U.S. District Court Upholds IRS Third-Party Summons for German Tax Treaty Investigation

The U.S. District Court for the Southern District of Florida dismissed a taxpayer’s petition to quash an IRS third-party summons issued to a bank in connection with a request from German tax authorities under the United States–Germany tax treaty. The summons sought financial records relevant to the taxpayer’s individual income tax liabilities and potential corporate tax liabilities for the 2011–2016 period. The court held that the IRS satisfied the four-part good-faith test under United States v. Powell, demonstrating that the summons: (1) served a legitimate purpose — assisting a treaty partner in a tax investigation; (2) sought information relevant to ...