the summonses did not infringe on the

Tribe’s sovereign immunity because they did not seek to compel the

Tribe or its officers to do anything. To the contrary, the United States

argued that the summonses were directed to third parties for bank and

brokerage records within those parties’ custody and control. The United

States also argued that the Tribe’s sovereign immunity could not bar

enforcement of the summonses because that immunity did not extend to

prevent the federal government from exercising its sovereign powers.

Finally, the United States argued that it had made a showing that the

summonses met the “good-faith” elements required for enforcement

under United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254-55


9 Despite its litigating position in the instant case at bar regardingthe tax withholding and reporting requirements, the Tribe, onNovember 28, 2011, filed a malpractice suit against Dexter Lehtinen, itsformer counsel, in Florida state court claiming that Lehtinen hadmisled the Tribe regarding the tax treatment of the funds distributed toits members from gaming profits. See Miccosukee Tribe of Indians v.Lehtinen, No. 11-39362-CA-21 (Fla. Cir. Ct. 11th Jud. Cir.) See also JayWeaver, “Miccosukee Indians: We owe the IRS $26 million and ourlawyer Dexter Lehtinen is to blame,” Miami Herald, Feb. 13, 2012.

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(1964), which are also used in determining the propriety of a summons

challenged in a facially valid petition to quash a third-party summons.

(Docs. 16, 16-1.)

The Tribe opposed the motion to deny the petitions to quash.

(Doc. 33.) In its response, the Tribe reiterated the sovereign immunity

arguments set forth in its petitions to quash. It also reiterated its

arguments that the United States failed to establish that the

investigation has a legitimate purpose, that the United States failed to

establish that the IRS was not already in possession of the requested

documents, and that the summonses were overbroad. Finally, the Tribe

claimed that it was not responsible for withholding or reporting the

funds that it had distributed to tribal members. (Doc. 33 at 4; see Doc.

52 at 14.)9


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d. The District Court’s orders rejectingthe Tribe’s sovereign immunity andsummons defenses, and denying the Tribe’s petitions to quash

i. After holding an evidentiary hearing (Doc. 39) followed by

closing arguments (Doc. 42), the District Court issued an order on

August 2, 2011, granting the United States’ motion to deny the petitions

to quash (Doc. 52). With respect to tribal sovereign immunity,

the District Court stated that the Tribe was essentially seeking

reconsideration of the order it issued in the prior summons case

(Miccosukee I, 730 F.Supp.2d at 1348-49), in which the court had

rejected the Tribe’s sovereign immunity argument based on this Court’s

pronouncement in Florida Paraplegic, 166 F.3d at 1135, that “[t]ribal

sovereign immunity does not bar suits by the United States,” and on

similar pronouncements of other courts of appeals. Citing its ruling in

Miccosukee I, the District Court once again rejected the Tribe’s

sovereign immunity argument. (Doc. 52 at 19-21.)

The District Court further found that the United States had

established a prima facie case for enforcement of the summonses under

Powell, 379 U.S. at 57-58, 85 S.Ct. at 255, and that the Tribe had not

rebutted that showing. (Doc. 52 at 17, 44-45.) The court also found that


10 On October 10, 2011, the Tribe filed a notice of appeal to thisCourt and a motion for a stay pending appeal in the District Court. (Docs. 58-59.) After hearing oral argument (Docs. 68, 70), the DistrictCourt denied the motion on November 8, 2011, finding that the Tribehad not met its heavy burden to show that a stay was warranted(Doc. 69). On February 17, 2012, this Court denied the Tribe’s motion

(continued...)-11- 8405238.11

the tax withholding requirements in I.R. C. § 3402(r) and the

information reporting requirements in I.R.C. § 6041(a) were sufficient

to establish that the IRS’s investigation of the Tribe had a legitimate

purpose. (Id. at 26-27.) Finally, the court found that the documents

requested in the summonses were relevant to the purpose of the IRS’s

inquiry and that the summonses were not overbroad. (Id. at 41.)

ii. The Tribe filed a motion for reconsideration pursuant to Fed.R.

Civ.P. 59(e) or, in the alternative, Fed.R.Civ.P. 60(b). In denying the

motion, the District Court rejected each of the arguments advanced by

the Tribe, including ones relating to tribal sovereign immunity, the

meaning of the word “person” under I.R.C. § 7701(a)(1), and the

propriety of the IRS investigation. (Doc. 55.) With respect to sovereign

immunity, the court explained that “the Tribe’s attempt to assert tribal

sovereign immunity against the sovereign of the federal government is

unsupported by the case law” and that the Tribe was simply relitigating

matters already addressed.10 (Doc. 55 at 6-7.)


10(...continued)in this Court seeking a stay pending appeal, noting that the Tribe hadnot made the showing required under the more liberal of the twocompeting tests for a stay asserted by the parties, viz., that the Tribehad a substantial case on the merits and the equities heavily favored it.

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3. Standard of review

The District Court’s order denying the petitions to quash the IRS

summonses is reviewed under the clearly erroneous standard. La

Mura, 765 F.2d at 982; Redeker-Barry v. United States, 333 Fed. App’x.

482, 484 (11th Cir. 2009); Fortney v. United States, 59 F.3d 117, 119

(9th Cir. 1995). Legal questions related to the denial of the petition are

reviewed de novo. Fortney, 59 F.3d at119. See also Florida Paraplegic,

166 F.3d at 1128 (a district court’s ruling on an issue of a sovereign’s

immunity is reviewed de novo).

SUMMARY OF ARGUMENT

1. The District Court correctly denied the Tribe’s petitions to

quash the IRS summonses. All the “good faith” elements required by

Powell, 379 U.S. at 57-58, 85 S.Ct. at 254-55, were established, and the

defenses raised by the Tribe lacked merit. The IRS issued the

summonses to third-party banks and brokerage firms to determine the


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Tribe’s compliance with certain tax withholding and information

reporting requirements.

The Tribe argues in a conclusory manner that the summonses

were issued for an improper purpose and were overbroad. After

conducting an evidentiary hearing, however, the District Court found

that the IRS had a proper purpose in investigating whether the Tribe

was complying with the withholding and reporting requirements and

that the summonses were not overbroad. The court’s findings are

amply supported by the record and should be upheld.

2. The Tribe’s argument that tribal sovereign immunity bars the

IRS from obtaining the summoned information fails for two distinct

reasons. First, the United States has not filed suit against the

Tribe; the summonses at issue were issued to third-party financial

institutions, not the Tribe. The summonses do not restrain the Tribe or

require it to do anything. Instead, the summonses seek only account

records maintained by non-tribal third parties. Second, even if the

summonses issued to the non-tribal financial institutions could

somehow be viewed as suits against the Tribe, the Tribe still cannot

prevail because the summonses were issued by an agency of the United


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States, and it is well settled that tribal sovereign immunity does not

extend to legal processes initiated by the United States.

In the course of making its sovereign immunity argument, the

Tribe contends that the summons power that Congress granted to the

IRS under I.R.C. § 7602 does not apply in this case because the Tribe is

not a “person” for purposes of that statute. The Tribe’s argument is

misconceived. The “person” that is relevant under I.R.C. § 7602 in the

instant context is the third-party financial institution, not the Tribe.

Moreover, if the Tribe’s not-a-person argument were correct (and, we

submit, it is not), subject matter jurisdiction would be lacking in this

case because “person” status is a prerequisite to jurisdiction under

I.R.C. § 7609(h). In any event, the plain language of I.R.C. §§ 7602 and

7701, and a well-reasoned decision of the Tenth Circuit, demonstrate

that the Tribe’s argument is incorrect.

The District Court’s order denying the Tribe’s petitions to quash

the summonses is correct and should be affirmed.


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Argument

The District Court correctly denied theTribe’s petitions to quash the IRSsummonses issued to non-tribal financialinstitutions

A. Introduction and background on the IRS’s broadauthority to issue administrative summonses insupport of its responsibility to conduct effectivetax investigations

The integrity of the federal tax system depends on taxpayers’

voluntary and forthright compliance with their statutory tax reporting

and filing obligations. Our voluntary tax system is premised on

taxpayer-perceived fairness, which seeks to assure that all taxpayers

pay what Congress has mandated. See United States v. Bisceglia, 420

U.S. 141, 146, 95 S.Ct. 915, 919 (1975). The federal tax system also

imposes obligations on persons conducting transactions with taxpayers

to file information returns about those transactions in certain

circumstances and to withhold taxes on certain payments made to

taxpayers. See footnote 6, supra.

To encourage compliance with the federal tax laws, Congress has

conferred upon the Secretary of the Treasury the responsibility to make

accurate determinations of tax liability and has given him broad

authority to conduct investigations for that purpose. The Commissioner


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of Internal Revenue, as the Secretary’s delegate, is charged with the

duty “to make the inquiries, determinations, and assessments of all

taxes” imposed by the Code. I.R.C. § 6201(a); Donaldson v. United

States, 400 U.S. 517, 523-24, 91 S.Ct. 534, 539 (1971); United States v.

Harris, 628 F.2d 875, 879 (5th Cir. 1980). See also I.R.C. § 7601

(authorizing the IRS to canvass revenue districts for taxable persons

and objects).

Congress provided the Commissioner the summons power to

enable discharge of these responsibilities. The IRS summons provision

is a statute that applies broadly to any person who may have

information relevant to an IRS inquiry. Specifically, I.R.C. § 7602(a)

provides as follows:

For the purpose of ascertaining the correctness of any return,making a return where none has been made, [or] determining the liability of any person for any internal revenue tax . . . [theSecretary may] summon . . . any person having possession, custody, or care of books of account containing entries relating tothe business of the person liable for tax or required to performthe act, or any other person the Secretary may deem proper, toappear . . . and to produce such books, papers, records, or otherdata, and to give such testimony, under oath, as may be relevantor material to such inquiry.


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And, I.R.C. § 7602(b) further specifies that a summons may be issued

for “the purpose of inquiring into any offense connected with the

administration or enforcement of the internal revenue laws.”

When a summoned party fails to comply with a summons, the IRS

can bring an enforcement proceeding in a district court. I.R.C § 7604.

Enforcement suits are summary proceedings in which the United States

need only make a “minimal” showing that the summons was issued in

good faith, i.e., that (1) the investigation will be conducted pursuant to a

legitimate purpose; (2) the information sought may be relevant to that

purpose; (3) the information sought is not already within the

Commissioner’s possession; and (4) the administrative steps required by

the Code have been followed. Powell, 379 U.S. at 57-58, 85 S.Ct. at 248;

United States v. Medlin, 986 F.2d 463, 466 (11th Cir. 1993). In

addition, a summons may not be issued or an enforcement proceeding

begun if a “Justice Department referral” is in effect with respect to the

person whose potential liability is being investigated. I.R.C. § 7602(d);

Khan v. United States, 548 F.3d 549, 554 (7th Cir. 2008).

