Supreme Court rules: Clarke/IRS summons case

[Famspear]

Holding by the U.S. Supreme Court in a case decided on June 19, 2014:

In a court proceeding with respect to enforcement of a summons issued by the Internal Revenue Service, a bare allegation that the IRS has an improper purpose in issuing the summons does not entitle the taxpayer to examine IRS officials. The taxpayer has a right to conduct that examination “when he points to specific facts or circumstances plausibly raising an inference of bad faith.”

See United States v. Michael Clarke, U.S. Sup. Ct., Case No. 13-301 (June 19, 2014) (Justice Kagan, for a unanimous Court) (reversing a decision of the U.S. Court of Appeals for the Eleventh Circuit).

[Dr. Caligari]

Everybody expected the 11th Circuit to be reversed, since its decision was an outlier that disagreed with every other Circuit, but today's decision reaches a middle ground that is less favorable than the IRS hoped-- the new rule is less taxpayer-friendly than the 11th Circuit, but more taxpayer-friendly than what the law was in the other circuits.