United States of America and Jimmy Chan, Revenue Agent v. Cheng C. Kao and Susan L. Kao, United States of America v. Chin Wu and Su-Chin Kao

SILVER, District Judge:

The Kaos are taxpayers who are being civilly investigated by the Internal Revenue Service (“IRS”). They appeal a consolidated district court order enforcing four summons served by the IRS and compelling the Kaos to execute consent directives. We conclude that 26 U.S.C. § 7602 does not authorize the IRS to compel taxpayers to sign consent directives which would enable the IRS to obtain records from third parties through means other than those established in 26 U.S.C. § 7609. Therefore, we reverse the district court’s order.

In December, 1991, agent Jimmy Chan began…