Polselli v. IRS

                   PRELIMINARY PRINT

             Volume 598 U. S. Part 2
                             Pages 432–448




       OFFICIAL REPORTS
                                    OF


   THE SUPREME COURT
                                May 18, 2023


Page Proof Pending Publication


                   REBECCA A. WOMELDORF
                           reporter of decisions




    NOTICE: This preliminary print is subject to formal revision before
  the bound volume is published. Users are requested to notify the Reporter
  of Decisions, Supreme Court of the United States, Washington, D.C. 20543,
  [email protected], of any typographical or other formal errors.
432                      OCTOBER TERM, 2022

                                  Syllabus


POLSELLI et al. v. INTERNAL REVENUE SERVICE

certiorari to the united states court of appeals for
                  the sixth circuit
      No. 21–1599. Argued March 29, 2023—Decided May 18, 2023
The Internal Revenue Service has the power to issue summonses to pursue unpaid federal taxes and the people who owe them. When the IRS
  issues a summons, it must generally provide notice to any person identifed in the summons, 

(a)(1). Anyone entitled to such
  notice may then bring a motion to quash the summons, § 7609(b)(2)(A).
  But when the IRS issues a summons “in aid of the collection of . . . an
  assessment made . . . against the person with respect to whose liability
  the summons is issued,” no notice is required, § 7609(c)(2)(D)(i).
     In this case, the IRS entered official assessments against Remo
  Polselli for more than $2 million in unpaid taxes and penalties. Revenue Offcer Michael Bryant issued summonses to three banks seeking
  fnancial records of several third parties, including petitioners, who then
  moved to quash the summonses. The District Court concluded that,
Page Proof Pending Publication
  under § 7609(c)(2)(D)(i), no notice was required and that petitioners
  therefore could not bring a motion to quash. The Sixth Circuit affrmed, fnding that the summonses fell squarely within the exception in
  § 7609(c)(2)(D)(i) to the general notice requirement.
Held: The Court rejects petitioners' argument that the exception to the
 notice requirement in § 7609(c)(2)(D)(i) applies only if the delinquent taxpayer has a legal interest in the accounts or records summoned by the
 IRS. Pp. 438–445.
    (a) The statute sets forth three conditions to exempt the IRS from
 providing notice in circumstances like these. First, a summons must
 be “issued in aid of . . . collection,” § 7609(c)(2)(D). Second, it must aid
 the collection of “an assessment made or judgment rendered,” § 7609(c)
 (2)(D)(i). Third, a summons must aid the collection of assessments or
 judgments “against the person with respect to whose liability the summons is issued,” § 7609(c)(2)(D)(i). The statute does not mention legal
 interest, much less require that a taxpayer maintain such an interest
 for the exception to apply. Pp. 438–439.
    (b) Petitioners' arguments in support of their proposed legal interest
 test do not convince the Court to abandon an ordinary reading of the
 notice exception. Petitioners frst contend the phrase “in aid of the
 collection” refers only to inquiries that “directly advance” the IRS's collection efforts, which a summons will not accomplish unless it is targeted
                        Cite as: 

 (2023)                      433

                                  Syllabus

  at an account containing assets that the IRS can collect to satisfy the
  taxpayer's liability. This argument ignores the typical meaning of “in
  aid of.” To “aid” means “[t]o help” or “assist.” A summons that may
  not itself reveal taxpayer assets that can be collected may nonetheless
  help the IRS fnd such assets.
     Petitioners next argue that if § 7609(c)(2)(D)(i) is read to exempt from
  notice every summons that helps the IRS collect an “assessment”
  against a delinquent taxpayer, there would be no work left for the second exception to notice, found in § 7609(c)(2)(D)(ii), to do. Clause (ii)
  exempts from notice any summons “issued in aid of the collection
  of . . . the liability at law or in equity of any transferee or fduciary of
  any person referred to in clause (i).” The two clauses apply in different
  circumstances: clause (i) applies upon an assessment, while clause (ii)
  applies upon a fnding of liability. In addition, clause (i) concerns delinquent taxpayers, while clause (ii) concerns transferees or fduciaries.
  As a result, clause (ii) permits the IRS to issue unnoticed summonses
  to aid its collection from transferees or fduciaries before it makes an
  offcial assessment of liability. Pp. 439–443.
     (c) The Court does not dismiss any apprehension about the scope of
  the IRS's power to issue summonses and does not defne the precise
  contours of the phrase “in aid of the collection.” The briefng by the
Page Proof Pending Publication
  parties and the question presented focus only on whether § 7609(c)
  (2)(D)(i) requires that a taxpayer maintain a legal interest in records
  summoned by the IRS. The answer is no. Pp. 443–445.

