Sabena Puri v. United States

This case concerns an Internal Revenue Service summons served upon the bank of a United States citizen pursuant to a treaty request made by the Republic of India. It is fundamental that citizens have a right to be free from abuse of the judicial process, and that the Courts have inherent authority to police this abuse. In United States v. Powell, 379 U.S. 48 (1964), this Court articulated a framework for policing abuse in the Internal Revenue Service summons enforcement context. There, this Court recognized that “[i]t is the court’s process which is invoked to enforce [an IRS] summons and a court may not permit its process to be abused.” Id. at 58. A court must therefore quash a summons if a taxpayer shows that the summons has been issued for “an improper purpose, such as to harass the taxpayer or to put pressure on him to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation.” Id. Here, Petitioner offered evidence of India’s abusive purpose for seeking the summons, but the district court declined to consider it. Instead, the district court held that in the context of a summons issued pursuant to a treaty request, a foreign government’s abusive purpose is irrelevant bar none. Rather, so long as the IRS itself acts in response to a treaty request, the IRS’s good faith is established and that is all that matters. For its part, the government acknowledges that the IRS makes no inquiry into whether the foreign government acts in good faith or for an abusive purpose. The Ninth