                                                                 NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                ______________

                                       No. 18-3401
                                     ______________

                              G2A.COM SP. Z.O.O. (LTD.),
                                                Appellant

                                             v.

                            UNITED STATES OF AMERICA
                                  ______________

                     On Appeal from the United States District Court
                              for the District of Delaware
                                   No. 1:17-mc-00177
                         District Judge: Hon. Leonard P. Stark

                                     ______________

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                     July 1, 2019
                                  ______________

               Before: McKEE, PORTER, and RENDELL, Circuit Judges.

                                (Filed: October 15, 2019)

                                     ______________

                                       OPINION*
                                     ______________




*This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PORTER, Circuit Judge.

         The Republic of Poland requested, and the Internal Revenue Service issued, a

third-party administrative summons under the United States–Poland Tax Treaty 1 to assist

with its ongoing investigation into potential Polish income tax liabilities of G2A.COM

Sp. z.o.o. (Ltd.). G2A petitioned to quash the subpoena and now challenges the District

Court’s partial denial of its petition. G2A argues on appeal that (1) it should have

received notice before the IRS served the summons on a third party that Poland believed

may have relevant information, and (2) the IRS failed to follow the procedures of the

Hague Service Convention. 2 We disagree and will affirm the judgment of the District

Court.

                                              I

         Since 2013, the Polish tax authority has been investigating G2A, a Polish company

involved in video-game trade, for Polish tax liabilities. As part of that investigation,

Poland contacted the United States to request information from Gate Arena, a Delaware

limited liability company that Poland suspected was linked to G2A. Poland initiated the

request under the Tax Treaty, which permits both countries to request tax-related

information from each other to prevent double taxation and tax evasion.



         1
         Convention Between the Government of the United States of America and the
Government of the Polish People’s Republic for the Avoidance of Double Taxation and
the Prevention of Fiscal Evasion with Respect to Taxes on Income, Oct. 8, 1974, 28
U.S.T. 891 (“Tax Treaty”).
       2
         Convention on the Service Abroad of Judicial and Extrajudicial Documents in
Civil and Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163 (“Hague
Service Convention”).
                                              2
       In accordance with the Tax Treaty, on June 28, 2017 the IRS served a summons

on the Corporation Trust Company (“CTC”), Gate Arena’s listed registered agent,

requesting 16 categories of information about Gate Arena’s transactions with G2A. The

next day, the IRS sent notice of service and a partial copy of the summons by registered

mail to G2A in Poland, which G2A received on July 12, 2017. The IRS thus complied

with the notice requirement of 26 U.S.C. § 7609(a) (notice of the third-party summons

must be sent to the person identified in the summons within 3 days of the day on which

service is made and no later than 23 days before the date upon which any responsive

records are to be examined). CTC responded to the summons on July 10, 2017—two days

before G2A received its copy.

       CTC informed the IRS that though it was listed as the registered agent, it had no

records of CTC’s actually serving as Gate Arena’s agent or representative and therefore

had no records responsive to the summons. So, the IRS withdrew the summons.

Nonetheless, the IRS still intends to issue a report to the Polish authority, which G2A

asserts will bolster Poland’s tax liability investigation against it by making Gate Arena

appear to be a shell company. The District Court found that even though the summons

has been withdrawn, the issues raised are not moot. We agree.

       G2A moved to quash the summons on multiple grounds. The District Court

granted G2A’s petition in part, quashing two requests which the government declined to

defend. The District Court denied the rest of G2A’s petition for the remaining requests.

On appeal, G2A contends the IRS failed to give G2A advance notice of the summons as



                                             3
required by the Internal Revenue Code and Tax Treaty, and that the IRS’s notice sent by

registered mail violated the Hague Service Convention.

                                               II

       The District Court had jurisdiction over G2A’s petition to quash the IRS’s

summons under 26 U.S.C. § 7609(h)(1) and 28 U.S.C. §§ 1340 and 1346. We have

jurisdiction under 28 U.S.C. § 1291. We review the enforceability of an IRS summons de

novo. United States v. Ins. Consultants of Knox, Inc., 187 F.3d 755, 759 (7th Cir. 1999).

       The Internal Revenue Code permits the IRS to issue summonses “[f]or the purpose

of ascertaining the correctness of any return, making a return where none has been made,

determining the liability of any person for any internal revenue tax …, or collecting any

such liability.” 26 U.S.C. § 7602(a). For the same purpose, it also permits the IRS to

“examine any books, papers, records, or other data which may be relevant or material.”