, affrmed.

  Roberts, C. J., delivered the opinion for a unanimous Court. Jackson, J., fled a concurring opinion, in which Gorsuch, J., joined, post, p. 445.

  Shay Dvoretzky argued the cause for petitioners. With
him on the briefs were Parker Rider-Longmaid, Kyser
Blakely, Raza Rasheed, Maur ice A. Rose, and Jer ry
Abraham.
  Ephraim A. McDowell argued the cause for respondent.
With him on the brief were Solicitor General Prelogar, Deputy Assistant Attorney General Hubbert, Deputy Solicitor
General Gannon, Francesca Ugolini, and Michael J.
Haungs.*
  *Briefs of amici curiae urging reversal were fled for the Center for
Taxpayer Rights et al. by Melissa Arbus Sherry, Amy Feinberg, Eric J.
Konopka, and David D. Cole; for the Chamber of Commerce of the United
434                      POLSELLI v. IRS

                         Opinion of the Court

  Chief Justice Roberts delivered the opinion of the
Court.
   For as long as Americans have had to pay taxes, at least
some have tried to avoid them. And for as long as Americans have avoided taxes, the Internal Revenue Service and
its predecessors have tried to collect them. As an old joke
goes: “I believe we should all pay taxes with a smile. I tried
but they wanted cash.”
   Congress has given the IRS considerable power to go after
unpaid taxes. One tool at the Service's disposal is the authority to summon people with information concerning a delinquent taxpayer. But to safeguard privacy, the IRS is
generally required to provide notice to anyone named in a
summons, who can then sue to quash it. Today's case concerns an exception to that general rule.

                                  I
Page     Proof
 To pursue         Pending
           unpaid taxes            Publication
                        and the people who owe them,
“Congress has granted the Service broad latitude to issue
summonses.” United States v. Clarke, 

, 250
(2014). Among other things, the IRS may issue a summons
to “determin[e] the liability” of a taxpayer or “any transferee
or fduciary” for unpaid taxes. 

(a). The
IRS also may serve a summons to “collec[t] any such liability.” 

 These summonses can extend to third parties
beyond the taxpayer under investigation. Tiffany Fine
Arts, Inc. v. United States, 

, 315–316 (1985).
Accordingly, the IRS may request the production of “books,
papers, records, or other data” from “any person” who

States of America by Carter G. Phillips and William R. Levi; for the
Institute for Justice by Paul Sherman, Joshua Windham, and Robert E.
Johnson; for the National Taxpayers Union Foundation by Tyler Martinez
and Joseph D. Henchman; and for The Rutherford Institute et al. by Michael B. Kimberly, Ethan H. Townsend, John W. Whitehead, Clark M.
Neily III, and Matthew P. Cavedon.
                   Cite as: 

 (2023)             435

                      Opinion of the Court

possesses information concerning a delinquent taxpayer.
§ 7602(a)(2).
   Given the breadth of this power, Congress has imposed
certain safeguards. The IRS must generally give “notice of
the summons” to “any person . . . identifed in the summons.”
§ 7609(a)(1). Anyone entitled to notice can bring a motion
to quash the summons. § 7609(b)(2)(A). And the Internal
Revenue Code provides district courts with “jurisdiction to
hear and determine any proceeding” concerning a motion to
quash, § 7609(h)(1), thereby waiving the sovereign immunity
of the United States, see FAA v. Cooper, 

