The IRS has broad investigatory powers, which include the
power to issue a summons compelling the production of records, testimony, or
both. See I.R.C. § 7602(a)(2). If the
recipient of a summons refuses to comply, enforcement proceedings will follow
in district court. See I.R.C. § 7604.
While the process has a family resemblance to discovery in
civil actions under the Federal Rules of Civil Procedure, that can be
deceiving, as the IRS has far fewer constraints. Federal Rule of Civil
Procedure 26 describes the permitted scope of discovery in this way:
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.