Tax Legal Services · Primary-source case analysis

Polselli v. IRS: The Two Collection-Notice Exceptions Have Different Requirements

By Aneeta Mishra and Timothy Chan

Published April 13, 2026 · Updated October 18, 2026

Decision: Polselli v. Internal Revenue Serv., 598 U.S. 432 (2023).

The IRS often must notify a person identified in a third-party summons, but Congress created exceptions. Polselli rejected an ownership requirement under section 7609(c)(2)(D)(i). Its explanation also distinguishes that exception from neighboring clause(ii), which concerns collection from a transferee or fiduciary. Confusing the clauses can produce an overbroad statement that every collection-notice exception requires a prior assessment.

The collection investigation

After assessing substantial liabilities against a taxpayer, the IRS sought records from banks connected to the taxpayer’s wife and lawyers. The government did not notify the account holders. They petitioned to quash, arguing that the notice exception should apply only when the delinquent taxpayer had a legal interest in the summoned records.

Three statutory requirements

The Court identified the provision’s textual requirements: The summons must be issued in aid of collection; an assessment or judgment must already exist; and the collection effort must concern the liability of the person identified in the statute. That is clause(i)’s framework. Clause(ii) instead addresses the liability at law or in equity of a transferee or fiduciary and does not impose the same assessment-or-judgment condition. The Court explained that liability and formal assessment are different concepts. These are separate statutory routes, not permission to ignore the conditions of the route actually invoked. Polselli, majority slip opinion pages 9–11.

The unanimous holding

The Court declined to insert the proposed legal-interest test and affirmed. A summons can aid collection by helping the IRS locate assets or understand financial relationships even if the taxpayer does not own the records or account. The Court did not define the outer boundary of in-aid-of-collection because the question presented was limited to the proposed ownership requirement. It noted, for example, that clause(i) cannot aid an impossible collection effort, while clause(ii) might concern a transferee’s or fiduciary’s separate liability. That discussion does not prove liability of any particular third party. Polselli, majority slip opinion pages 10–12.

Practical consequences

Whether notice is required affects the opportunity to bring a pre-enforcement petition to quash. Recipients and affected account holders must therefore examine the summons date, the existence of an assessment or judgment, the taxpayer whose liability is being collected, and whether the summons genuinely serves that collection effort. Other objections and post-compliance remedies were not resolved by the holding.

Key takeaways

• The collection exception contains no taxpayer-ownership requirement.
• An assessment or judgment is required for clause(i); identify whether the IRS instead invokes the distinct transferee-or-fiduciary clause(ii).
• The summons must aid collection of the identified taxpayer’s liability.
• Other limits on summons authority remain separate questions.