(2012).
   There are, however, exceptions to the notice requirement.
As relevant, the IRS need not provide notice to a person
“who is identifed in the summons,” § 7609(a)(1), if the summons is:
       “issued in aid of the collection of—
Page Proof Pending Publication
       “(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 fduciary of any person referred to in clause (i).”
    § 7609(c)(2)(D).
   In other words, the IRS may issue summonses both to determine whether a taxpayer owes money and later to collect
any outstanding liability. When the IRS conducts an investigation for the purpose of “determining the liability” of a
taxpayer, § 7602(a), it must provide notice, § 7609(a)(1). But
once the Service has reached the stage of “collecting any
such liability,” § 7602(a)—which is a distinct activity—notice
may not be required, § 7609(c)(2)(D).

                                II
  For multiple years between 2005 and 2017, Remo Polselli
underpaid his federal taxes. App. to Pet. for Cert. 65a–66a.
436                    POLSELLI v. IRS

                      Opinion of the Court

After investigating, the IRS determined that Mr. Polselli
was liable for the unpaid amounts and other penalties, and
entered offcial assessments against him totaling more than
$2 million. Id., at 66a. Revenue Offcer Michael Bryant
then set out to collect the money, and he developed a few
leads in his search for assets that Mr. Polselli may have been
concealing. Bryant focused on bank accounts belonging to
Mr. Polselli's wife, petitioner Hanna Karcho Polselli. Ibid.
Bryant also knew that Mr. Polselli had paid nearly $300,000
toward part of his outstanding tax liability from an account
owned by Dolce Hotel Management, LLC, and surmised that
Mr. Polselli might have control over funds belonging to that
company. Id., at 67a. To further his investigation, Bryant
issued a summons under § 7602 to the law frm Abraham &
Rose, PLC, where Mr. Polselli had long been a client. Ibid.
But the frm produced no records in response, stating that it
“did not retain any of the documents requested.” Ibid.
Page Proof Pending Publication
   Bryant then issued several additional summonses seeking
records concerning Mr. Polselli. Bryant issued one summons to Wells Fargo, requesting the fnancial records of both
Mrs. Polselli and Dolce Hotel Management. Id., at 70a–71a.
He also issued summonses to JP Morgan Chase and Bank of
America, seeking among other things “[c]opies of all bank
statements” relating to Mr. Polselli and petitioners Jerry R.
Abraham, P. C., and Abraham & Rose, PLC. Id., at 78a–
79a, 85a–86a. Bryant did not provide notice to any of the
third parties named in the three summonses. But the banks
did, and Mrs. Polselli, Jerry R. Abraham, and Abraham &
Rose fled motions to quash in Federal District Court.
   The District Court dismissed the case for lack of subjectmatter jurisdiction, reasoning that the IRS did not need
to provide notice. Polselli v. Uni ted States, 

, *4 (ED Mich., Nov. 16, 2020). The District Court
credited Bryant's assertions that “the purpose of his investigation [was] to locate assets to satisfy Mr. Polselli's existing
assessed federal tax liability and that the IRS issued the
                    Cite as: 

 (2023)             437

                       Opinion of the Court

summonses in question to aid in the collection of these assessed liabilities.” 

 Because the Code excluded petitioners from the required notice, there was no waiver of sovereign immunity, and the District Court therefore lacked
jurisdiction to entertain the motions to quash. 

.
   The Sixth Circuit affrmed in a divided opinion, reasoning
that no notice was required because “the summonses at issue
fall squarely within the exception listed in § 7609(c)(2)(D)(i).”
Polselli v. Department of Treasury–IRS, 

, 623
(2022). Before the Sixth Circuit, petitioners had argued in
favor of a rule—previously adopted by the Ninth Circuit—
requiring that a taxpayer have “some legal interest or title
in the object of the summons” for the notice exception to
apply. Ip v. United States, 

 (2000). To
decide whether a taxpayer maintains a suffcient legal interest “in the object of the summons,” the Ninth Circuit considers “whether there was an employment, agency, or ownerPage Proof Pending Publication
ship relationship between the taxpayer and third party.”
Viewtech, Inc. v. United States, 