Id. The IRS may also issue summonses and examine data when requested by a treaty

partner. See, e.g., United States v. Stuart, 489 U.S. 353 (1989); Lidas, Inc. v. United

States, 238 F.3d 1076, 1081 (9th Cir. 2001).

       A party may challenge a summons in a federal district court under 26 U.S.C.

§ 7604(a). Bearing the initial burden at the outset, “the IRS need only demonstrate good

faith in issuing the summons.” Stuart, 489 U.S. at 359. The Supreme Court has

established four factors for determining whether the IRS acted in good faith. United

States v. Powell, 379 U.S. 48, 57–58 (1964). The IRS must show that: (1) “the

investigation will be conducted pursuant to a legitimate purpose,” (2) “the inquiry may be

relevant to the purpose,” (3) “the information sought is not already within the [IRS’s]

                                               4
possession,” and (4) “the administrative steps required by the [Internal Revenue] Code

have been followed.” Id.; United States v. Rockwell Int’l, 897 F.2d 1255, 1262 (3d Cir.

1990). Additionally (though not relevant here), a referral to the Department of Justice for

criminal prosecution precludes enforcement of an IRS summons. United States v. LaSalle

Nat’l Bank, 437 U.S. 298, 318 (1978); United States v. Cortese, 614 F.2d 914, 919 (3d

Cir. 1980).

       The government can satisfy the Powell factors by submitting an affidavit from the

investigating agent. United States v. Clarke, 573 U.S. 248, 250 (2014); Cortese, 614 F.2d

at 919 n.7; see also United States v. McCarthy, 514 F.2d 368 (3d Cir. 1975). After the

government makes a prima facie case, the taxpayer may still “challenge the summons on

any appropriate ground.” Powell, 379 U.S. at 58 (quotation omitted). But “the taxpayer

bears a heavy burden of establishing an abuse of the court’s process.” LaSalle Nat’l Bank,

437 U.S. at 317; Cortese, 614 F.2d at 919. An abuse of the court’s process exists if the

taxpayer shows, for example, that the government issued the summons “for an improper

purpose, such as to harass the taxpayer or to put pressure on him to settle a collateral

dispute, or for any other purpose reflecting on the good faith of the particular

investigation.” Cortese, 614 F.2d at 919 (quoting Powell, 379 U.S. at 58). We will

address G2A’s arguments in turn.

                                             A

       The District Court properly found that, because the IRS agent provided an

affidavit satisfying the Powell factors for a prima facie case, the burden shifted to G2A to

refute those factors or challenge the summons in another way. G2A argues now, as it did

                                              5
before the District Court, that the government has not satisfied the fourth factor in

Powell’s good-faith test because the IRS did not follow the administrative steps of the

Internal Revenue Code. Specifically, G2A argues that notice must be given to the

taxpayer before the IRS may contact a third party. See 26 U.S.C. § 7602(c)(1)(A) (“An

officer or employee of the Internal Revenue Service may not contact any person other

than the taxpayer with respect to the determination or collection of the tax liability of

such taxpayer unless” the IRS provides “notice which informs the taxpayer that contacts

with persons other than the taxpayer are intended to be made.”); see also § 7609(a). G2A

contends that because it received notice after the IRS served the summons on CTC, the

IRS violated this provision of the Code.

       The District Court rejected G2A’s argument, concluding that a Department of

Treasury regulation expressly exempts inquiries on behalf of foreign jurisdictions from

the advance-notice requirement. Specifically, the regulation excludes liability for any tax

imposed by any other jurisdiction from the “tax liability” referenced in § 7602(c). 26

C.F.R. § 301.7602-2(c)(3)(i)(C). 3 We agree with the District Court. Congress gave the

Secretary of the Treasury the authority to prescribe rules and regulations for enforcing the

Internal Revenue Code, and the Treasury regulation was promulgated under that express

authority. 26 U.S.C. § 7805(a). If a regulation reasonably interprets and implements an

ambiguous statutory provision, it must be given judicial deference. United States v.


       3
         “Tax Liability. A tax liability means the liability for any tax imposed by title 26 of
the United States Code (including any interest, additional amount, addition to the tax, or
penalty) and does not include the liability for any tax imposed by any other jurisdiction nor
any liability imposed by other Federal statutes.” (Emphasis added.)
                                              6
Haggar Apparel Co., 526 U.S. 380, 383 (1999). And this Treasury regulation reasonably

interprets “tax liability,” on which the statute was silent, to mean only taxes imposed by

the United States. This interpretation is consistent with the purpose § 7602, which is to

“determin[e] the liability of any person for any internal revenue tax.” (Emphasis added).

