IRS Summons Has No OMB Control Number
Sometimes we overlook the remedies that are the most simple. Eddie Kahn told us about one thing that they completely overlooked involving the Paperwork Reduction Act. That Act says you are not required to disclose anything on any federal form that does not have a valid OMB control number. The Office of Management and Budget is the one who assigns these control numbers and when they do, the number appears in the upper right-hand corner of a form. American Rights Litigators (ARL) always has clients that the IRS sends summonses to where they request books and records. Well, guess what, both the first and third party summonses that the IRS sends out do not have any OMB control numbers on them. One of ARL’s researchers brought this to Eddie’s attention this week after he looked under Title 44 USC § 3512, entitled Public Protection. Here is what it says:



TITLE 44 - PUBLIC PRINTING AND DOCUMENTS

CHAPTER 35 - COORDINATION OF FEDERAL INFORMATION POLICY
Section 3512 - Public protection

(a) Notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information that is subject to this chapter if -

(1) the collection of information does not display a valid control number assigned by the Director in accordance with this chapter; or

(2) the agency fails to inform the person who is to respond to the collection of information that such person is not required to respond to the collection of information unless it displays a valid control number.

(b) The protection provided by this section may be raised in the form of a complete defense, bar, or otherwise at any time during the agency administrative process or judicial action applicable thereto.



As you can see, the Paperwork Reduction Act shows us that the IRS summons is nothing more than a bootleg request for information. Eddie talked to a fellow recently who said he raised this issue back in 1988 in an order to show cause hearing. The judge told him that he still had to give the IRS the information they wanted even after showing him the above section, so he appealed it. When he did it though, the IRS came in and canceled their opposition to his objection. They knew the appeals court would probably overturn the verdict and they didn’t want to have a precedent set, which is why they did it. This is important to know for the summons is the IRS’ key instrument that they use to gather information on us at the examination level. It has no force and effect at all if we just use the proper argument.


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U.S. Court of Appeals Rules IRS Cannot Apply Force Against a Tax Payer Without A Court Order Taxpayers Free To Ignore An IRS Summons Queensbury, NY
– On January 25, 2005, the U.S. Court of Appeals for the Second Circuit held that taxpayers cannot be compelled by the IRS to turn over personal and private property to the IRS, absent a federal court order.

Quoting from the decision
(Schulz v. IRS, case number 04-0196-cv),
“...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.”