U.S. v. NORONHA, (W.D.Ky. 2003)

JAMES MOYER, Magistrate Judge

This case having been called in open court on Tuesday, April 23, 2003, at 10:00 a.m., before the Honorable James D. Moyer, United States District Court Magistrate Judge, for the respondent to show cause through evidentiary hearing why respondent should not be compelled to testify and produce the records demanded in the Internal Revenue Service administrative summons served upon David Noronha, on September 5, 2002, and counsel appearing for the United States of America, and respondent failing to appear, and

This Court having heard and considered recommendations and arguments of counsel for the United States, petitioner herein, the following Findings and Recommendations are made:

1. On September 5, 2002, an Internal Revenue Service summons was issued by Linda Edwards, Revenue Officer of the Small Business/Self-Employed Division of the Internal Revenue Service (hereinafter IRS) Office directing respondent, David Noronha, to appear before Linda Edwards, Revenue Officer, on September 17, 2002, at 9:00 a.m., at the Internal Revenue Service Office, 1500 Ormsby Station Court, Louisville, Kentucky, to testify and produce for examination books, papers, records or other data described in the summons. An attested copy of the summons was handed to the respondent, David Noronha by Revenue Officer Linda Edwards on September 5, 2002, as is set forth in Linda Edwards' declaration attached hereto as Exhibit "A."

The summons is attached hereto and incorporated herein as Exhibit "B."

2. On September 17, 2002, the respondent, David Noronha, did not appear in response to the summons. The respondent's refusal to comply with the summons continues to date as is set forth in declaration of Linda Edwards, attached hereto as Exhibit "A."

3. On December 20, 2002, at the request of the IRS, the United States Attorney filed Petition to Enforce Internal Revenue Service summons against the respondent.

4. On December 23, 2002, the Honorable John G. Heyburn, II issued an Order to Show Cause requesting that respondent appear before the United States Magistrate Judge on February 6, 2003 at 10:00 a.m., in Civil Action No. 3:02MC-66-H. On January 14, 2003, respondent was served (see attached Exhibit "C"). On February 6, 2003, counsel for respondent filed a Motion to File for Extension for Petition to Enforce IRS Summons Hearing. On February 6, 2003, Magistrate Judge Moyer entered an Order allowing the respondent up to and including February 11, 2003 to comply with the Internal Revenue Service Summons Enforcement Petition. On February 11, 2003, respondent appeared before the Magistrate Judge with Bruce Atherton, retained counsel. Counsel for respondent advised that the summons relating to Form 1120 business returns had been satisfied, but the summons relating to the 2001-2002 financial records remained outstanding. By agreement of the parties and the Court, a thirty-day continuance would be granted allowing respondent additional time to comply.

5. On February 13, 2003, the Honorable James D. Moyer, United States Magistrate Judge, issued an Order continuing this matter to March 11, 2003 at 2:00 p.m. to allow the respondent additional time to comply with the Internal Revenue Service Summons Enforcement Petition.

6. On March 11, 2003, respondent appeared before the Magistrate Judge with counsel. Counsel for respondent advised the Court that the remaining financial records, of approximately 10 boxes, would be delivered to his office by the close of business on Monday, March 17, 2003 and once the documents arrived a meeting would be scheduled in order for Revenue Officer Linda Edwards to review the documents. By agreement of the parties and the Court, an additional continuance would be granted.

7. On March 11, 2003, the Honorable James D. Moyer, United Stated Magistrate Judge, issued an Order continuing this matter to April 23, 2003 at 10:00 a.m. to allow the respondent additional time to comply with the Internal Revenue Service Summons Enforcement Petition.

8. On April 23, 2003 at 10:00 a.m., neither the defendant nor his attorney appeared. The Deputy Clerk called Attorney Atherton's office and was informed that he was in Court. Revenue Officer Linda Edwards testified that on April 7, 2003 she reviewed four boxes of records (not ten) supplied to Attorney Atherton by respondent. Not finding answers to all of her questions, Ms. Edwards, on April 9, 2003, sent a letter to respondent. (Exhibit "D"). Neither the respondent nor his attorney has responded in any fashion to her requests.

9. To this date, respondent has failed to fully comply with the IRS summons served on September 5, 2002 and the Orders of this Court.

RECOMMENDATION

This Court accordingly concluding that respondent, David Noronha as proffered no compelling reasons for failing to comply with Orders of this Court, it is hereby recommended that the District Court enter an Order issuing a warrant of arrest for respondent, David Noronha, to appear before the United States District Judge to show cause why respondent, David Noronha, should not be held in contempt pursuant to Title 18, United States Code, Section 401 and Title 26, United States Code, Sections 7402(b), 7604(a).

EXHIBIT A

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY

UNITED STATES OF AMERICA ) ) Petitioner, ) ) v. ) Civil Action No. ) DAVID NORONHA, AS PRESIDENT ) of INTERNATIONAL DATA ) GROUP, INC. ) ) Respondent )

DECLARATION

I, Linda Edwards, declare:

1. I am employed as a revenue officer in the Small Business/Self-Employed Division of the Internal Revenue Service at Louisville, Kentucky 40223.

2. In my capacity as a revenue officer, I am conducting an investigation into the tax liability of International Data Group, Inc. for the calendar year ended December 31, 2001.

