In response to a request by Canadian tax authorities under the United States-Canada Double Taxation Convention (Convention), the U.S. Internal Revenue Service (IRS) issued summonses to obtain U.S. bank records concerning certain accounts of respondents, Canadian citizens whose Canadian tax liability was under investigation. Respondents sought to quash the summonses, arguing that because under 26 U.S.C. §7609(b) the IRS is prohibited by U.S. law from using its summons authority to obtain information about a U.S. taxpayer once a case is referred to the Justice Department for prosecution, and because the tax investigation of respondents was part of a Canadian criminal investigation, the IRS should be precluded from using its summons authority to honor the Canadian request under the Convention. Unsuccessful in the district court, respondents prevailed in the U.S. Court of Appeals for the Ninth Circuit, which held that under the “good faith” standard applicable to enforcement of domestic summonses, the IRS may issue a summons pursuant to a Convention request only if it first determines and makes an affirmative statement to the effect that the Canadian investigation has not reached a stage analogous to a Justice Department referral by the IRS. The U.S. Supreme Court (per Brennan, J.) reversed, and held: (1) that if the summons is issued in good faith, it is enforceable regardless of whether the Canadian request is directed toward criminal prosecution under Canadian law; and (2) neither United States law nor anything in the text or the ratification history of the Convention supports the imposition of additional requirements. Justice Kennedy (joined by O’Connor, J.), concurring in part and in the judgment, filed a brief opinion to state his view that it is unnecessary to decide whether Senate preratification materials are authoritative sources for treaty interpretation. Justice Scalia, concurring in the judgment, wrote separately to oppose the use of such materials in treaty construction.
A Choice among Values: Theoretical and Historical Perspectives on the Defence of Necessity