CCA 200924051: Corporation named in a third-party summons was entitled to notice

Plain-English summary

Chief Counsel considered whether a corporate taxpayer had to receive notice of summonses that named both the corporation and one of its officers. Section 7609 gives notice rights to any person identified in a third-party summons, and section 7701(a)(1) includes a corporation within the term “person.” The regulation's example also requires notice to every person identified in the summons. Chief Counsel therefore advised that both the individual officer and the corporation had to receive notice. Each also had the right to intervene and begin a proceeding to quash the summons.

Ruling snapshot

• Question: Must a corporation receive notice when it is identified with an individual officer in a third-party summons?
• Outcome: Advice given, both named persons are entitled to notice and may seek to quash
• Key authorities: IRC §§ 7609 and 7701(a)(1); Treas. Reg. § 301.7609-2(b)(4)(ii), Example 2

Full text (IRS public release)

ID: CCA_2009042211171859 Number: 200924051
Release Date: 6/12/2009
Office: -----
UILC: 7609.02-01

From: ------------------
Sent: Wednesday, April 22, 2009 11:17:19 AM
To: ------------------------
Cc: ------------------------
Subject: RE: Summons Enforcement ------------------------------------------

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In answer to your question, yes, the corporation taxpayer must receive notice for each of the summonses.

§7609 requires that any person identified in the summons is entitled to notice of such summons. Under § 7701(a)(1) the term “person” includes a company or corporation. Furthermore, Treas. Reg. 301.7609-2(b)(4)(ii), Example 2 specifically addresses the notice requirements implicated in a third party summons issued to determine the potential liability of hypothetical person A under the TFRP, when the summons is captioned: In the matter of A. The example goes on to state that notice must be provided to A and any other persons identified in the summons. Therefore, if the summons is captioned: In the matter of John Smith, President of XYZ Corporation, John Smith and XYZ Corporation are named persons entitled to notice.

Furthermore, §7609(b) provides that any person entitled to notice is also entitled to intervene and begin a proceeding to quash the third party summons. Thus, both John Smith and XYZ Corporation, as persons entitled to notice, also have the right to institute proceedings to quash the summons.

This is also consistent with the parenthetical sentence at the end of IRM 25.5.6.4.1, which states “because the corporate name is identified in the heading of the summons, the corporation is a noticee as well as the individual named in the heading.” Let me know if you have anymore questions,

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