The burden on the United States to show compliance with Powell

“is a slight one, and may be satisfied by a declaration from the

investigating agent that the Powell requirements have been met.”


11 When confronted with the situation where a person seeking toquash a summons fails to state in his petition any valid reason to quashthe summons, numerous district courts have dismissed petitions toquash by applying a standard that mirrors a Fed. R. Civ. P. 12(b)(6)motion to dismiss for failure to state a claim and without forcing theIRS to establish a prima facie case for enforcement. E.g., Cosme v. IRS,

(continued...)-18- 8405238.11

United States v. Dynavac, 6 F.3d 1407, 1414 (9th Cir. 1993). Accord

Medlin, 986 F.2d at 466; La Mura, 765 F.2d at 979. Once the United

States has made its prima facie showing, the party opposing

enforcement bears the “heavy” burden of showing an abuse of process or

lack of good faith. United States v. Lasalle Nat’l Bank, 437 U.S. 298,

316, 98 S.Ct. 2357, 2367 (1978); Mollison v. United States, 481 F.3d

119, 122-23 (2d Cir. 2007); Mazurek v. United States, 271 F.3d 226, 230

(5th Cir. 2001).

Congress has allowed a taxpayer and other persons entitled to

notice under I.R.C. § 7609(a) to file a petition to quash summonses

issued to third parties in certain circumstances. I.R.C. § 7609(b)(2). In

such a proceeding, the IRS can counterclaim for enforcement, or it can

simply move to dismiss the petition to quash and rely on the summoned

third party to comply with the summons. I.R.C. § 7609(b)(2)(A). Where

the person seeking to quash the summons pleads a facially valid claim

in its petition to quash,11 “the court is guided by the four-part test first


11(...continued)708 F. Supp. 45, 48 (E.D.N.Y. 1989).

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enunciated” in Powell. Ponsford v. United States, 771 F.2d 1305, 1307

(9th Cir. 1985); see also Sugarloaf Funding, LLC v. U.S. Dept. of the

Treasury, 584 F.3d 340, 345 (1st Cir. 2009). If the Government makes

its Powell showing, the person seeking to quash the summons must

meet the same heavy burden that a summons opponent faces in an

enforcement proceeding. Crystal v. United States, 172 F.3d 1141, 1144

(9th Cir. 1999); Sugarloaf Funding, 584 F.3d at 346.

B. The District Court correctly found that the UnitedStates made a prima facie case for denial of thepetitions to quash

Based on the declaration of Revenue Agent Furnas (Doc. 16-1), his

deposition testimony (Doc. 36-1) and his testimony at an evidentiary

hearing (Doc. 38 at 5-96), the United States established that the four

Powell requirements were satisfied. (Doc. 52 at 44.) The testimony

from Agent Furnas showed that the summonses were issued for a

legitimate purpose, namely, investigating whether the Tribe had

complied with withholding and reporting requirements, including those

relating to its casino operations. (Doc. 16-1 at 1-5, 7-8, 11-12, 14;

Doc. 38 at 8, 13, 15-16, 23-27, 39-41, 55-61, 66-67, 70-71, 77-80.) The


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testimony from Agent Furnas further demonstrates that the other three

Powell factors were satisfied, viz. that the information sought may be

relevant to the investigation (Doc. 16-1 at 4, 8, 11, 14), that the IRS

does not already possess the information sought (Doc. 16-1 at 5, 8, 11,

15; Doc. 38 at 30-31, 43-46, 48, 50), and that administrative steps

required by the Code were followed (Doc. 16-1 at 2-3, 5, 8-9, 12). And,

the Furnas declaration also established that there was no criminal

referral to the Justice Department. (Doc. 16-1 at 2.) The District Court

thus had a more than ample basis for finding that the United States

“has met all four Powell factors.” (Doc. 52 at 44.)

C. The District Court correctly found that the Tribefailed to meet its heavy burden to show that thesummonses were issued for an improper purposeor were overbroad

The District Court also found that “the Tribe ha[d] not met its

heavy burden of refuting the United States’s showing or demonstrating

that enforcement would be an abuse of the Court’s process.” (Doc. 52 at

45.) On appeal, the Tribe makes two arguments in asserting that the

District Court’s finding is incorrect: (1) the IRS has no proper purpose

for issuing the summonses (Br. 38-41) and (2) that the summonses are

overbroad. As we demonstrate, infra, these arguments have no merit.


12 Under I.R.C. § 6020(b), the IRS is authorized to make “any returnrequired by any internal revenue law” from such information as it canobtain if any person fails to make a required return. Because thisauthorization extends to “any return,” it includes information returnsrequired by I.R.C. § 6041(a). Although as discussed immediately below,under the revised definition of “purpose” in I.R.C. § 7602(b), the IRSneeded to show only that it was investigating possible violations of theCode, even under the law as it existed at the time Richards wasdecided, the IRS could have properly initiated an investigation for thepurpose of making a return. See Doc. 52 at 22, 26-27, 30 (finding that

(continued...)-21- 8405238.11

1. Proper purpose

According to the Tribe (Br. 39), there are only two legitimate

purposes for issuing an IRS summons: (1) “ascertaining the correctness

of any return” and (2) “determining the liability of any person for any

internal revenue tax.” The Tribe further argues that “the summons

issued in this case was not issued for any of the two proper purposes.”

(Br. 40.) This argument is meritless.

The sole case that the Tribe cites for the proposition that there

are only two proper purposes for an IRS summons, viz., United States v.

Richards, 631 F.2d 341 (4th Cir. 1980), does not stand for that

proposition. Rather, Richards expressly states on the page cited by the

Tribe that, in addition to the two purposes mentioned by the Tribe,

another legitimate purpose of an IRS summons is “making a return

where none has been made.” Id. at 345 (quoting I.R.C. § 7602(a)).12


12(...continued)one of the purposes of the investigation was to determine whetherrequired information returns (i.e., Forms 1099 and 945), were made bythe Tribe.

13 Revenue Agent Furnas stated in his declaration and testified atthe hearing that the IRS had determined in the prior investigation thatthe Tribe had not been complying with the Code’s reportingrequirements, and that one of the purposes of the instant investigationis to determine whether the Tribe’s violations of those reportingrequirements were continuing during the years in issue. (Doc. 38 at 22-27, 66; Doc. 16-1 at 1-2, 14.) The Tribe did not rebut that testimony. Accordingly, the District Court correctly found that the IRS satisfied thefirst Powell factor. (Doc. 52 at 44.)

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Moreover, of particular significance here, the Tribe fails to mention that

subsequent to Richards, Congress amended the Code to add I.R.C. §

7602(b), which provides that the purposes for which an IRS summons

may be issued “include the purpose of inquiring into any offense

connected with the administration or the enforcement of the internal

revenue laws.” Tax Equity and Fiscal Responsibility Act of 1982, Pub.

L. No. 97-248, § 333(a), 96 Stat. 324, 622. Section 7602(b) plainly

authorizes the IRS to inquire into whether the Tribe’s violations of

pertinent provisions of the tax laws during the 2002-2005 years

continued during the years currently under investigation.13


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But even assuming that IRS summonses were restricted to the

two purposes that the Tribe identifies, the summonses at issue here still

would satisfy one of the two purposes. If the Tribe is not complying

with its reporting obligations, it is potentially liable for penalties under

I.R.C. §§ 6721 and 6722. (Doc. 52 at 13; Doc. 38 at 60-61.) Section

6671(a) of the Code provides that the reference to “tax” in I.R.C.

§ 7602(a)’s phrase “determining the liability of any person for any

internal revenue tax” – i.e., one the Tribe’s two legitimate purposes – “is

deemed to also refer to the penalties . . . imposed by [the] subchapter

[containing I.R.C. §§ 6721 and 6722].” Thus, even under the Tribe’s

improper reading of the Code, the summonses at issue pass muster

because the IRS has a legitimate purpose in determining whether the

Tribe is liable for penalties under I.R.C. §§ 6721 and 6722.

The Tribe also argues (Br. 41) in a conclusory manner (and

without record cites) that the United States is seeking to harass the

Tribe and its members by issuing the summonses. The District Court

correctly rejected the Tribe’s spurious contentions on this point as “not

persuasive,” and also found that the Tribe “had not met its heavy

burden of . . . demonstrating that enforcement would be an abuse of the

[c]ourt’s process.” (Doc. 52 at 45.) The Tribe does not set forth any


14 See I.R.C. § 3402(r)(1) (requiring “every person, including an Indian tribe,” to withhold tax from payments of Indian casino profits made to individual members of a tribe); Rev. Rul. 85-194, 1985-2Cum. Bull. 301 (tribes operating bingo establishments are subject toinformation reporting requirements of I.R.C § 6041); see also 25 U.S.C. § 2710(b)(3)(D), and footnote 6, supra.

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developed arguments in its brief challenging the court’s findings on this

point. See Officers for Justice v. Civil Service Com’n, 979 F.2d 721, 726

(9th Cir. 1992). Those findings, therefore, should be upheld on appeal.

The Tribe’s further argument (Br. 10, 41) that the summonses have no

proper purpose because a tribe is not subject to income taxes is beside

the point. The summonses were issued to determine the Tribe’s

compliance with certain withholding and reporting requirements of the

Code. The law is clear that those requirements apply to tribes, and are

thus a proper subject for an IRS tax investigation.14

2. The summonses are not overbroad

As noted above, the Tribe challenges (Br. 41) the District Court’s

finding that the summonses are not overbroad. (Doc. 52 at 40-41.) In

testing for overbreadth, the question is not whether the summons calls

for the production of a large volume of records. Adamowicz v. United

States, 531 F.3d 151, 158 (2d Cir. 2008). Instead, an IRS summons is

overbroad if it “does not advise the summoned party what is required of


15 Because the Tribe is not the summoned party in this case, wequestion whether it has standing to bring an overbreadth challenge.The persons that would be concerned with whether they couldadequately respond to the summonses are the summoned financialinstitutions. The Tribe is not affected if the summonses are notsufficiently specific to permit the summoned parties to respond. Tellingly, the summoned financial institutions have not exercised theirright of intervention under I.R.C. § 7609(b)(2)(C) to make anoverbreadth challenge.

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him with sufficient specificity to permit him to respond adequately to

the summons.” United States v. Medlin, 986 F.2d 463, 467 (11th Cir.

1993) (quoting United States v. Wyatt, 637 F.2d 293, 302 n.16 (5th Cir.

