U.S. Court Of Appeals Soundly Rejects
IRS Plea To Soften Ruling In Schulz v IRS
On January 29, 2005, we reported under the headline, “Dramatic Development,” that the U.S. Court of Appeals for the Second Circuit had issued a decision in Schulz v. IRS. The Court held that taxpayers cannot be compelled by the IRS to turn over personal and private property to the IRS, absent a federal court order.
In our January report, we quoted from the decision,
“…absent an effort to seek enforcement through a federal court, IRS summonses apply no force to taxpayers, and no consequence whatever can befall a taxpayer who refuses, ignores, or otherwise does not comply with an IRS summons until that summons is backed by a federal court order…[a taxpayer] cannot be held in contempt, arrested, detained, or otherwise punished for refusing to comply with the original IRS summons, no matter the taxpayer’s reasons, or lack of reasons for so refusing.”
On March 9, 2005, we reported under the headline, “IRS: Gut Schulz v IRS. DOJ: Court’s Opinion Threatens Tax System,” that on behalf of its client, IRS, the DOJ had filed a motion with the Court, requesting that the Court amend its decision in Schulz.
We reported that the DOJ stated in its motion that, “…the Court’s opinion threatens to seriously impede the effective administration and enforcement of the nation’s tax laws.”
We reported that the DOJ chastised the Court for “creating a false impression,” and “misapprehending” and “misunderstanding” and “misstating” and being “inaccurate,” regarding the “consequences that flow from the issuance of an IRS summons.”
On June 29, 2005, the Court issued its much-anticipated decision regarding the government’s motion to amend the Court’s earlier ruling. With a firm reliance on the Court’s primary role of protecting the People’s individual, unalienable Right to Due Process guaranteed by the 5th and 14th Amendments, the court soundly rejected the government’s pleading.
Writing for the three-judge panel, Judge Straub wrote, in part:…