The Internal Revenue Service (IRS) had broad examination authority to determine the correct amount of tax owed by taxpayers. In addition to seeking information directly from a taxpayer, the IRS is also authorized to seek information from third parties. However, Internal Revenue Code (Code) Section 7602(c)(1) requires that the IRS provide “reasonable notice in advance to the taxpayer” before contacting a third party. The US Court of Appeals for the Ninth Circuit recently addressed what constitutes “reasonable notice” for this purpose. In J.B. v. United States, the taxpayer sought to quash an IRS summons for insufficient notice. The taxpayers were selected for a compliance research examination as part of the IRS’s National Research Program, which involves in-depth audits of random taxpayers to improve the government’s access to compliance information and ensure that the IRS is auditing the right taxpayers. The IRS notified the taxpayers of the audit by mail and...

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