Supreme Court of the United States

“ To be sure, Congress has also recognized that there might be situations, particularly in the collection context, where providing notice could frustrate the IRS’s ability to effectively administer the tax laws. For instance, upon receiving notice that the IRS has served a summons, interested persons might move or hide collectable assets, making the agency’s collection efforts substantially harder. ”

“ In such circumstances, §7609 (c) (2) (D) (i) prevents notice from tipping the balance entirely in favor of the delinquent taxpayer, at the expense of the IRS. But, depending on whose information the summons seeks (for example, an innocent third party’s) , or the nature of the requested records, it might not be reasonable to conclude that providing notice would frustrate the IRS’s tax-collection goal. ”

“ A recipe might help a chef shop for needed groceries, even though more steps are required before dinner will be ready. By conflating activities that help advance a goal with activities sure to accomplish it, petitioners ignore the typical meaning of “in aid of.”
Petitioners next argue that the exception provided in clause (i) must be read narrowly so as to avoid making entirely superfluous the exception found in clause (ii) . Clause (i) excuses notice when the IRS issues a summons “in aid of the collection of ... an assessment made or judgment rendered against” the delinquent taxpayer. ”

“ When they do so, the Government may not be able to collect “an assessment made or judgment rendered against the” taxpayer. §7609 (c) (2) (D) (i) . In those situations, clause (i) may not apply, for a summons cannot be “issued in aid of” an impossible collection effort. §7609 (c) (2) (D) . But clause (ii) may nevertheless permit the IRS to issue unnoticed summonses to collect the “liability” of the taxpayer’s transferee or fiduciary. §7609 (c) (2) (D) (ii) .
IV
Petitioners also emphasize the privacy concerns that led Congress to enact the notice requirement in the first place. ”

“ We think the history highlighted by petitioners supports a contrary conclusion. That Congress proved acutely aware of our prior decisions supports a plain reading not only of the general notice requirement, but also of the specific exception the statute provides.
We do not dismiss any apprehension about the scope of the IRS’s authority to issue summonses. As we have said, “the authority vested in tax collectors may be abused, as all power is subject to abuse.” Bisceglia, 420 U. S., at 146. Tax investigations often involve the pursuit of sensitive records. ”

“ Among other things, the IRS may issue a summons to “determin [e] the liability” of a taxpayer or “any transferee or fiduciary” for unpaid taxes. 26 U. S. C. §7602 (a) . The IRS also may serve a summons to “collec [t] any such liability.” Ibid. These summonses can extend to third parties beyond the taxpayer under investigation. Tiffany Fine Arts, Inc. v. United States, 469 U. S. 310, 315–316 (1985) . Accordingly, the IRS may request the production of “books, papers, records, or other data” from “any person” who possesses information concerning a delinquent taxpayer. ”

“ Notice is not a mere formality. In the context of tax administration, it serves an important function. Providing notice ensures that, when the IRS comes calling, the implicated interests are balanced. ”

“ Consider this case. The IRS’s investigation “suggest [ed] that Mr. Polselli often uses other entities to shield assets from the Internal Revenue Service.” App. to Pet. for Cert. 68a. Bryant suspected, for instance, that Mr. ”