1981)).15 Summonses that are definite in nature and finite in scope, and

that request only information that may be relevant to the IRS’s inquiry,

consistently have been enforced against challenges for overbreadth. See

United States v. Linsteadt, 724 F.2d 480, 483 (5th Cir. 1984); United

States v. Cmty. Fed. Sav. & Loan Ass’n, 661 F.2d 694 (8th Cir. 1981).

In this case, the District Court found that the summonses specify

in detail exactly what materials are requested from the third parties,

the source of those materials, and are limited to records for a finite

period (2006 through 2009). (Doc. 52 at 40-41.) The court accordingly

found that the summonses were not overbroad. Id. at 40.

Despite the court’s findings, the Tribe contends that several of the

requests for records are overbroad. It first cites language from the


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summons issued to Morgan Stanley (Br. 43) requesting “all documents

pertaining to the Miccosukee Tribe in any capacity, whether held jointly

or severally, as trustee, fiduciary, custodian, executor, guardian and/or

beneficiary.” That portion of the Tribe’s quote, however, is not a request

for documents, but, rather, appears in Paragraph 3 of the “Instructions

and Definitions” portion of the Morgan Stanley summons. (Doc. 1-3 at

2.) The actual document requests, which are generally limited to the

time frame 2006 through 2009, advise the third-party summonees what

is required of them with sufficient specificity to permit them to respond

adequately to the summonses. (Doc. 1-3 at 2-3.) See also Sugarloaf

Funding, 584 F.3d at 348 (Inclusion of the term, “all documents” does

not make summonses overbroad as a matter of law, and summonses

using the term “all documents,” but limiting the reference to particular

subject matters, were valid); Adamowicz, 531 F.3d at 158 (upholding

summonses seeking “all documents” for a specific time frame concerning

specific matters or specific transactions).

The remaining part of the Tribe’s quote (Br. 43) is from Paragraph

6 of the Document Request portion of the Morgan Stanley summons.

(See Doc. 1-3 at 3: requesting “[r]ecords maintained of . . .

communications with the Miccosukee Tribe, including all notes,


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memoranda . . ., correspondence, financial statements, background or

credit investigations, and records identifying the stock transfer agent

and dividend disbursing agent.”) Revenue Agent Furnas explained in

undisputed testimony at the evidentiary hearing that there were

hundreds of accounts maintained by the Miccosukee Tribe, that those

accounts raised questions as to whether they were owned for the benefit

of individual tribe members and, if so, whether the Tribe was subject to

information reporting requirements with respect to any distributions

from those accounts. (Doc. 38 at 26-27, 44-45.) Hence, the materials

requested in Paragraph 6 of the Morgan Stanley summons may be

relevant to the tax investigation. Moreover, Paragraph 6 plainly

describes the requested documents in enough detail to inform Morgan

Stanley exactly what is to be produced for the tax periods in issue. The

document request, therefore, is not overbroad. United States v.

Monumental Life Ins. Co., 440 F.3d 729 (6th Cir. 2006), cited by the

Tribe (Br. 41), is readily distinguishable. In that case, Monumental

produced some of the summoned documents, and the IRS had

previously obtained some of the other requested documents from an

earlier investigation of a different company on the same tax issues. 440

F.3d at 731-32. In addition, the court of appeals stated that the facts in


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the Monumental case “exemplifie[d] an exceptional circumstance where

automatic reliance upon an [IRS] agent’s affidavit . . . [was] not

adequate.” Id. at 736. The facts in the case at bar are far removed from

those in Monumental. Notably, Revenue Agent Furnas testified that he

had not received any documentary evidence or testimony from the Tribe

regarding the years under investigation, despite his having requested

such documents from the Tribe (apart from the summonses at issue in

this case). (Doc. 38 at 80; see Doc. 52 at 14.) Moreover, unlike the

situation in Monumental, where there was no evidentiary hearing, the

Tribe’s counsel had an ample opportunity at the evidentiary hearing to

question Revenue Agent Furnas regarding the breadth of the

summonses. (E.g., Doc. 38 at 43-46.) See also Nero Trading, LLC v.

U.S. Dept. of Treasury, I.R.S., 570 F.3d 1244, 1250 (11th Cir. 2009). In

light of Revenue Agent Furnas’s testimony, the District Court was

correct in finding that the requested materials were relevant to the

investigation and that the summonses were not overbroad. (Doc. 52 at

41.)


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D. The District Court correctly held that the Tribe’sclaim of tribal sovereign immunity does notprovide a basis for quashing IRS summonsesissued to the non-tribal third-party financialinstitutions seeking their account records

The Tribe argues on appeal (Br. 12-37), as it did below, that tribal

sovereign immunity prevents the IRS from issuing the summonses that

the Tribe seeks to quash. The Tribe’s sovereign immunity argument

fails for two reasons. First, the summonses at issue were issued to

third-party financial institutions; they were not suits against the Tribe.

Second, the law is well established that tribal sovereign immunity does

not apply to legal processes issued by the United States or its agencies.

1. The Tribe’s sovereign immunity claim failsas a threshold matter because the IRSsummonses were issued to third-partyfinancial institutions and are not “suits”against the Tribe

The District Court, after holding that tribal sovereign immunity

may not be asserted against the United States, held, in the alternative,

that “even if the Tribe could assert sovereign immunity against the

United States, such immunity would be inapplicable here because the

instant matter is not a suit against the [Tribe as a] sovereign.” (Doc. 52

at 20.) See also Miccosukee I, 730 F.Supp.2d at 1349 n.7 (holding to the

same effect in prior summons case involving the Tribe). The District


16 See United States EPA v. Gen. Elec. Co., 197 F.3d 592, 597 (2d Cir.1999) (civil subpoena case; “A judicial proceeding is considered broughtagainst the sovereign if the result could serve ‘to restrain theGovernment from acting, or to compel it to act,’” citing Dugan, 372 U.S.at 620, 83 S.Ct. at 1006), opinion amended on rehearing on othergrounds, 212 F.3d 689 (2000); Allen v. Woodford, 543 F.Supp.2d 1138,1144 (E.D. Cal. 2008) (“The service of a federal subpoena on anemployee of an entity of a tribe is neither a suit, nor one against atribe,” quoting United States v. Juvenile Male 1, 431 F.Supp.2d 1012,1016 (D. Ariz. 2006)); see also Alltel Communications, LLC v. Dejordy,__ F.3d __, 2012 WL 1108822 (8th Cir. 2012) (non-party subpoenasserved on a tribe and a tribal administrator in private civil litigationwhere no competing federal interests are present is a “suit” against atribe that is subject to tribal sovereign immunity).

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Court’s holding is correct and alone is dispositive of the Tribe’s claim

based on tribal sovereign immunity.

“The general rule is that a suit is against the sovereign if the

judgment sought would expend itself on the public treasury or domain,

or interfere with the public administration, or if the effect of the

judgment would be to restrain the Government from acting, or to

compel it to act.” Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006

(1963) (internal quotation marks and citation omitted). Sovereign

immunity, therefore, at most protects an Indian tribe from legal

processes that have some effect on the tribe’s ability to govern itself

either by restraining the tribe or compelling its action.16


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The instant summonses were issued to third-party financial

institutions – Morgan Stanley, Citibank, American Express and

Wachovia – and do not present a question of tribal sovereign immunity.

Those firms are not tribes or tribal officers. Moreover, the IRS has

issued no summons to, and has sought to compel no action from, the

Tribe or its officers regarding this matter. Hence, the summonses are

not proceedings against a sovereign; they do not restrain the Tribe or

require it to do anything. Indeed, the summonses here seek only

account records within the custody and control of the third-party banks

and brokerage firms. Because the service of the summonses is neither a

suit nor a proceeding against the Tribe, there is no basis for the Tribe’s

sovereign immunity claim. Cf. Fisher v. United States, 425 U.S. 391,

397, 96 S.Ct. 1569, 1574 (1976) (for purposes of the Fifth Amendment,

IRS summons issued to taxpayer’s lawyer as a third party did not

“compel” the taxpayer to do anything, including, in that case, to

incriminate himself).

The Tribe’s notion that there is a proceeding against it as a

sovereign is premised on the assumption that the records that the IRS

has summoned from the third parties are “[c]onfidential [f]inancial


17 Banks are required by statute to maintain many of the recordssought in the summonses. See, e.g., 12 U.S.C. § 1892b; see also U.C.C.§ 4-406 (failure of customer to timely examine bank’s statement ofaccount can eliminate customer’s ability to challenge unauthorizedsignatures). A securities broker or dealer is likewise required by law tomaintain records of its securities transactions. See 15 U.S.C. § 78q(Records and reports).

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[r]ecords” of the Tribe. (Br. 17, 19.) The Tribe’s assumption is wrong,

and the District Court correctly rejected it. (Doc. 52 at 45.) As this

Court recognized in United States v. Centennial Builders, Inc., 747 F.2d

678, 683 (11th Cir. 1984), when the IRS directs a summons to “a third

party bank . . . the records belong to the summoned party and not the

taxpayer.”17 See also Reiserer v. United States, 479 F.3d 1160, 1165 (9th

Cir. 2007) (“[T]here is no confidentiality where a third party such as a

bank either receives or generates the documents sought by the IRS.”).

The records that the IRS seeks here “contain only information

voluntarily conveyed to the banks and exposed to their employees in the

ordinary course of business.” United States v. Miller, 425 U.S. 435, 442,

96 S.Ct. 1619, 1623-24 (1976). Thus, in the context of a subpoena for an

individual depositor’s bank accounts, the Supreme Court in Miller

rejected the customer’s argument that the bank records were “merely

copies of personal records . . . made available to the banks for a limited

purpose.” Miller, 425 U.S. at 442, 96 S.Ct. at 1623. See also Young v.


18 In response to the Supreme Court’s decision in Miller, Congressenacted the Right to Financial Privacy Act (RFPA) which createdcertain rights of privacy in financial records of any individual or smallpartnership customer of a financial institution. See 12 U.S.C. § 3401, etseq.; 12 U.S.C. § 3401(4) and (5). Because the Tribe is not an individualor small partnership, the RFPA does not apply. But even if the RFPAdid apply to Indian tribes, the RFPA contains an applicable exception at12 U.S.C. § 3413(c): “Nothing in this chapter prohibits the disclosure offinancial records in accordance with procedures authorized by Title 26.” Consistent with this language, the courts have interpreted the RFPA asexempting IRS summonses provided that the IRS follows appropriateTitle 26 procedures, as the IRS did in this case. See, e.g., Lidas, Inc. v.United States, 238 F.3d 1076, 1083 (9th Cir. 2001); Barquero v. UnitedStates, 18 F.3d 1311, 1318 (5th Cir. 1994).