 (2011).
But the Sixth Circuit below rejected the Ninth Circuit's legal
interest test, concluding that it was contrary to the plain
language of § 7609(c)(2)(D)(i). 23 F. 4th, at 625. The panel
below instead held that “as long as the third-party summons
is issued to aid in the collection of any assessed tax liability
the notice exception applies.” Id., at 624 (internal quotation
marks omitted). In so concluding, the Sixth Circuit aligned
itself with both the Seventh and Tenth Circuits. See Davidson v. United States, 

 (CA10 1998) (Table);
Barmes v. United States, 

 (CA7 1999) (per
curiam).
   Judge Kethledge dissented. He acknowledged that an ordinary reading of the statute exempted the summonses from
notice but thought the statutory context compelled a narrower construction. As an initial matter, Judge Kethledge
expressed concern that the panel's reading of the notice exception risked “a signifcant intrusion upon the privacy of
438                    POLSELLI v. IRS

                      Opinion of the Court

. . . account holders.” 23 F. 4th, at 631. He argued that an
ordinary reading of the frst exception to notice would render
the second exception—codifed in § 7609(c)(2)(D)(ii)—“superfuous.” Ibid. To avoid that, Judge Kethledge would have
narrowed the frst exception by adopting the legal interest
test from the Ninth Circuit. We granted certiorari to resolve the division among the Circuits. 598 U. S. ––– (2022).

                              III
  The question presented is whether the exception to the
notice requirement in § 7609(c)(2)(D)(i) applies only where a
delinquent taxpayer has a legal interest in accounts or records summoned by the IRS under § 7602(a). A straightforward reading of the statutory text supplies a ready answer:
The notice exception does not contain such a limitation.

                              A

Page      Proof
  The statute          Pending
              sets forth three conditionsPublication
                                          to exempt the IRS
from providing notice in circumstances like these. First,
a summons must be “issued in aid of . . . collection.”
§ 7609(c)(2)(D). Second, it must aid the collection of “an assessment made or judgment rendered.” § 7609(c)(2)(D)(i).
By “assessment,” the Code “refers to the offcial recording
of a taxpayer's liability.” Direct Marketing Assn. v. Brohl,

, 9 (2015); see also Hibbs v. Winn, 

 (2004). Section 7609(c)(2)(D)(i) does not excuse notice,
therefore, until the IRS makes an offcial assessment or a
judgment has been rendered with respect to a taxpayer's
liability. Third, a summons must aid the collection of assessments or judgments “against the person with respect to
whose liability the summons is issued.” § 7609(c)(2)(D)(i).
This requirement links the subject of the assessment or judgment with the subject of the collection effort—they must
concern the same delinquent taxpayer. None of the three
components for excusing notice in § 7609(c)(2)(D)(i) mentions
a taxpayer's legal interest in records sought by the IRS,
                   Cite as: 

 (2023)            439

                      Opinion of the Court

much less requires that a taxpayer maintain such an interest
for the exception to apply.
   Had Congress wanted to include a legal interest requirement, it certainly knew how to do so. The very next provision—also enacted as part of the Tax Reform Act of 1976—
requires the IRS to “establish the rates and conditions” for
reimbursing costs “incurred in searching for, reproducing, or
transporting” information sought by a summons. § 7610(a)
(2); see 

. But the IRS may not provide reimbursement if “the person with respect to whose liability the
summons is issued has a proprietary interest in” the records
“to be produced.” § 7610(b)(1). We assume that Congress
“acts intentionally and purposely” when it “includes particular language in one section of a statute but omits it in another section of the same Act.” Sebelius v. Cloer, 

 (2013) (internal quotation marks omitted). The fact
that the exception to the reimbursement provision expressly
turns on a taxpayer's “proprietary interest” in records sumPage Proof Pending Publication
moned by the IRS strongly suggests that Congress deliberately omitted a similar requirement with respect to the notice exception in § 7609(c)(2)(D)(i). And here the provision
in question is not just in the “same Act”—it is in the adjacent
section, having been enacted in the same Public Law.