3. In furtherance of the above investigation and in accordance with section 7602 of Title 26, U.S.C. I issued on September 5, 2002, an Internal Revenue Service summons, Form 2039, to David Noronha, as President of International Data Group, Inc., to give testimony and to produce for examination books, papers, records, or other data as described in said summons. The summons is attached to the petition as Exhibit B1.

4. In accordance with section 7603 of Title 26, U.S.C. on September 5, 2002, I served an attested copy of the Internal Revenue Service summons described in paragraph 3 above on the respondent, David Noronha, by personal delivery on the

EXHIBIT A-1

respondent, as evidenced in the certificate of service on the reverse side of the summons.

5. On September 17, 2002, the respondent, David Noronha, did not appear in response to the summons. The respondent's refusal to comply with the summons continues to the date of this declaration.

6. The books, papers, records, or other data sought by the summons are not already in the possession of the Internal Revenue Service.

7. All administrative steps required by the Internal Revenue Code for issuance of a summons have been taken.

8. It is necessary to obtain the testimony and to examine the books, papers, records or other data sought by the summons in order to properly investigate the tax liability of International Data Group, Inc., for the calendar years ended December 31, 2001.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this 20th day of November, 2002.

_____________________ Linda Edwards Revenue Officer

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY

UNITED STATES OF AMERICA ) ) Petitioner, ) ) v. ) Civil Action No. ) DAVID NORONHA, AS PRESIDENT ) of INTERNATIONAL DATA ) GROUP, INC. ) ) Respondent )

DECLARATION

I, Linda Edwards, declare:

1. I am employed as a revenue officer in the Small Business/Self-Employed Division of the Internal Revenue Service at Louisville, Kentucky 40223.

2. In my capacity as a revenue officer, I am conducting an investigation into the collection of the tax liabilities of International Data Group, Inc. for the quarterly periods ended June 30, 2000, September 30, 2000, March 31, 2001, and June 30, 2001.

3. In futherance of the above investigation and in accordance with section 7602 of Title 26, U.S.C., I issued on September 5, 2002, an Internal Revenue Service summons, Form 2039, to David Noronha, as President of International Data Group, Inc., to give testimony and to produce for examination books, papers, records, or other data as described in said summons. The summons is attached to the petition as Exhibit B2.

4. In accordance with section 7603 of Title 26, U.S.C., on September 5, 2002, I served an attested copy of the Internal Revenue Service summons described in

EXHIBIT A-2

paragraph 3 above on the respondent, David Noronha, by personal delivery on the respondent, as evidenced in the certificate of service on the reverse side of the summons.

5. On September 17, 2002, the respondent, David Noronha, did not appear in response to the summons. The respondent's refusal to comply with the summons continues to the date of this declaration.

6. The books, papers, records, or other data sought by the summons are not already in the possession of the Internal Revenue Service.

7. All administrative steps required by the Internal Revenue Code for issuance of a summons have been taken.

8. It is necessary to obtain the testimony and to examine the books, papers, records or other data sought by the summons in order to properly investigate the collection of the tax liabilities of International Data Group, Inc., for the quarterly periods ended June 30, 2000, September 30, 2000, March 31, 2001, and June 30, 2001.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this 20th day of November, 2002.

____________________ Linda Edwards Revenue Officer

EXHIBIT B

EXHIBIT C

EXHIBIT D DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE Washington, DC 20224

SMALL BUSINESS/SELF-EMPLOYED DIVISION

Date: April 09, 2003

Area Number: 6

International Data Group Inc Po Box 24375 Louisville, KY 40224

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Dear Mr. Noronha:

On 4/7/2003, I looked through the four boxes of records you supplied to Mr. Atherton. After reviewing this information, I have some questions that were not answered by the information in those boxes. Please respond to the following prior to the April 23, 2003 court date in order to comply with the summons.

Please provide a list of the corporate assets that were used for depreciation on the 2000 form 1120 and provide a status record of those assets. I have enclosed a copy of your balance sheet that shows the value of assets in the amount of $215,413.

Provide of list of assets purchased after 1/1/2001.

On what date was the last payroll paid and when did the corporation go out of business?

Please provide payroll records after 06/30/2001.

If you have any questions or need more information, please contact me at the address or the telephone number listed below:

Internal Revenue Service, 1500 Ormsby Station Ct., Louisville, KY 40223, Phone#: 502-420-1570, Fax#: 502-420-1544

Sincerely,

Linda Edwards, Revenue Officer, Employee ID#: 61-11183

Cc: Larry Hart

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY AT LOUISVILLE

UNITED STATES OF AMERICA PETITIONER

v. CIVIL ACTION NO. 3:02MC-66-H

DAVID NORONHA RESPONDENT

ORDER

On motion of the Petitioner, and the Court being sufficiently advised,

IT IS HEREBY ORDERED AND ADJUDGED that a warrant shall be issued for the arrest of the respondent, David Noronha, for failure to comply with the Internal Revenue Service's summons issued on September 5, 2002, and the Orders of this Court to appear on September 17, 2002, at 9:00 a.m.

Dated this _________ day of ____________, 20__.

_________________________________ JOHN G. HEYBURN, II JUDGE, U.S. DISTRICT COURT

Submitted by:

MONICA WHEATLEY Acting United States Attorney

____________________________ David L. Huber Assistant U.S. Attorney 510 W. Broadway, 10th Floor Louisville, Kentucky 40202 (502) 582-5505

cc: Counsel of Record Revenue Officer, IRS US Marshal