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United States Dep’t of Justice, 882 F.2d 633, 636 (2d Cir. 1989); 12

U.S.C. § 3413(c).18

The fact that the bank customer in the instant case is an Indian

tribe, as opposed to an individual, does not meaningfully change the

analysis. The relationship between the bank and the customer is still a

contractual one, and the records that are being sought still belong to the

bank. The same is true for brokerage firm records. See S.E.C. v. Jerry

T. O’Brien, Inc., 467 U.S. 735, 742-44, 104 S.Ct. 2720, 2725-26 (1984)

(SEC subpoena issued to third-party brokerage firm pursuant to

securities law investigation did not violate Fourth Amendment right to

privacy or Fifth Amendment right against self-incrimination).


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In sum, the Tribe’s claim of tribal sovereign immunity fails as a

threshold matter because the summonses in this case were issued to

non-tribal third parties and are not suits against the Tribe.

2. The Tribe’s sovereign immunity claim failsfor the additional reason that tribalsovereign immunity cannot be invokedagainst the United States or its agency, the IRS

Even assuming, arguendo, that the summonses addressed to the

third-party banks and brokerage firms may be viewed as suits against

the Tribe by the United States, it is well settled that tribal sovereign

immunity does not extend to suits filed by the United States.

Accordingly, as the District Court correctly held, the Tribe’s contention

that tribal sovereign immunity precludes the IRS from issuing

summonses to non-tribal, third-party firms for their account records

must fail. (Doc. 52 at 18-21, citing Florida Paraplegic, 166 F.3d at

1135).

a. While the United States recognizes the sovereign status of

Indian tribes as “domestic dependent nations,” Cherokee Nation v.

Georgia, 30 U.S. 1, 17 (1831), Congress has plenary authority to limit,

modify or eliminate the powers of local self-government which Indian

tribes otherwise possess. Santa Clara Pueblo v. Martinez, 436 U.S. 49,


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56, 98 S.Ct. 1670, 1675-76 (1978). Thus, Indian tribes retain attributes

of sovereignty, including the power of regulating their internal and

social relations, but remain “subject to ultimate federal control.” United

States v. Wheeler, 435 U.S. 313, 322, 98 S.Ct. 1079, 1085 (1978); see also

Three Affiliated Tribes of Fort Berthold Reservation v. Wold

Engineering, 476 U.S. 877, 890-91, 106 S.Ct. 2305, 2313 (1986) (an

Indian tribe has a “peculiar ‘quasi-sovereign status’” that “is subject to

plenary federal control.”) (citation omitted).

Indian tribes retain sovereign immunity in accordance with the

principles of federal common law. Kiowa Tribe v. Mfg. Tech., Inc., 523

U.S. 751, 754, 759, 118 S.Ct. 1700, 1702, 1705 (1998). This immunity is

not absolute, however, and may not be invoked to prevent actions taken

by the United States. As this Court recognized in Florida Paraplegic,

“[t]ribal sovereign immunity does not bar suits by the United States.”

166 F.3d at 1135 (citation omitted). And, there are numerous other

appellate court decisions that agree with this Court that tribal

sovereign immunity does not extend to suits filed by the United States.

See E.E.O.C. v. Peabody Western Coal Co., 400 F.3d 774, 781 (9th Cir.

2005) (“Tribal sovereign immunity does not ‘act as a shield against the

United States,’ even when Congress has not specifically abrogated tribal


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immunity.” (citation omitted)); E.E.O.C. v. Karuk Tribe Hous. Auth.,

260 F.3d 1071, 1075 (9th Cir. 2001) (“It is true that Indian tribes do, as

a general rule, enjoy sovereign immunity from private lawsuits. Santa

Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106

(1978). Indian tribes do not, however, enjoy sovereign immunity from

suits brought by the federal government.”); Reich v. Mashantucket Sand

& Gravel, 95 F.3d 174, 182 (2d Cir. 1996) (“Tribal sovereign immunity

does not bar suits by the United States.”); United States. v. Yakima

Tribal Court, 806 F.2d 853, 861 (9th Cir. 1986) (“The Tribe’s sovereign

immunity (and the judge’s immunity as a derivative thereof) does not,

however, act as a shield against the United States. Like each of the

fifty states, the Yakima Nation is not immune from suits brought by the

United States. See United States v. Mississippi, 380 U.S. 128, 89 S.Ct.

808 (1965). Thus, the United States is not barred from bringing this

action.”); United States v. Red Lake Band of Chippewa Indians, 827

F.2d 380, 383 (8th Cir. 1987) (“We conclude that just as a state may not

assert sovereign immunity as against the federal government,

Mississippi, 380 U.S. at 140-41, 85 S.Ct. at 814-15, neither may an

Indian tribe, as a dependent nation, do so. Tribal sovereign immunity


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may not be asserted against the United States and we hold therefore

that the district court had jurisdiction over this case.”).

Respected commentators also agree that tribal sovereign

immunity does not apply to suits instituted by the United States. See

Felix S. Cohen, Cohen’s Handbook of Federal Indian Law §§ 7.05, at 636

(2005 ed.) (“Indian nations are not immune from lawsuits filed against

them by the United States . . .”); William C. Canby, Jr., American

Indian Law in a Nutshell 104 (5th ed. 2009) (“Tribes are not immune

from suits by the United States.”); David H. Getches et al., Cases and

Materials on Federal Indian Law, p. 410 (5th ed. 2005) (“Tribal

sovereign immunity defenses are not a shield against suit by the United

States against the tribe.”); 42 CJS Indians § 19 (“Tribal sovereign

immunity may not be interposed against the United States”).

b. The Tribe argues (Br. 24-25) that this Court’s statement in

Florida Paraplegic – that tribal sovereign immunity does not bar suits

by the United States – is dicta because the United States was not a

party to the litigation in Florida Paraplegic. While this Court held in

Florida Paraplegic that Congress did not intend to subject Indian tribes

to suits brought by private parties for violations under the Americans

with Disabilities Act (ADA), it also recognized that tribal sovereign


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immunity did not bar the United States from bringing such actions

against a tribe. 166 F.3d at 1132-35. Hence, the boundaries of tribal

sovereign immunity were squarely before the Court in Florida

Paraplegic, and this Court’s well-reasoned statements on this point

are not dicta. See Marshall Naify Revocable Trust v. United States,

672 F.3d 620, 627 (9th Cir. 2012) (when a panel selects a single line of

reasoning to support its result, the reasoning cannot be ignored as

dicta). At all events, even if this Court’s statements in Florida

Paraplegic with respect to tribal sovereign immunity could be viewed as

dicta insofar as the United States is concerned, those statements were

not ill-considered, off-hand remarks made in passing. Rather, this


19 See Florida Paraplegic, 166 F.3d at 1135, quoting the SecondCircuit’s decision in Reich, 95 F.3d at 182, for the proposition that‘“[t]ribal sovereign immunity does not bar suits by the United States,”’and including Reich’s cite to Quileute Indian Tribe v. Babbitt, 18 F.3d1456, 1459–60 (9th Cir. 1994), for the observation that ‘“tribalsovereignty does not extend to prevent the federal government fromexercising its superior sovereign powers,”’ and 166 F.3d at 1135 n.21,quoting the Eighth Circuit’s decision in Red Lake Band of ChippewaIndians, 827 F.2d at 382, for its holding that ‘“it is an inherentimplication of the superior power exercised by the United States overthe Indian tribes that a tribe may not interpose its sovereign immunityagainst the United States.”’

20 The Tribe’s contention (Br. 24) that this Court’s pronouncementthat tribal sovereign immunity does not bar suits by the United Stateswas based upon particular language in the statute at issue in FloridaParaplegic expressly abrogating its tribal sovereign immunity isunfounded. As explained in footnote 19, supra, this Court relied uponthe decisions of three different circuit courts, which hold that tribalsovereign immunity does not apply to the United States, and providedno indication that the particular statute there at issue played any rolein its pronouncement. But even if the Tribe’s contention were correct,the Tribe would not be assisted. The pertinent portion of the statute atissue in Florida Paraplegic (42 U.S.C. § 12188(b)(1)), authorized theAttorney General to bring suit against “any person or group of persons. . . engaged in a pattern or practice of discrimination.” (Emphasisadded.) See 166 F.3d at 1134 & n.20. And, according to the Tribe, thisstatute passes the “strict” test for abrogating tribal sovereign immunity. The summons statute in the case at bar, I.R.C. § 7602, authorizes theIRS to issue a summons to “any . . . person [it] may deem proper.” Itfollows from the Tribe’s concession that the “person” language in §12188(b)(1) was sufficient to pass muster “[u]nder the strict abrogationtest” (Br. 26) that the “person” language in I.R.C. § 7602 is also sufficient to pass the test.

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Court cited well-reasoned decisions of the Second, Ninth, and Eighth

circuits 19 to support its pronouncement.20


21 See, e.g., Kiowa Tribe of Okla. v. Mfg. Techs, Inc., 523 U.S. 751,118 S.Ct. 1700 (1998) (private suit to recover on promissory noteexecuted by tribe barred by tribal sovereign immunity); Santa ClaraPueblo v. Martinez, 436 U.S. 49, 98 S.Ct. 1670 (1978) (private suit bytribal members against tribe under Indian Civil Rights Act barred bytribal immunity); Oklahoma Tax Com’n v. Citizen Band PotawatomiIndian Tribe, 498 U.S. 505, 111 S.Ct. 905 (1991) (tribal sovereignimmunity precluded state from taxing sales of cigarettes to tribemembers); Freemanville Water Sys., Inc. v. Poarch Band of CreekIndians, 563 F.3d 1205 (11th Cir. 2009) (action brought by rural waterauthority against tribe); Sanderlin v. Seminole Tribe of Florida, 243F.3d 1282 (11th Cir. 2001) (disability discrimination action brought byformer tribe employee); Tamiami Partners, Ltd. v. Miccosukee Tribe ofIndians of Florida, 999 F.2d 503 (11th Cir. 1993) (contract disputebetween Tribe and manager of its bingo gaming facility).

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Other cases cited by the Tribe (Br. 13-16) involve situations where

tribal sovereign immunity was applied against a private party or a state

– a proposition that we do not dispute.21 None of those cases holds that

tribal sovereign immunity applies to suits brought by the United States.

The Tribe’s position ignores the Supreme Court’s pronouncement that

an Indian tribe is subject to plenary federal control. See, e.g., Three

Affiliated Tribes, 476 U.S. at 890-91, 106 S.Ct. at 2313.