                                B
  Petitioners advance two primary arguments in support of
their proposed legal interest test, neither of which convinces
us to abandon an ordinary reading of the notice exception.
  First, petitioners adopt a narrow defnition of “in aid of
the collection.” In their view, the phrase refers only to inquiries that “directly advance” the IRS's collection efforts.
Brief for Petitioners 21. A summons will not directly advance those efforts, they contend, unless it is targeted at an
account containing assets that the IRS can collect to satisfy
the taxpayer's liability. And, petitioners say, the only way
that a summons issued to a third party will produce collect-
440                    POLSELLI v. IRS

                      Opinion of the Court

ible assets is if the delinquent taxpayer has a legal interest
in the targeted account.
    This argument does not give a fair reading to the phrase
“in aid of the collection.” According to petitioners, the
phrase requires that a summons produce collectible assets.
But to “aid” means “[t]o help” or “assist.” American Heritage Dictionary 26 (1969). Petitioners agree. See Brief for
Petitioners 21 (“aid” means to “support,” “help,” or “assist”).
Even if a summons may not itself reveal taxpayer assets that
can be collected, it may nonetheless help the IRS fnd such
assets.
    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. Polselli was
using Dolce Hotel Management as an alter ego, and also that
he might have access to and use of Mrs. Polselli's bank acPage Proof Pending Publication
counts. Based on those leads, Bryant initially requested
that Abraham & Rose produce “cancelled checks, wire transfer/credit documents, and all other instruments used by
Mr. Polselli to pay the firm. ” Id., at 67a. Whether
Mr. Polselli maintains a “legal interest” in those records—a
confounding question, see Viewtech, 653 F. 3d, at 1106—is
neither here nor there. The IRS could not, of course, use
records of canceled checks and the like to satisfy Mr. Polselli's tax defciency. But if those records showed that money
from Dolce Hotel Management was used to pay Mr. Polselli's
account at Abraham & Rose, or to pay others through Abraham & Rose, that could aid in collecting funds from Dolce
Hotel Management to help pay Mr. Polselli's debt to the IRS.
Or the Service could use those records to try to identify
other alter egos—besides Dolce Hotel Management—where
Mr. Polselli might have hidden assets.
    By the same token, the summonses Bryant issued to the
three banks sought records to “identify . . . entities whose
funds Mr. Polselli has control over without formal owner-
                    Cite as: 

 (2023)              441

                        Opinion of the Court

ship” and “bank accounts associated with such entities.”
App. to Pet. for Cert. 68a. As with the request Bryant issued to Abraham & Rose, even if the three bank summonses
did not reveal bank accounts in which Mr. Polselli has a legal
interest, they could lead to assets parked elsewhere that the
IRS could collect to satisfy his $2 million liability.
   IRS investigations are much like any other: A detective
might order forensic testing or speak to witnesses to help
identify a culprit, even if those activities are unlikely—in and
of themselves—to solve the crime. Similarly, documents in
the accounts belonging to Mrs. Polselli or Dolce Hotel Management may be a step in a paper trail leading to assets
owned by Mr. Polselli. Everyday tasks illustrate the same
point: A recipe might help a chef shop for needed groceries,
even though more steps are required before dinner will be
ready. By confating activities that help advance a goal with
activities sure to accomplish it, petitioners ignore the typical
Page Proof Pending Publication
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 superfuous 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. § 7609(c)(2)(D)(i).
Clause (ii) exempts from notice any summons “issued in aid
of the collection of . . . the liability at law or in equity of any
transferee or fduciary of any person referred to in clause
(i).” § 7609(c)(2)(D)(ii). We ordinarily aim to “giv[e] effect
to every clause and word of a statute.” Microsoft Corp. v.
i4i L. P., 

 (2011) (internal quotation marks
omitted). If clause (i) already exempts from notice every
summons that helps the IRS collect an “assessment” against
a delinquent taxpayer, petitioners argue, there would be no
work left for clause (ii) to do. Adding a “legal interest” requirement, on the other hand, would cabin the scope of clause
(i), leaving some purpose for clause (ii).
442                     POLSELLI v. IRS

