United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
F. ATLAS SENIOR UNITEJ3 STATES DISTRICT JUDGE
Kelly Ann Arismendy, who proceeds pro se, commenced
this civil action by filing a Petition to Quash Summons [Doc.
# 1]. On June 30, 2017, this Court issued a Memorandum and
Order [Doc. # 9] granting the Government's motion to
dismiss for lack of subject matter jurisdiction. Petitioner
now has filed a Motion to Reinstate [Doc. # 13], to which the
Government filed a timely Response [Doc. # 17]. Having
considered the parties' filings, the applicable legal
authorities, and all matters of record, the Court concludes
that Petitioner's Motion to Reinstate should be granted,
that her Petition to Quash Summons should be denied as moot,
and that this action should be dismissed without prejudice.
Summons challenged by Petitioner was issued by the IRS and
directed at J.P. Morgan Chase (“Chase”), seeking
records related to Petitioner's tax
liability. Petitioner has argued consistently that
she was entitled to, and had not received, notice of the
Summons. The Government previously argued, and the Court held
in its Memorandum, that Petitioner was not entitled to notice
because the Summons fit under statutory exceptions:
[The notice requirements] shall not apply to any summons . .
. issued in aid of the collection of (i) an assessment made
or judgment rendered against the person with respect to whose
liability the summons is issued; or (ii) the liability at law
or in equity of any transferee or fiduciary of any person
referred to in clause (i) . . .
26 U.S.C. § 7609(c)(2)(D). See Government
Response [Doc. # 6], at 5 (“The provisions of Section
7609 do not apply to the summons at issue in this civil
action because the summons was issued to JP Morgan Chase Bank
in aid of collection of tax liabilities assessed against
Petitioner”). The Summons invoked this exception on its
face, stating “Under IRC 7609(c)(2)(D), this summons is
exempt from notice requirements pertaining to third party
summonses, ” and specifically requested “data
relating to the tax liability or the collection of the tax
liability … concerning the [Petitioner].”
Summons, at 1.
current briefing argues that the exceptions in Section
7609(c) do not apply to her case because she has no
outstanding tax liability and no legal relationship with any
person with any person against whom a tax assessment has been
made. Memorandum of Law [Doc. # 14] (citing Ip v. United
States, 205 F.3d 1168 (9th Cir. 2000)). The Summons
directed at Chase apparently pertained to a mortgage that
Petitioner obtained from Chase for real property that
Petitioner purchased from Michael Palma. Petitioner
identifies Palma as “the real subject of the IRS
investigation.” Memorandum of Law [Doc. # 14], at 2
¶ 10b. She represents that she has never been married to
Palma, has no joint accounts with Palma, and that Palma is
not on the mortgage. Id.
Government now concedes that Petitioner was entitled to
notice of the Summons at issue. Although the Government
previously relied upon the notice exceptions in Section
7609(c)(2)(D), it now represents that there is no valid
“assessment” against Petitioner, as the statutory
9. The investigation of petitioner includes her potential
liability as an alter-ego/nominee/transferee of a related
taxpayer [Palma] with an assessed liability.
10. However, although the investigation is ongoing, there has
not been an assessment made against petitioner as an
11. Therefore, because there is neither a valid assessment to
be collected against petitioner, nor an assessment made
against petitioner as a transferee, petitioner was entitled
to notice of the summons issued to JP Morgan on March 27,
Response [Doc. # 17], at 3, ¶¶ 9-11.
on the Government's concession that no liability was
assessed against Petitioner and that Petitioner was entitled
to notice, this Court's previous rulings will be vacated.
Government further states that it has not received records
from Chase and, given its failure to comply with the notice
requirements, will not seek enforcement of the Summons.
Response [Doc. # 17], at 1 (“Respondent hereby
withdraws the summons at issue in this case and will not seek
enforcement of the summons”). Because this
representation by the ...