The Tribe’s reliance (Br. 17-18) on United States v. James,

980 F.2d 1314 (9th Cir. 1992), is misplaced. First, James is a Ninth

Circuit case and must be read consistently with the numerous Ninth

Circuit cases (decided both before and after James) that have

unambiguously held that tribal sovereign immunity does not apply to


22 The Tribe fails (Br. 18-19) to provide a citation or attach a copy ofthe district court’s unreported order issued in In Re Matter of GrandJury Subpoenas (FGJ-97-7) (S.D. Fla. July 11, 1998), as required by the rules. See Fed.R.App.P 32.1(b). Accordingly, the case should not be

(continued...)-41- 8405238.11

the United States. See, e.g., Yakima Tribal Court, 806 F.2d at 861;

E.E.O.C., 260 F.3d at 1075. Second, James involved a situation

different from the one presented here in which “James [a private-party

criminal defendant] was requesting documents” from an Indian Tribe

through a district court subpoena (as opposed to the summonses issued

by the IRS here for account records of non-tribal third parties). 980

F.2d at 1319. The district court quashed the subpoena in James

because the legal action of the private party would violate tribal

sovereign immunity. In affirming, the Ninth Circuit did not purport to

overrule its prior precedent in Yakima Tribal Court, which holds that

tribal sovereign immunity “does not . . . act as a shield against the

United States.” 806 F.2d at 861. Finally, the three-judge panel rule

would have prevented the panel in James from overruling the Ninth

Circuit’s earlier holding in Yakima Tribal Court that tribal sovereign

immunity does not apply to the United States even if the panel had

attempted to do so. See Santamaria v. Horsley, 110 F.3d 1352, 1355

(9th Cir. 1997).22


22(...continued)considered here. Moreover, the Tribe maintains that the district courtrelied upon the Ninth Circuit’s decision in James, which, as discussedabove, is not on point.

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Bishop Paiute Tribe v. County of Inyo, 291 F.3d 549 (9th Cir.

2002), cited by the Tribe (Br. 18-20), is not instructive. The decision in

that case – which involved a welfare fraud investigation of tribal

employees by a county government – has been vacated in its entirety

(Inyo Cnty., Cal. v. Paiute-Shoshone Indians of the Bishop Community

of the Bishop Colony, 538 U.S. 701, 123 S.Ct. 1887 (2003)) and, thus,

has no authoritative value. United States v. Ellis, 419 F.3d 1189, 1192

(11th Cir. 2005) (“vacated opinions ‘are officially gone. They have no

legal effect whatever. They are void.” (citation omitted)).

In sum, even if the IRS summonses issued to the third-party

banks and brokerage firms could properly be viewed as suits against the

Tribe (which we deny), tribal sovereign immunity still would not bar the

IRS summonses because that immunity does not extend to suits

brought by the United States.


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E. The Tribe’s argument that Congress has notauthorized the summonses at issue in I.R.C.§ 7602(a) is misconceived

Much of the Tribe’s sovereign immunity argument is devoted to

addressing whether there is a statute that passes the so-called “strict

abrogation test” (Br. 20) that is used to abrogate tribal sovereign

immunity when such immunity exists. As we have demonstrated above,

however, the Tribe’s sovereign immunity argument fails because it

erroneously assumes that there is tribal sovereign immunity that needs

to be abrogated or waived in the situation presented by this case. As we

explained in Arguments D.1, supra, no legal proceeding was brought

against the Tribe, and for that reason tribal sovereign immunity is not

even implicated in this case. In any event, such immunity cannot be

asserted against the United States. See Argument D.2, supra. Thus,

there is no reason for Congress to enact a statute that would abrogate

tribal sovereign immunity for the situation presented in this case.

In the course of making its tribal sovereign immunity argument,

the Tribe contends that “the absence of any reference to Indians or

Indian tribes in [I.R.C.] sections 7602, 7210, and 7610 cannot work to

subject the Miccosukee Tribe to the legal process of an IRS summons”

(Br. 27; see also Br. 33), and it argues that therefore I.R.C. § 7602


23 Whether Congress intended that a particular statutory provisionapply to Indian tribes is a completely separate matter from whetherCongress intended to abrogate tribal sovereign immunity.

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does not apply in this case.23 The Tribe does not dispute that I.R.C.

§ 7602(a)(2) broadly authorizes the IRS “[t]o summon . . . any . . . person

the Secretary may deem proper.” (Br. 27.) The Tribe argues, however,

that this broad authorization to issue summonses to any “person” does

not apply to Indian tribes. The Tribe argues that because I.R.C § 7602

does not contain a definition of the word “person,” “the IRC general

definition of the word person found in 26 U.S.C. § 7701(a)(1) would

apply.” (Br. 28.) It then argues that Indian tribes are not included in

that definition of a “person.” (Br. 28-34.) As we shall demonstrate, the

Tribe’s not-a-person argument is misconceived.

1. The Tribe’s argument ignores the fact that theperson to which I.R.C. § 7602(a) refers in thecontext of this case is a third-party financialinstitution, not an Indian tribe

The “persons” that the IRS has actually summoned under I.R.C.

§ 7602(a) in this case are the third-party financial institutions, not the

Tribe. Thus, whether or not the Tribe is a “person” for purposes of

I.R.C. § 7602 should have no bearing upon whether the IRS was

authorized to issue the instant summonses. Rather, to show that the


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summonses were not authorized under I.R.C. § 7602(a), the Tribe would

need to demonstrate that the third-party financial institutions are not

“persons” – something that it has not done and cannot do.

2. The Tribe’s argument conflicts with itsjurisdictional premise

As we explained in our opposition to the Tribe’s stay motion in

this Court (at 15-16), the Tribe’s argument that it is not a “person”

under I.R.C. §§ 7602 and 7701(a)(1) is a non-starter, in any event. This

is so because, if the Tribe’s analysis is correct (which we deny), the

Tribe is also not a “person” for purposes of I.R.C. § 7609, which, in turn,

means that the District Court lacked subject matter jurisdiction over

this action.

The Tribe’s theory is that I.R.C. § 7602 does not contain a

definition of the word “person” and does not specifically mention Indian

tribes, and that, therefore, a court must look to the general definition of

a “person” in I.R.C. § 7701(a)(1) to determine whether an Indian tribe is

a “person” for purposes of I.R.C. § 7602. (Br. 28-29.) And, according to

the Tribe, “the general definition in § 7701(a)(1) of the word persons

does not include Indian tribes” (Br. 29) with the result that Indian

tribes are not persons within the meaning of I.R.C. § 7602.


24 See Flandreau Santee Sioux Tribe v. United States, 197 F.3d 949,952 (8th Cir. 1999) (holding that the term “person” in I.R.C. § 6421 andI.R.C. § 6675 should be interpreted consistently). See generally,Commissioner v. Keystone Consol. Indus., Inc., 508 U.S. 152, 159, 113S.Ct. 2006, 2011 (1993) (“It is a normal rule of statutory construction. . . that identical words used in different parts of the same act areintended to have the same meaning . . . [and] the Code must be given asgreat an internal symmetry and consistency as its words permit. ”)(Internal quotation marks and citations omitted).

25 The Tribe’s argument (Br. 35-37) that the Code does not apply toIndian tribes, if correct, would also negate subject matter jurisdiction. As discussed above, if there is subject matter jurisdiction, it is by virtueof I.R.C. § 7609(h), a provision of the Code.

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Section 7609, however, like I.R.C. §7602, does not contain a

definition of the word “person” and does not specifically mention Indian

tribes. Thus, under the Tribe’s theory, the definition of the word

“person” in I.R.C. § 7701(a)(1) also applies for purposes of I.R.C. § 7609.

If, as the Tribe argues, I.R.C. § 7701(a)(1)’s general definition of a

“person” does not include Indian tribes and causes the Tribe to lack

“person” status for purposes of I.R.C. § 7602, then it also causes the

Tribe to lack “person” status for purposes of I.R.C. § 7609.24

Lack of “person” status under I.R.C. § 7609, in turn, would mean

that the District Court lacked subject matter jurisdiction.25 The Tribe

brought its petitions to quash under I.R.C. § 7609(b)(2) and relied on


26 As discussed in our statement of jurisdiction, supra, the Tribe inits brief on appeal has not identified any other basis for subject matterjurisdiction in the District Court.

27 Section 7609(h) also affords jurisdiction to proceedings broughtunder I.R.C. § 7609(f) or I.R.C. § 7609(g). Those sections apply only toJohn Doe summonses and summonses for which the IRS has petitionednot to give notice. Accordingly, they have no relevance here.

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I.R.C. § 7609(h) as the jurisdictional basis for its petitions.26 (Doc. 1 at

1 in each case.) As relevant here,27 I.R.C. § 7609(h) provides jurisdiction

only if the proceeding is brought under I.R.C. § 7609(b). Because a

petition to quash under I.R.C. § 7609(b) can be brought only by a

“person entitled to notice” under I.R.C. § 7609(a) (emphasis added), the

District Court would lack subject matter jurisdiction over the Tribe’s

petitions to quash the IRS third-party summonses if the Tribe is correct

that it is not a “person.”

3. The Tribe’s statutory analysis is faulty foradditional reasons

a. In any event, our point is not that subject matter jurisdiction is

lacking in this case, but that the Tribe’s statutory analysis produces an

absurd result. A proper analysis of the relevant statutes makes it plain

that the Tribe’s contention that it is not a “person” under I.R.C.


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§ 7701(a) is wrong. Section 7701(a)(1) broadly defines the term “person”

“to mean and include an individual, a trust, estate, partnership,

association, company or corporation.” As signified by its use of the word

“include,” Congress intended that the listed examples of “persons”

under I.R.C. § 7701(a)(1) are only illustrative and not exclusive. Thus,

I.R.C. § 7701(c) provides that the terms “includes” and “including” when

used in a definition in the Code “shall not be deemed to exclude other

things otherwise within the meaning of the term defined.” See State of

Ohio v. Helvering, 292 U.S. 360, 368-370, 54 S.Ct. 725, 726-27 (1934)

(construing broadly the definition of “person” to include a state and the

United States under predecessor statute virtually identical to I.R.C.

§ 7701(a)(1), where statute used the phrase “mean[s] and include[s]” in

its definition), overruled on other grounds in Garcia v. San Antonio

Metro. Transit Auth., 469 U.S. 528, 542, 105 S.Ct. 1005, 1013 (1985);

Commonwealth Nat’l Bank of Dallas v. United States, 665 F.2d 743, 750

(5th Cir. 1982) (use of word “includes” in definition of “person” in I.R.C.

§ 6671(b) encompasses entities not specifically listed therein).