                       Opinion of the Court

   But this argument overlooks two differences between
clause (i) and clause (ii). First, clause (i) is applicable upon
an assessment, while clause (ii) is applicable upon a fnding
of liability. Under the Code, a taxpayer's “liability” for unpaid taxes arises before the IRS makes an offcial “assessment” of what the delinquent taxpayer owes. See § 6203
(“The assessment shall be made by recording the liability of
the taxpayer . . . .”); see also United States v. Galletti, 

 (2004) (assessment refers to “the calculation or
recording of a tax liability”). Although an assessment may
“trigge[r] levy and collection efforts,” Hibbs, 

, the Code does not require in all cases that the IRS make
a formal assessment before attempting to collect an outstanding tax liability. See §§ 6501(c)(1)–(3) (authorizing the
IRS to bring “a proceeding in court for collection of [a]
tax . . . without assessment” in situations involving false returns, willful attempts to evade taxes, and failures to fle
Page Proof Pending Publication
a return).
   Second, petitioners' argument overlooks that clause (i) and
clause (ii) are addressed to different entities. Clause (i) concerns assessments or judgments against a taxpayer—“the
person with respect to whose liability the summons is issued.” § 7609(c)(2)(D)(i). Clause (ii), in contrast, concerns
the liability of a “transferee or fduciary.” § 7609(c)(2)(D)(ii).
That the notice exception distinguishes between taxpayers
and their fduciaries or transferees should come as no surprise. The Code elsewhere separately empowers the IRS to
collect outstanding tax liabilities from taxpayers, on the one
hand, and from transferees or fduciaries, on the other. See
§ 6901. The Code also differentiates between taxpayers and
their fduciaries or transferees in empowering the IRS to
issue summonses in the frst place. See § 7602(a).
   These distinctions—between liability and assessment or
judgment, and between taxpayers and their transferees or
fduciaries—are not just academic. They show that the second notice exception found in clause (ii) applies in situations
                   Cite as: 

 (2023)            443

                      Opinion of the Court

where clause (i) may not. To dispense with notice, clause
(i) requires that there be “an assessment made or judgment
rendered against the person with respect to whose liability
the summons is issued.” § 7609(c)(2)(D)(i). By contrast,
clause (ii) does not impose the same conditions. It instead
authorizes the IRS to issue a summons in aid of collecting a
“liability at law or in equity,” and refers specifcally to the
liability of any “transferee or fduciary” of the delinquent
taxpayer. § 7609(c)(2)(D)(ii). As a result, clause (ii) permits the IRS to issue unnoticed summonses to aid its collection from transferees or fduciaries before it makes an “offcial recording of a taxpayer's liability.” Direct Marketing
Assn., 575 U. S., at 9. “That may not be very heavy work
for the phrase to perform, but a job is a job, and enough to
bar the rule against redundancy from disqualifying an otherwise sensible reading.” Gutierrez v. Ada, 

(2000); see also Nielson v. Preap, 586 U. S. –––, ––– (2019) (a
clause that “still has work to do” is not superfuous).
Page Proof Pending Publication
   Clause (ii) addresses an additional potential problem as
well. Delinquent taxpayers sometimes declare bankruptcy
or otherwise discharge debt. 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 fduciary. § 7609(c)(2)(D)(ii).

                               IV
  Petitioners also emphasize the privacy concerns that led
Congress to enact the notice requirement in the frst place.
They highlight that “Congress enacted § 7609 in response to
two decisions in which we gave a broad construction to the
IRS's general summons power.” Tiffany Fine Arts, 

. In Donaldson v. United States, 

444                     POLSELLI v. IRS

                        Opinion of the Court

(1971), we considered whether the employee of a company to
which the IRS had issued a summons could intervene to prevent his employer's compliance with the Service's request.

. We concluded that the employee had no right to
do so. 

