RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 21a0082p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT ┐ KIMBERLY BASEHART GAETANO; RICHARD GAETANO, │ Petitioners-Appellants, │ > No. 20-1902 │ v. │ │ UNITED STATES OF AMERICA, │ Respondent-Appellee. │ ┘ Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 2:19-mc-51563—Marianne O. Battani, District Judge. Decided and Filed: April 9, 2021 Before: GUY, DONALD, and MURPHY, Circuit Judges. _________________ COUNSEL ON BRIEF: Joseph Falcone, JOSEPH FALCONE, P.C., Southfield, Michigan, for Appellants. Elissa Hart-Mahan, Joan I. Oppenheimer, DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. _________________ OPINION _________________ RALPH B. GUY, JR., Circuit Judge. The Internal Revenue Service (IRS) issued a summons to a point-of-sale systems provider, seeking records related to Richard and Kimberly Gaetano and their cannabis businesses. Alleging the summons was issued in bad faith, the Gaetanos brought this action to quash the summons under 26 U.S.C. § 7609. The district court dismissed the action for lack of subject-matter jurisdiction because the Gaetanos lacked standing. No. 20-1902 Gaetano, et al. v. United States Page 2 On appeal, the Government argues that § 7609 only waives the United States’ sovereign immunity to allow taxpayers to bring an action to quash certain third-party IRS summonses. As a matter of first impression, we conclude that the immunity waiver in § 7609 is subject to the statute’s exceptions. One of those exceptions applies because the summons here was issued by an IRS criminal investigator “in connection” with an IRS criminal investigation and the summoned party is not a third-party recordkeeper. See 26 U.S.C. § 7609(c)(2)(E). Without a statutory waiver of the United States’ sovereign immunity, subject-matter jurisdiction cannot obtain. Accordingly, we affirm. I. A. Kimberly and Richard Gaetano own several cannabis dispensary businesses located in Michigan. The IRS at some point began a criminal investigation of the Gaetanos to determine whether they owed federal taxes. On October 9, 2019, Special Agent Tyler Goodnight of the IRS’s Criminal Investigation Division and another IRS agent interviewed the owners of Portal 42, LLC. Portal 42 is a software company that provides the cannabis industry with point-of-sale systems, featuring the capacity for businesses to track customer sales data or delete the data remotely with a “kill switch.” The owners of Portal 42 confirmed that the Gaetanos are clients. At the conclusion of the interview, Agent Goodnight served Portal 42 with a summons. The summons ordered Portal 42 (and its agent) to appear before Agent Goodnight to “give testimony” and produce various records “and other data relating to the tax liability or the collection of the tax liability or for the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws concerning [the Gaetanos] for the periods shown.” (Emphasis added). Above that statement, in the space labeled “Periods,” it states “01/01/2015 to 09/01/2019.” The attachment to the summons directed Portal 42 to produce “[a]ny and all” records related to the Gaetanos …
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