In upholding the imposition of federal wagering taxes on a tribe in

connection with its pull-tab lottery games, the Tenth Circuit has held

that “Congress unambiguously intended for the word ‘person,’ as used


28 The petitioner in Chickasaw did not seek certiorari on the TenthCircuit’s interpretation of I.R.C. § 7701(a)(1). Thus, the Supreme Courtin affirming the Tenth Circuit did not address I.R.C. § 7701(a)(1).

29 The Tribe’s point (Br. 10, 41) that an Indian tribe is not a taxableentity for income tax purposes does not assist it. The income tax isimposed by I.R.C. §§ 1 and 11. Those sections specifically identify individuals and specific entities that are subject to the income tax anddo not employ the catchall term “person.” Moreover, it is well settledthat an Indian tribe is not immune from federal excise taxes andpenalties. See, e.g., Chickasaw Nation v. United States, 534 U.S. 84,122 S.Ct. 528 (2001) (tribe liable for federal excise taxes imposed on itsgambling operations). Flandreau Tribe, 197 F.3d at 951 (tribe is a“person” subject to penalties under I.R.C. § 6675 for seeking anexcessive refund of gasoline excise tax). Indian tribes are also liable foremployment taxes on compensation paid to their employees other thantribal council members. See Cabazon Indian Casino v. InternalRevenue Service, 57 B.R. 398 (BAP 9th Cir. 1986); Rev. Rul. 59-354,

(continued...)-49- 8405238.11

in Section 7701(a)(1), to encompass all legal entities, including Indian

tribes and tribal organizations, that are the subject of rights and

duties.” Chickasaw Nation v. United States, 208 F.3d 871, 879 (10th

Cir. 2000), aff’d, 534 U.S. 84, 122 S.Ct. 528 (2001).28 Otherwise, as the

Tenth Circuit noted, if Indian tribes were held not to be “persons” for

purposes of I.R.C. § 7701(a)(1), then other sections of the Code would be

rendered superfluous. 208 F.3d at 879. Accordingly, contrary to the

Tribe’s contentions, an Indian tribe is a “person” for purposes of I.R.C.

§ 7701(a)(1), and is therefore subject to the summons and other

provisions of the Code.29


29(...continued)1959-2 C.B. 24. Finally, like other citizens, individual tribal membersare generally subject to federal income taxation. E.g., Squire v.Capoeman, 351 U.S. 1, 6, 76 S.Ct. 611, 615 (1956).

30 The Tribe also points (Br. 29) to the fact that, unlike Indian tribes,the terms “partner” and “partnership” are both defined in I.R.C.§ 7701(a)(2) and listed under I.R.C. § 7701(a)(1) as persons. But, if thelist of persons under I.R.C. § 7701(a)(1) was exhaustive, a fiduciary,shareholder, taxpayer, husband and wife, employee, state and the

(continued...)-50- 8405238.11

The Tribe, nonetheless, argues (Br. 29) that Congress did not

intend to include Indian tribes within the meaning of the word “person”

because it specifically defined the term “Indian tribal government” in a

separate subsection of I.R.C. § 7701. See I.R.C. § 7701(a)(40). The

argument lacks merit. As the Tenth Circuit properly observed in

Chickasaw Nation, 208 F.3d at 880, “Congress clearly did not intend for

the list of entities in § 7701(a)(1) to be exhaustive,” and, thus, “the

omission of the phrase ‘Indian tribal government’ [from § 7701(a)(1)] is

not determinative.” In so ruling, the court pointed to the fact that the

terms “State” and “United States” are separately defined in I.R.C.

§§ 7701(a)(9) and (a)(10), and are not among the entities specifically

listed in I.R.C. § 7701(a)(1), yet both have been held to be persons

within the meaning of I.R.C. § 7701(a)(1). Id. at 880, citing Estate of

Wycoff v. Commissioner, 506 F.2d 1144, 1151 (10th Cir. 1974).30


30(...continued)United States (all of which, like Indian tribal governments, are definedin subsequent subsections of I.R.C. § 7701) would also not qualify as“persons” under I.R.C. § 7701(a)(1). The case law, however, is to thecontrary, as we have discussed.

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The Tribe also errs (Br. 30) in its reliance on Inyo County for the

proposition that the term “person” does not include a sovereign. In that

case, the Supreme Court interpreted 42 U.S.C. § 1983, a civil rights

statute that is entirely separate and distinct from the tax statutes at

issue here. Inyo County, 538 U.S. at 708, 123 S.Ct. at 1892. Moreover,

as the District Court properly noted (Doc. 55 at 7-8), the portion of the

opinion in Inyo County quoted by the Tribe for the proposition that a

“person” does not include the sovereign merely discussed the position of

the amicus curiae in that case, and does not reflect the holding of the

Supreme Court in its opinion. 538 U.S. at 709, 123 S.Ct. at 1892. The

Supreme Court explained that when the question is the “qualification of

a sovereign as a ‘person’ who may maintain a particular claim for relief”

provided by a federal statute, the answer “depends not upon a bare

analysis of the word ‘person,’ but on the ‘legislative environment’ in

which the word appears.” 538 U.S. at 711, 123 S.Ct. at 1893 (internal

quotation marks and citations omitted).


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Similarly, the Tribe’s reliance (Br. 31) on State of Ohio to support

its argument that the term “person” does not include a governmental

body is curious. That case held that a state government was a person

under a federal statute taxing the sale of liquor because, inter alia, the

sale of liquor was not a governmental function and the state was not

immune from tax in that situation. State of Ohio, 292 U.S. at 367-71,

54 S.Ct. 725-27. The Supreme Court in Garcia v. San Antonio Metro.

Transit Auth., 469 U.S. 528, 547, 105 S.Ct. 1005, 1015 (1985),

subsequently rejected the distinction between governmental and

proprietary functions and overruled State of Ohio on this point.

Contrary to the Tribe’s contentions, however, the fact remains that the

Supreme Court in State of Ohio construed virtually the same language

at issue here under I.R.C. § 7701(a)(1), and held that the prior statute

contained a definition of “person” broad enough to “embrace[ ]” a state

government. State of Ohio, 292 U.S. at 370, 54 S.Ct. at 727. If I.R.C.

§ 7701(a)(1) is broad enough to embrace a state government, it is also

broad enough to apply to an Indian tribe.

The Tribe is also mistaken in its reliance on the canon of

construction stating that ambiguities in federal laws implicating Indian

rights should be construed to the benefit of Indian interests. (Br. 14,


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26.) Canons of construction are guides for determining Congress’s

intent, but do not mandate a particular conclusion. Chickasaw Nation,

534 U.S. at 94, 122 S.Ct. at 535; Circuit City Stores, Inc. v. Adams, 532

U.S. 105, 115, 121 S.Ct. 1302, 1309 (2001). The Supreme Court on

numerous occasions has stated that “[t]he canon of construction

regarding the resolution of ambiguities in favor of Indians . . . does not

permit reliance on ambiguities that do not exist; nor does it permit

disregard of the clearly expressed intent of Congress.” South Carolina

v. Catawba Indian Tribe, Inc., 476 U.S. 498, 506, 106 S.Ct. 2039, 2044

(1986). Accord, Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531,

555, 107 S.Ct. 1396, 1409 (1987); Oregon Fish & Wildlife Dept. v.

Klamath Indian Tribe, 473 U.S. 753, 774, 105 S.Ct. 3420, 3432 (1985);

Rice v. Rehner, 463 U.S. 713, 732-33, 103 S.Ct. 3291, 3302-03 (1983);

Andrus v. Glover Constr. Co., 446 U.S. 608, 618-619, 100 S.Ct. 1905,

1911 (1980). Because I.R.C. § 7701(a)(1) unambiguously encompasses

all legal entities that are the subject of rights and duties, and because

Indian tribes are such legal entities, the rule of statutory construction


31 In light of the broad scope of the definition of “person” in I.R.C.§ 7701(a)(1), the Tribe’s reliance (Br. 29) on the principle of expressiounius – the mention of one thing implies the exclusion of another – is misplaced. Indeed, the Tribe’s argument that I.R.C. § 7701(a)(1)should be narrowly construed to exclude other terms not specificallylisted, such as an Indian tribe, effectively renders meaningless, asapplied to I.R.C. § 7701(a)(1), the rule set forth in I.R.C. § 7701(c),which provides that the terms “includes” and “including,” when used ina definition contained in the Code, “shall not be deemed to exclude otherthings otherwise within the meaning of the term defined.” SeeCommonwealth Nat’l Bank of Dallas v. United States, 665 F.2d 743, 750(5th Cir. 1982).

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cited by the Tribe is inapplicable. See Chickasaw Nation, 208 F.3d at

880.31

b. The Tribe erroneously argues that “Chickasaw Nation was

wrongly decided” and that the Tenth Circuit’s holding in that case that

the definition of “person” in I.R.C. § 7701(a)(1) includes an Indian tribe

“contradicts the law of this circuit as [articulated] in Florida

Paraplegic.” (Br. 32; see also Br. 31-34.)

First of all, the Tribe exhibits a fundamental misunderstanding of

Chickasaw when it argues that the Tenth Circuit “used the wrong

abrogation test.” (Br. 33.) The Tenth Circuit did not start with the

premise that tribal sovereign immunity bars suits by the United States

(because it does not), and thus did not consider whether the provisions

of the Code at issue in that case abrogated the claimed immunity.


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Rather, the Tenth Circuit addressed the separate question whether

Congress intended the relevant provisions of the Code to apply to the

Indian gaming operation at issue in that case.

In Florida Paraplegic, this Court considered two distinct

questions: (1) whether Congress intended the ADA to apply to tribal

gaming facilities like the one operated by the Tribe, and (2) whether

Congress intended to abrogate the Tribe’s sovereign immunity from suit

by private parties claiming violations of the ADA. In arguing that there

is a conflict between Florida Paraplegic and Chickasaw (see Br. 32-34),

the Tribe does not assert that the Tenth Circuit’s analysis conflicts with

this Court’s reasoning on the first question in Florida Paraplegic, viz.,

the applicability of the ADA (166 F.3d at 1128-30). Instead, the Tribe

mixes apples and oranges by arguing that the Tenth Circuit’s analysis

conflicts with this Court’s analysis of the second question, viz., the

abrogation of tribal sovereign immunity claimed by private parties

(166 F.3d at 1130-34). The Tribe’s argument should therefore be

rejected on this basis alone.