. And in United States v. Bisceglia, 

 (1975), we approved an IRS summons issued to a
bank “for the purpose of identifying an unnamed individual
who had deposited a large amount of money in severely deteriorated bills,” concluding that the IRS had not abused its
authority. Tiffany Fine Arts, 

 (characterizing Bisceglia).
   Donaldson and Bisceglia help explain why Congress enacted § 7609, which establishes a baseline rule requiring the
IRS to provide notice and which authorizes anyone entitled
to notice to move to quash a summons. § 7609(a). But neither case obliges us to read the notice exception in § 7609(c)
(2)(D)(i) more narrowly than its terms provide. We think
the history highlighted by petitioners supports a contrary
Page Proof Pending Publication
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 specifc 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, 

.
Tax investigations often involve the pursuit of sensitive records. In this case, for instance, the IRS sought information
from law frms concerning client accounts. And even the
Government concedes that the phrase “in aid of the collection” is not “limitless.” Tr. of Oral Arg. 33. The Government proposes a test turning on reasonableness: So long as
a summons is “reasonably calculated to assisting in collection,” it can fairly be characterized as being issued “in aid
of ” that collection. Id., at 26; see also id., at 36 (“[T]he third
party should have some fnancial ties or ha[ve] engaged in
fnancial transactions with the delinquent taxpayer.”).
                   Cite as: 

 (2023)             445

                     Jackson, J., concurring

   This is not, however, the case to try to defne the precise
bounds of the phrase “in aid of the collection.” The parties
did not argue, and the panel below did not decide, the contours of that phrase. See Illinois v. Gates, 

,
222–223 (1983). In addition, both the briefng by the parties
and the question presented focus only on whether the exception provided in § 7609(c)(2)(D)(i) requires that a taxpayer
maintain a legal interest in records summoned by the IRS.
For the reasons we have given, the answer is no.
   The judgment of the Court of Appeals for the Sixth Circuit
is affrmed.
                                              It is so ordered.

  Justice Jackson, with whom Justice Gorsuch joins,
concurring.
   The Court holds today that there is no “legal interest”
limitation on the ability of the Internal Revenue Service
to summon records without notice under 26 U. S. C.
Page Proof Pending Publication
§ 7609(c)(2)(D)(i). I agree. I write to emphasize two points
I believe are critical to understanding that, despite our rejection of this particular limit, the summoning power of the IRS
under that provision is circumscribed nonetheless.
   First, while the need for effcient tax administration is certainly important and Congress has given the agency lots of
attendant authority, the default rule when the IRS seeks
information from third-party recordkeepers under this statute is notice. The IRS can summon “any books, papers, records, or other data” that “may be relevant or material to”
determining a taxpayer's liability or collecting unpaid tax.
§§ 7602(a)(1)–(2). And it can issue such summonses to “any
. . . person the [IRS] may deem proper.” § 7602(a)(2) (emphasis added). But, as a general matter, when the IRS issues a summons pursuant to this authority, the agency must
provide notice to “any person . . . identifed in the summons”
and to whom “any portion of [the requested] records” relate.
§ 7609(a)(1) (imposing notice requirement as the “general”
rule).
446                     POLSELLI v. IRS

                      Jackson, J., concurring

   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. On one hand, the notice requirement permits the IRS to summon recordkeepers for the information it needs, without imposing overly burdensome
procedural hurdles or inviting excessive delay. See, e. g.,
§ 7609(a)(2) (allowing the IRS to serve notice by mail);
§ 7609(b)(2) (setting time limitations on fling a motion to
quash). On the other hand, notice—and the concomitant
right to judicial review—empowers persons whose information is at stake to enlist assistance from the courts, as
needed, to prevent the agency from overreaching. § 7609(b);
see also Tiffany Fine Arts, Inc. v. United States, 

, 320–321 (1985).
   To be sure, Congress has also recognized that there might
be situations, particularly in the collection context, where
Page Proof Pending Publication
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.
   That is where the exception at § 7609(c)(2)(D)(i) comes in.
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. And when
that is the case, it might unjustifably tip the scales in the
other direction (i. e., entirely in the IRS's favor) to allow the
IRS to proceed without notice just because its delinquency
resolution process has entered the collection phase.
   In other words, the statute's balancing of interests indicates that Congress did not give the IRS a blank check, so
                   Cite as: 