       G2A argued to the District Court that the Treasury regulation impermissibly

created a new exception not recognized by the statute, but it has abandoned that argument

on appeal. Instead, G2A now argues that the Tax Treaty “only allows the IRS to obtain

and provide information related to Polish tax liabilities through the same administrative

practices by which the IRS is authorized to investigate tax liabilities under the [Internal

Revenue] Code.” In other words, G2A argues that the Tax Treaty forecloses reliance on

the Treasury regulation and provides the only method by which the IRS may obtain tax-

related information from third parties. G2A bases its argument on the last phrase of

Article 23 of the Tax Treaty:

       If specifically requested by the competent authority of a Contracting State,
       the competent authority of the other Contracting State shall provide
       information under this article in the form of depositions of witnesses and
       copies of unedited original documents (including books, papers, statements,
       records, accounts, or writings), to the same extent such depositions and
       documents can be obtained under the laws and administrative practices of
       each Contracting State with respect to its own laws.

28 U.S.T. 891, Art. 23 (emphasis added).

       As an initial matter, G2A forfeited this argument by failing to present it to the

District Court. To preserve a matter for appellate review, a party must develop the

argument before the district court “at a point and in a manner that permits the court to

consider its merits.” Garza v. Citigroup, Inc., 881 F.3d 277, 284 (3d Cir. 2018) (quoting

                                              7
Shell Petroleum, Inc. v. United States, 182 F.3d 212, 218 (3d Cir. 1999)); see also

DIRECTV, Inc. v. Seijas, 508 F.3d 123, 125 n.1 (3d Cir. 2007). “[M]erely raising an issue

that encompasses the appellate argument is not enough.” Spireas v. Comm’r of Internal

Revenue, 886 F.3d 315, 321 (3d Cir. 2018) (quoting United States v. Joseph, 730 F.3d

336, 337 (3d Cir. 2013)). Rather, the argument must have been made with “exacting

specificity” in the district court. Id.

       Here, in its amended petition to quash the IRS’s summons, G2A gestured toward

its Article 23 argument in a footnote related to standing. But footnoting an issue for

standing purposes is not the same as raising it on the merits. See John Wyeth & Bro. Ltd.

v. CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997) (“[A]rguments raised in

passing (such as, in a footnote), but not squarely argued, are considered waived.”).

       G2A asks us to excuse forfeiture, as we have discretion to do. See Barefoot

Architect, Inc. v. Bunge, 632 F.3d 822, 834–35 (3d Cir. 2011). We will consider forfeited

arguments in “exceptional circumstances” such as when consideration of an issue would

serve a public interest, when an argument is “closely related” to the arguments raised

below, and when its application would not further the purposes of forfeiture, including

the judicial interests that it serves. Tri-M Grp., LLC v. Sharp, 638 F.3d 406, 416–17 (3d

Cir. 2011). None of these exceptional circumstances are present here, so we decline to

excuse G2A’s forfeiture.

       G2A argues that we should excuse forfeiture because its new argument raises an

issue of first impression and future litigants might benefit from our analysis. We disagree

that every novel argument necessarily impacts the public interest just because it is novel.

                                             8
We find no other instances of a party challenging the Treasury regulation in this context,

which suggests that resolution of the question here would impact only the parties to this

case. Compare Gen. Refractories Co. v. First State Insur. Co., 855 F.3d 152, 162 (3d Cir.

2017) (excusing waiver because the implications of the legal question would affect many

insurers and insureds beyond the immediate suit). Other than the novelty of its argument,

G2A offers no other public-interest reason for why we should address the forfeited

argument.

       G2A also argues that it sufficiently previewed in the District Court the

components of its new argument on appeal. We disagree. G2A’s original argument

exclusively required the District Court to interpret § 7602, not decide the issue of whether

the Tax Treaty dictates how the IRS may request tax information from third parties.

Though both arguments assume that the Treasury regulation cannot excuse the IRS from

providing notice before serving a third-party subpoena, the arguments rely on

propositions so distinct that we do not consider them “closely related.”