Moreover, this Court’s reasoning in the relevant portion of Florida

Paraplegic indicates that this Court would reach the same outcome as

the Tenth Circuit in Chickasaw Nation – that the term “person” in


32 The case for applying the relevant federal statute is stronger herethan it was in Florida Paraplegic. Here, Congress has expressly statedthat per capita payments to members of an Indian tribe from gamingrevenues are subject to federal taxation and has expressly required atribe making such payments to withhold taxes from the payments andto notify the members of their tax liability. See 25 U.S.C. § 2710; I.R.C.§ 3402(r). This congressional action also undermines the Tribe’sirrelevant (see p. 57, infra) claim, made elsewhere in its brief (Br. 37),that the Code is a general statute interfering with “purely intramuralmatters touching exclusive rights of self-government.” See also FloridaParaplegic, 166 F.3d at 1129-30.

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I.R.C. § 7701(a)(1) includes Indian tribes. As explained above, this

Court need not address whether the Tribe is a “person” under I.R.C. §

7701(a)(1) in this case because the summonses here were not directed to

the Tribe itself. But even if they were, the Tribe has not shown that the

Tenth Circuit’s statutory analysis was flawed. See pp. 48-50, supra.

Had this Court concluded in Florida Paraplegic that the ADA did not

apply to the Tribe’s facility, there might be some basis for the Tribe’s

argument of inconsistency. But, of course, this Court held that the ADA

did apply.32 166 F.3d at 1129-30. And in doing so, this Court expressly

noted that “the Supreme Court has allowed the federal government to

enforce with respect to Indians laws concerning, for example, federal

income taxes . . . on the rationale . . . that Congress meant the laws

under which the federal agencies were acting to apply to Indians.” 166

F.3d at 1130.


33 To the extent the Tribe is arguing that it cannot be liable for anytaxes or penalties under the Code (see Br. 35, 37, 39), its argument isunavailing. First, the argument is premature. The IRS “is not requiredto establish tax liability prior to issuance of a summons.” UnitedStates v. McAnlis, 721 F.2d 334, 336 (11th Cir. 1983). Accord UnitedStates v. Bisceglia, 420 U.S. 141, 145-46, 95 S.Ct. 915, 918-19 (1975);Elmes v. United States, 264 Fed. App’x. 776, 778 (11th Cir. 2008);United States v. White, 853 F.2d 107, 116 (2d Cir. 1988). Moreover, atall events, the argument is incorrect. See authorities cited at footnotes6, 14 and 29, supra, establishing that Indian tribes are subject tovarious provisions of the Code.

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c. The Tribe’s argument that “the IRS cannot show that the IRC

generally applies to the Miccosukee Tribe” (Br. 35; see also Br. 35-38) is

a red herring. The United States has never argued that every provision

of the Code applies to the Tribe. Indeed, as we have previously noted,

I.R.C. §§ 1 and 11 impose the income tax only on specified individuals

and entities, and it has long been the position of the IRS that these

provisions of the Code do not apply to Indian tribes. See Rev. Rul.

67-284, 1967-2 C.B. 55, modified on another issue, Rev. Rul. 74-13,

1974-1 C.B. 14. The provisions of the Code that are significant here are

I.R.C. §§ 7602(a), 7701(a)(1), and 7609(b) & (h).33 As we have

demonstrated, I.R.C. § 7602(a) authorizes the IRS summonses against

the third-party financial institutions that the Tribe has petitioned to

quash under I.R.C. § 7609(b), and the Tribe’s arguments asserting

otherwise have no merit.


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In sum, I.R.C. § 7602(a) authorizes the third-party summonses at

issue in this case, and the District Court correctly found that the United

States met its minimal burden of showing that the summonses satisfy

the Powell critieria. The Tribe has not demonstrated either (1) clear

error in the District Court’s finding that the Tribe had not met the

heavy burden that it faced in asserting its improper purpose and

overbreadth defenses or (2) legal error in the District Court’s rejection

of its tribal sovereign immunity defense. The District Court’s order

denying the Tribe’s petitions to quash therefore should be affirmed.


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CONCLUSION

For the reasons stated above, the order of the District Court

denying the petitions to quash is correct and should be affirmed.

Respectfully submitted,

KATHYRN KENEALLY Assistant Attorney General

TAMARA W. ASHFORD Deputy Assistant Attorney General

s/ John A. Dudeck, Jr.

GILBERT S. ROTHENBERG (202) 514-3361ROBERT W. METZLER (202) 514-3938JOHN A. DUDECK, JR. (202) 514-3026 Attorneys

Of Counsel: Tax Division Department of Justice

WIFREDO A. FERRER Post Office Box 502 United States Attorney Washington, D.C. 20044

MAY 2012


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Certificate of Compliance With Type-Volume Limitation,Typeface Requirements, and Type Style Requirements

1. This brief complies with the type-volume limitation of Fed. R.App. P. 32(a)(7)(B) because:

[X] this brief contains 13,135 words excluding the parts of thebrief exempted by Fed. R. App. P. 32(a)(7)(B)(iii), or

[ ] this brief uses a monospaced typeface and contains [state thenumber of] lines of text, excluding the parts of the brief exempted byFed. R. App. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Fed. R.App. P. 32(a)(5) and the type style requirements of Fed. R. App.P. 32(a)(6) because:

[X] this brief has been prepared in a proportionally spacedtypeface using WordPerfect X3 in 14-point Century Schoolbook, or

[ ] this brief has been prepared in a monospaced typeface using[state name and version of word processing program] with [statenumber of characters per inch and name of type style].

s/ John A. Dudeck, Jr.___________________________________JOHN A. DUDECK, JR. Attorney for the Appellee

Dated: May 2, 2012


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CERTIFICATE OF SERVICE

I hereby certify that on May 2, 2012, I electronically filed the

foregoing brief with the Clerk of the Court for the United States Court

of Appeals for the Eleventh Circuit by using the CM/ECF system.

Counsel for the appellant were served electronically by the Notice of

Docket Activity transmitted by the CM/ECF system.

In addition, I hereby certify that the original and six copies of the

brief were mailed to the Clerk by First-Class Mail on this 2nd day of

May 2012, and that service of this brief was made on counsel for the

appellant on this 2nd day of May 2012, by mailing a copy to them by

First-Class Mail in an envelope properly addressed as follows:

Bernardo Roman, III, Esquire1250 SW 27th Ave., Suite 506Miami, FL 33135

Yinet Pino, Esquire1250 SW 27th Ave., Suite 506Miami, FL 33135

s/ John A. Dudeck, Jr._________________________________

JOHN A. DUDECK, JR.Attorney


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STATUTORY ADDENDUM

Indians (25 U.S.C.):

§ 2710. TRIBAL GAMING ORDINANCES.

* * * * *

(b) Regulation of class II gaming activity; net revenue allocation;audits; contracts.

* * * * *

(3) Net revenues from any class II gaming activitiesconducted or licensed by any Indian tribe may be used tomake per capita payments to members of the Indian tribeonly if--

(A) the Indian tribe has prepared a plan to allocaterevenues to uses authorized by paragraph (2)(B);

(B) the plan is approved by the Secretary as adequate,particularly with respect to uses described in clause (i)or (iii) of paragraph (2)(B);

(C) the interests of minors and other legallyincompetent persons who are entitled to receive any ofthe per capita payments are protected and preservedand the per capita payments are disbursed to theparents or legal guardian of such minors or legalincompetents in such amounts as may be necessary forthe health, education, or welfare, of the minor or otherlegally incompetent person under a plan approved bythe Secretary and the governing body of the Indiantribe; and

(D) the per capita payments are subject to Federaltaxation and tribes notify members of such tax liabilitywhen payments are made.


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* * * * *

(d) Class III gaming activities; authorization; revocation;Tribal-State compact.

(1) Class III gaming activities shall be lawful on Indian lands only if such activities are--

(A) authorized by an ordinance or resolution that--

(i) is adopted by the governing body of the Indiantribe having jurisdiction over such lands,

(ii) meets the requirements of subsection (b) ofthis section, and

(iii) is approved by the Chairman,

* * * * *

(2)(A) If any Indian tribe proposes to engage in, or toauthorize any person or entity to engage in, a class IIIgaming activity on Indian lands of the Indian tribe, thegoverning body of the Indian tribe shall adopt and submit tothe Chairman an ordinance or resolution that meets therequirements of subsection (b) of this section.

* * * * *


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Internal Revenue Code of 1986 (26 U.S.C.) (2009 ed.):

§ 3402. INCOME TAX COLLECTED AT SOURCE.

* * * * *

(r) Extension of withholding to certain taxable payments ofIndian casino profits.--

(1) In general.--Every person, including an Indian tribe, making apayment to a member of an Indian tribe from the net revenues ofany class II or class III gaming activity conducted or licensed bysuch tribe shall deduct and withhold from such payment a tax inan amount equal to such payment's proportionate share of theannualized tax.

(2) Exception.--The tax imposed by paragraph (1) shall not applyto any payment to the extent that the payment, when annualized,does not exceed an amount equal to the sum of--

(A) the basic standard deduction (as defined in section 63(c))for an individual to whom section 63(c)(2)(C) applies, and

(B) the exemption amount (as defined in section 151(d)).

(3) Annualized tax.--For purposes of paragraph (1), the term“annualized tax” means, with respect to any payment, the amountof tax which would be imposed by section 1(c) (determined withoutregard to any rate of tax in excess of the fourth lowest rate of taxapplicable under section 1(c)) on an amount of taxable incomeequal to the excess of--

(A) the annualized amount of such payment, over

(B) the amount determined under paragraph (2).

* * * * *


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(6) Alternate withholding procedures.--At the election of an Indiantribe, the tax imposed by this subsection on any payment made bysuch tribe shall be determined in accordance with such tables orcomputational procedures as may be specified in regulationsprescribed by the Secretary (in lieu of in accordance withparagraphs (2) and (3)).

(7) Coordination with other sections.--For purposes of this chapterand so much of subtitle F as relates to this chapter, payments toany person which are subject to withholding under this subsectionshall be treated as if they were wages paid by an employer to anemployee.

* * * * *

§ 3406. BACKUP WITHHOLDING.

(a) Requirement to deduct and withhold.--

(1) In general.--In the case of any reportable payment, if--

(A) the payee fails to furnish his TIN to the payor inthe manner required,

(B) the Secretary notifies the payor that the TINfurnished by the payee is incorrect,

(C) there has been a notified payee underreportingdescribed in subsection (c), or

(D) there has been a payee certification failure described in subsection (d),

Then the payor shall deduct and withhold from such payment atax equal to the product of the fourth lowest rate of tax applicableunder section 1(c) and such payment.

(2) Subparagraphs (C) and (D) of paragraph (1) apply only tointerest and dividend payments.--Subparagraphs (C) and (D)


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of paragraph (1) shall apply only to reportable interest ordividend payments.

