Quick take: Today’s decision in United States v. Clarke
on Jun 19, 2014 at 11:44 am
The first opinion this morning came in United States v. Clarke, argued on April 23. In an extremely brief and unanimous opinion by Justice Elena Kagan, the Court held that a taxpayer who wants to question Internal Revenue Service (IRS) agents about their motives for issuing a summons may do so if he can point to “specific facts or circumstances plausibly raising an inference of bad faith.” It is not enough, as the Eleventh Circuit held below, to simply allege that the agents had an improper purpose, without providing any facts to support that allegation. The rule it adopted today, the Court explained, strikes a balance between allowing taxpayers to challenge the summons in an adversarial process while at the same time giving the IRS enough power to carry out its investigations: it “will ensure inquiry where the facts and circumstances make inquiry appropriate, without turning every summons dispute into a fishing expedition for official wrongdoing.”
Because the lower court had not applied this standard, the Court sent the case back to the Eleventh Circuit – leaving open at least the possibility that, although they lost at the Supreme Court, Clarke and the other taxpayers could still ultimately prevail on this issue below. Susan Morse will have a more detailed analysis for us soon.