 (2023)            447

                     Jackson, J., concurring

to speak, to do with as it will in the collection arena. Thus,
in my view, courts must not interpret § 7609(c)(2)(D)(i) as
if that agency has been gifted with boundless authority.
Treating the IRS's power to issue unnoticed summonses as
effectively unlimited permits the exception to devour the
rule, upsetting the statute's calibration.
   Second, and similarly, it is hard for me to believe that,
in the context of a default-notice system, Congress would
intentionally insert an exception that could so dramatically
upend its objectives. Read too broadly, § 7609(c)(2)(D)(i)
would presumably permit the IRS to summon anyone's records without notice, no matter how broad the summons is or
how potentially intrusive that records request might be, so
long as the agency thinks doing so would provide a clue to
the location of a delinquent taxpayer's assets.
   Imagine, for example, a delinquent taxpayer who routinely
visits his local mom-and-pop dry cleaning business. ImagPage Proof Pending Publication
ine also that the IRS suspects this delinquent taxpayer
sometimes uses credit cards with different names. Under a
broad reading of § 7609(c)(2)(D)(i), I suppose the IRS could
issue a summons to the dry cleaner's bank without notice to
the dry cleaner, seeking years of the dry cleaner's fnancial
records. The agency might believe that having the entirety
of that business's fnancial information would aid its tax-collection efforts—even though the taxpayer has no known
fnancial interest in that business, or any special relationship
with the business's owners—because knowing what methods
of payment (or aliases) the taxpayer regularly uses could
help the agency track down the taxpayer's assets. And it
might intend to sift through the requested haystack of the
business's bank records in order to fnd the needle of the
taxpayer's transaction information.
   For their part, the dry cleaner's owners would probably
look askance at having all of their fnancial records requisitioned and reviewed in this manner. But, without notice,
they cannot object to the summons's scope or work with the
448                    POLSELLI v. IRS

                     Jackson, J., concurring

IRS (and the court) to provide the records that most likely
involve the delinquent taxpayer or his aliases. The owners
would have to rely on the recipient of the summons (the
bank) to articulate their privacy concerns and negotiate with
the agency. Yet there is no guarantee under the statute
that the bank will do that, and even if it does, how is the
bank supposed to identify which credit cards may have been
used by the delinquent taxpayer over a multiyear period?
   This situation seems to me to be the kind of circumstance
in which Congress would not have intended to prevent the
dry cleaning business from attempting to protect its interests. And, in my view, reading § 7609 to require notice—
and the potential for judicial oversight—in relation to such
attenuated tax-collection activities is entirely consistent with
the statutory scheme. Conversely, allowing the agency to
sidestep oversight of its broad summons power by not providing notice in these kinds of situations undermines the important aims of the default-notice system.
Page Proof Pending Publication
   The bottom line is this: As I read the statute, the IRS is
not necessarily exempt from notice obligations any time a
tax-delinquency matter enters the collection phase. Rather,
the exception in § 7609(c)(2)(D)(i) merely refects Congress's
determination that, in some situations, requiring the agency
to provide notice in connection with its tax-collection efforts
would undermine the balance that the statute strikes with
its default-notice requirement. Consequently, I believe that
both courts and the IRS itself must be ever vigilant when
determining when notice is not required. Doing so properly
involves a careful fact-based inquiry that might well vary
from case to case, depending on the scope and nature of the
information the IRS seeks.
                              Reporter’s Note

  The attached opinion has been revised to refect the usual publication
and citation style of the United States Reports. The revised pagination
makes available the offcial United States Reports citation in advance of
publication. The syllabus has been prepared by the Reporter of Decisions
Page Proof Pending Publication
for the convenience of the reader and constitutes no part of the opinion of
the Court. A list of counsel who argued or fled briefs in this case, and
who were members of the bar of this Court at the time this case was
argued, has been inserted following the syllabus. Other revisions may
include adjustments to formatting, captions, citation form, and any errant
punctuation. The following additional edits were made:

p. 432, line 4, “§ 7609(a)(1) ' ” is replaced with “26 U. S. C. § 7609(a)(1)”