* * * * *

§ 6011. GENERAL REQUIREMENT OF RETURN, STATEMENT, OR LIST.

(a) General rule.--When required by regulations prescribed by theSecretary any person made liable for any tax imposed by this title, orwith respect to the collection thereof, shall make a return or statementaccording to the forms and regulations prescribed by the Secretary.Every person required to make a return or statement shall includetherein the information required by such forms or regulations.

* * * * *

§ 6041. INFORMATION AT SOURCE.

(a) Payments of $600 or more.--All persons engaged in a trade orbusiness and making payment in the course of such trade or business toanother person, of rent, salaries, wages, premiums, annuities,compensations, remunerations, emoluments, or other fixed ordeterminable gains, profits, and income (other than payments to whichsection 6042(a)(1), 6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, andother than payments with respect to which a statement is requiredunder the authority of section 6042(a)(2), 6044(a)(2), or 6045), of $600 ormore in any taxable year, or, in the case of such payments made by theUnited States, the officers or employees of the United States havinginformation as to such payments and required to make returns inregard thereto by the regulations hereinafter provided for, shall rendera true and accurate return to the Secretary, under such regulations andin such form and manner and to such extent as may be prescribed bythe Secretary, setting forth the amount of such gains, profits, andincome, and the name and address of the recipient of such payment.

* * * * *


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§ 6041A. RETURNS REGARDING PAYMENTS OF REMUNERATION FOR SERVICES AND DIRECT SALES

(a) Returns regarding remuneration for services. If--

(1) any service-recipient engaged in a trade or business paysin the course of such trade or business during any calendaryear remuneration to any person for services performed bysuch person, and

(2) the aggregate of such remuneration paid to such personduring such calendar year is $600 or more,

then the service-recipient shall make a return, according to theforms or regulations prescribed by the Secretary, setting forth theaggregate amount of such payments and the name and address ofthe recipient of such payments. For purposes of the precedingsentence, the term “service-recipient” means the person for whomthe service is performed.

* * * * *

§ 6671. RULES FOR APPLICATION OF ASSESSABLE PENALTIES.

(a) Penalty assessed as tax.--The penalties and liabilities providedby this subchapter shall be paid upon notice and demand by theSecretary, and shall be assessed and collected in the same manner astaxes. Except as otherwise provided, any reference in this title to “tax”imposed by this title shall be deemed also to refer to the penalties andliabilities provided by this subchapter.

* * * * *


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§ 6721. FAILURE TO FILE CORRECT INFORMATION RETURNS.

(a) Imposition of penalty.--

(1) In general.--In the case of a failure described in paragraph (2) by any person with respect to an information return, such person shall pay a penalty of $50 for each return with respect to which such a failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $250,000.

(2) Failures subject to penalty.--For purposes of paragraph (1), the failures described in this paragraph are--

(A) any failure to file an information return with the Secretary on or before the required filing date, and

(B) any failure to include all of the information required to be shown on the return or the inclusion of incorrect information.

* * * * *

(e) Penalty in case of intentional disregard.--If 1 or more failuresdescribed in subsection (a)(2) are due to intentional disregard of thefiling requirement (or the correct information reporting requirement),then, with respect to each such failure--

(1) subsections (b), (c), and (d) shall not apply,

(2) the penalty imposed under subsection (a) shall be $100, or, ifgreater--

(A) in the case of a return other than a return requiredunder section 6045(a), 6041A(b), 6050H, 6050I, 6050J,6050K, or 6050L, 10 percent of the aggregate amount of theitems required to be reported correctly,


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(B) in the case of a return required to be filed by section6045(a), 6050K, or 6050L, 5 percent of the aggregate amountof the items required to be reported correctly, and

* * * * *

§ 6722. FAILURE TO FURNISH CORRECT PAYEE STATEMENTS.

(a) General Rule. --In the case of each failure described insubsection (b) by any person with respect to a payee statement, suchperson shall pay a penalty of $50 for each statement with respect towhich such a failure occurs, but the total amount imposed on suchperson for all such failures during any calendar year shall not exceed$100,000.

(b) Failures subject to penalty.--For purposes of paragraph (1), thefailures described in this paragraph are--

(1) any failure to furnish a payee statement on or before thedate prescribed therefor to the person to whom suchstatement is required to be furnished, and

(2) any failure to include all of the information required tobe shown on a payee statement or the inclusion of incorrectinformation.

(c) Penalty in case of intentional disregard.--If 1 or more failuresto which subsection (a) applies are due to intentional disregard of therequirement to furnish a payee statement (or the correct informationreporting requirement), then, with respect to each such failure--

(1) the penalty imposed under subsection (a) shall be $100, or, if greater--

(A) in the case of a payee statement other than astatement required under section 6045(b), 6041A(e) (inrespect of a return required under section 6041A(b)),6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percentof the aggregate amount of the items required to bereported correctly, or


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(B) in the case of a payee statement required undersection 6045(b), 6050K(b), or 6050L(c), 5 percent of theaggregate amount of the items required to be reportedcorrectly, and

(2) in the case of any penalty determined under paragraph (1)--

(A) the $100,000 limitation under subsection (a) shallnot apply, and

(B) such penalty shall not be taken into account in applying such limitation to penalties not determinedunder paragraph (1).

§ 7602. EXAMINATION OF BOOKS AND WITNESSES.

(a) Authority to summon, etc.--For the purpose of ascertaining thecorrectness of any return, making a return where none has been made,determining the liability of any person for any internal revenue tax orthe liability at law or in equity of any transferee or fiduciary of anyperson in respect of any internal revenue tax, or collecting any suchliability, the Secretary is authorized--

(1) To examine any books, papers, records, or other data which may be relevant or material to such inquiry;

(2) To summon the person liable for tax or required to performthe act, or any officer or employee of such person, or any personhaving possession, custody, or care of books of account containingentries relating to the business of the person liable for tax orrequired to perform the act, or any other person the Secretary maydeem proper, to appear before the Secretary at a time and placenamed in the summons and to produce such books, papers,records, or other data, and to give such testimony, under oath, asmay be relevant or material to such inquiry; and


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(3) To take such testimony of the person concerned, under oath,as may be relevant or material to such inquiry.

(b) Purpose may include inquiry into offense.--The purposes forwhich the Secretary may take any action described in paragraph (1), (2),or (3) of subsection (a) include the purpose of inquiring into any offenseconnected with the administration or enforcement of the internalrevenue laws.

* * * * *

§ 7609. SPECIAL PROCEDURES FOR THIRD-PARTY SUMMONSES.

(a) Notice.--

(1) In general.--If any summons to which this section appliesrequires the giving of testimony on or relating to, the production of anyportion of records made or kept on or relating to, or the production ofany computer software source code (as defined in 7612(d)(2)) withrespect to, any person (other than the person summoned) who isidentified in the summons, then notice of the summons shall be given toany person so identified within 3 days of the day on which such serviceis made, but no later than the 23rd day before the day fixed in thesummons as the day upon which such records are to be examined. Suchnotice shall be accompanied by a copy of the summons which has beenserved and shall contain an explanation of the right under subsection(b)(2) to bring a proceeding to quash the summons.

* * * * *


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(b) Right to intervene; right to proceeding to quash.--

(1) Intervention.--Notwithstanding any other law or rule of law,any person who is entitled to notice of a summons under subsection (a)shall have the right to intervene in any proceeding with respect to theenforcement of such summons under section 7604.

(2) Proceeding to quash.--

(A) In general.--Notwithstanding any other law or rule of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to begin a proceeding to quash such summons not later than the 20th day after the day such notice is given in the manner provided in subsection (a)(2). In any such proceeding, the Secretary may seek to compel compliance with the summons.

(B) Requirement of notice to person summoned and toSecretary.--If any person begins a proceeding under subparagraph(A) with respect to any summons, not later than the close of the20-day period referred to in subparagraph (A) such person shallmail by registered or certified mail a copy of the petition to theperson summoned and to such office as the Secretary may directin the notice referred to in subsection (a)(1).

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(h) Jurisdiction of district court; etc.--

(1) Jurisdiction.--The United States district court for the districtwithin which the person to be summoned resides or is found shall havejurisdiction to hear and determine any proceeding brought undersubsection (b)(2), (f), or (g). An order denying the petition shall bedeemed a final order which may be appealed.

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§ 7701. DEFINITIONS.

(a) When used in this title, where not otherwise distinctlyexpressed or manifestly incompatible with the intent thereof--

(1) Person.--The term “person” shall be construed to mean andinclude an individual, a trust, state, partnership, association,company or corporation.

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(2) Partnership and partner.--The term “partnership”includes a syndicate, group, pool, joint venture, or otherunincorporated organization, through or by means of which anybusiness, financial operation, or venture is carried on, and whichis not, within the meaning of this title, a trust or estate or acorporation; and the term “partner” includes a member in such asyndicate, group, pool, joint venture, or organization.

(3) Corporation.--The term “corporation” includes associations, joint-stock companies, and insurance companies.

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(6) Fiduciary.--The term “fiduciary” means a guardian,trustee, executor, administrator, receiver, conservator, or anyperson acting in any fiduciary capacity for any person.

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(8) Shareholder.--The term “shareholder” includes a memberin an association, joint-stock company, or insurance company.

(9) United States.--The term “United States” when used in ageographical sense includes only the States and the District ofColumbia.


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(10) State.--The term “State” shall be construed to includethe District of Columbia, where such construction is necessary tocarry out provisions of this title.

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(14) Taxpayer.--The term “taxpayer” means any personsubject to any internal revenue tax.

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(17) Husband and wife.--As used in sections 682 and 2516, ifthe husband and wife therein referred to are divorced, whereverappropriate to the meaning of such sections, the term “wife” shallbe read “former wife” and the term “husband” shall be read“former husband”; and, if the payments described in such sectionsare made by or on behalf of the wife or former wife to the husbandor former husband instead of vice versa, wherever appropriate tothe meaning of such sections, the term “husband” shall be read“wife” and the term “wife” shall be read “husband.”

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(40) Indian tribal government.--

(A) In general.--The term “Indian tribal government” means the governing body of any tribe, band, community,village, or group of Indians, or (if applicable) Alaska Natives,which is determined by the Secretary, after consultationwith the Secretary of the Interior, to exercise governmentalfunctions.

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(c) Includes and including.--The terms “includes” and “including”when used in a definition contained in this title shall not be deemed toexclude other things otherwise within the meaning of the term defined.

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Documents

Case: 11-14825 Date Filed: 05/02/2012 Page: 1 of 110 11 ... · Case: 11-14825 Date Filed: 05/02/2012 Page: 1 of 110 . Miccosukee Tribe of Indians of Florida v. United States of America