United States v. Michael Clarke , 573 F. App'x 826 ( 2014 )

Case: 12-13190 Date Filed: 07/25/2014 Page: 1 of 5
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-13190
________________________
D.C. Docket Nos. 9:11-mc-80456-KLR; 9:11-mc-80457-KLR
9:11-mc-80456-KLR
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
MICHAEL CLARKE,
As Chief Financial Officer of Beekman Vista, Inc.,
DYNAMO HOLDINGS LIMITED PARTNERSHIP,
Defendants-Appellants.
----------------------------------------------------------
9:11-mc-80457-KLR
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
DYNAMO HOLDINGS LIMITED PARTNERSHIP,
Intervenor Plaintiff-Appellant,
Case: 12-13190 Date Filed: 07/25/2014 Page: 2 of 5
MICHAEL CLARKE,
As Chief Financial Officer of Dynamo GP, Inc.,
As General Partner of Dynamo Holdings Limited
Partnership,
Defendant-Appellant.
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9:11-mc-80459-KLR
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
DYNAMO HOLDINGS LIMITED PARTNERSHIP,
Intervenor Plaintiff-Appellant,
RITA HOLLOWAY,
As Trustee for the 2005 Christine Moog Family
Delaware Dynasty Trust,
Defendant.
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9:11-mc-80460-KLR
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
MARC JULIEN,
As Trustee for the 2005 Robert Julien Delaware
Dynasty Trust,
Defendant,
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DYNAMO HOLDINGS LIMITED PARTNERSHIP,
Intervenor Defendant-Appellant.
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9:11-mc-80461-KLR
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ROBERT JULIEN,
Defendant-Appellant,
DYNAMO HOLDINGS LIMITED PARTNERSHIP,
Intervenor Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 25, 2014)
ON REMAND FROM THE
SUPREME COURT OF THE UNITED STATES
Before MARCUS, BLACK and SILER, * Circuit Judges.
PER CURIAM:
The Supreme Court has remanded this case to us to determine whether
Appellants, Dynamo Holding Limited Partnership and several individuals
*
Honorable Eugene E. Siler, Jr., United States Circuit Judge for the Sixth Circuit, sitting
by designation.
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Case: 12-13190 Date Filed: 07/25/2014 Page: 4 of 5
associated with the company, have pointed to specific facts or circumstances
plausibly raising an inference that the Internal Revenue Service (the IRS or the
Service) issued five administrative summonses in bad faith such that Appellants
were entitled to examine an IRS agent regarding the Service’s reasons for issuing
the summonses. United States v. Clarke, No. 13-301 at 6-8 (U.S. June 19, 2014).
In remanding, the Supreme Court elaborated on the applicable standard,
stating:
As part of the adversarial process concerning a summons’s validity,
the taxpayer is entitled to examine an IRS agent when he can point to
specific facts or circumstances plausibly raising an inference of bad
faith. Naked allegations of improper purpose are not enough: The
taxpayer must offer some credible evidence supporting his charge.
But circumstantial evidence can suffice to meet that burden; after all,
direct evidence of another person’s bad faith, at this threshold stage,
will rarely if ever be available. And although bare assertion or
conjecture is not enough, neither is a fleshed out case demanded: The
taxpayer need only make a showing of facts that give rise to a
plausible inference of improper motive.
Id. at 6-7.
The Supreme Court left to us the task of determining whether Appellants’
evidentiary submissions—including the affidavits of Michael Clarke, the chief
financial officer of Dynamo GP Inc., and Richard Sapinski, an attorney
representing another party in connection with the IRS’s investigation into
Dynamo’s tax liabilities—met the applicable standard. The Court also left to us
the task of determining whether the district court “asked and answered the relevant
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question” in ordering enforcement of the summonses; that is, “whether the
[Appellants] pointed to specific facts or circumstances plausibly raising an
inference of improper motive.” Id. at 8. We are unable to discern from the district
court’s order whether it asked and answered the relevant question. We will
therefore give the district court the opportunity in the first instance to apply the
standard articulated by the Supreme Court. Specifically, the district court should
determine, in light of all of the evidence and the affidavits highlighted by the
Supreme Court, whether Appellants pointed to specific facts or circumstances
plausibly raising an inference of improper purpose.
On remand, the district court should also consider in the first instance
whether the improper purposes alleged by Appellants, i.e., retaliating for
Dynamo’s refusal to extend a statute of limitations deadline for a third time and
seeking enforcement to avoid the Tax Court’s discovery rules, are improper as a
matter of law.1
This case is remanded to the district court for further proceedings consistent
with this opinion and the opinion of the Supreme Court.
REMANDED.
1
We take no position regarding the nature of any further proceedings in the district court
and leave to it the question whether to take additional evidence, hold a hearing, or allow the
parties an opportunity for additional argument.
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