       Finally, G2A argues that judicial interests which forfeiture seeks to preserve

would not be impacted—because the new argument is a purely legal question and the

government had an opportunity to respond. But courts also have an interest in “promoting

the finality of judgments and conserving judicial resources and preventing district courts

from being reversed on grounds that were never urged or argued before [them].” Lesende

v. Borrero, 752 F.3d 324, 333 (3d Cir. 2014) (quoting Webb v. City of Phila., 562 F.3d

256, 263 (3d Cir. 2009)). Permitting every forfeited legal argument on appeal would

make the forfeiture doctrine the rule, not the exception. Singleton v. Wuff, 428 U.S. 106,

                                             9
120 (1976) (“It is the general rule, of course, that a federal appellate court does not

consider an issue not passed upon below.”). We will enforce the rule here.

       In any event, excusing forfeiture would not change the outcome in this case.

Contrary to G2A’s suggestion, the Tax Treaty does not bind each country to follow the

investigative procedures of its internal law when gathering information in response to a

treaty partner’s request. In fact, Article 23 of the Tax Treaty is not about investigative

procedures at all; it simply allows Poland and the United States to request that each

country provide materials such as “depositions of witnesses and copies of unedited

original documents … to the same extent such materials can be obtained under the laws

and administrative practices” of the producing country. 28 U.S.T. 891, Art. 23 (emphasis

added). In other words, the Tax Treaty discusses the form and extent to which countries

will share information with each other, not how countries may obtain such information in

the first instance. See James P. Springer, An Overview of International Evidence and

Asset Gathering in Civil and Criminal Tax Cases, 22 Geo. Wash. J. Int’l L. & Econ. 277,

288–89 (1989) (describing the purpose of model provisions such as Article 23 in United

States tax treaties as allowing treaty signatories to receive evidence in a form admissible

in domestic judicial proceedings).

                                              B

       The day after the IRS served the summons on CTC, it sent notice of service and a

copy of the summons by registered mail to G2A in Poland. G2A contends this violated

the administrative steps for providing notice under the Hague Service Convention

because Poland prohibits service of foreign documents within its borders by mail.

                                             10
According to G2A, this prohibition on effecting service by mail encompasses the IRS’s

provision of notice of the third-party summons by registered mail.

         The Hague Service Convention provides “a simpler way to serve process abroad,

to assure that defendants sued in foreign jurisdictions would receive actual and timely

notice of suit, and to facilitate proof of service abroad.” Volkswagenwerk

Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698 (1988). It applies in all cases, whether

civil or commercial, where there is occasion to “transmit a judicial or extrajudicial

document for service abroad.” 20 U.S.T. 361, Art. 1. The Convention provides several

methods by which signatories can effect service of process. Primarily, each signatory

must “establish a central authority to receive requests for service of documents from

other countries.” Schlunk, 486 U.S. at 698 (citing 20 U.S.T. 361, Art. 2). Besides

establishing that central authority, a country may consent to other forms of service; for

example, under Article 10 signatories agree not to interfere with “the freedom to send

judicial documents, by postal channels, directly to persons abroad.” 20 U.S.T. 361, Art.

10. But Article 10 also permits signatories to object to service of documents by mail. Id.

         Poland has opted out of Article 10, disallowing service of judicial documents by

mail. See Hague Service Convention, Reservation of Poland; G2A argues that the notice

of summons was a judicial document and that the IRS improperly sent it by registered

mail despite Poland’s decision to opt out of Article 10. G2A asserts that this alleged

violation of the Convention required the District Court to quash the summons to Gate

Arena.



                                             11
       The District Court declined to decide whether notice was delivered in accordance

with the Hague Service Convention. Rather, the District Court held that “[e]ven

assuming, without deciding, that the strictures of the Hague Service Convention are

included in the administrative steps required by Powell, to the extent an administrative

defect exists here G2A has not shown that it was prejudiced by it or that the government

acted in bad faith by issuing the summons.” G2A.COM Sp. z.o.o. (Ltd.) v. United States,

No. CV 17-MC-177-LPS, 2018 WL 4219237, at *5 (D. Del. Sept. 5, 2018).

       We do not consider here whether lack of bad faith and prejudice may excuse the

IRS’s noncompliance with the Convention’s service requirements. Instead, we hold that

the statute’s procedures for third-party summonses, 26 U.S.C. § 7609(a)(1), does not

require service at all, so the Convention’s service requirements do not apply.

       The Hague Service Convention applies to service of documents. 20 U.S.T. 361

(“[D]esiring to create appropriate means to ensure that judicial and extrajudicial

documents to be served abroad shall be brought to the notice of the addressee in

sufficient time.” (emphasis added)). The Supreme Court noted the Convention’s

intentional focus on “service of process in the technical sense” in contrast with the

broader, less formal concept of notice. Schlunk, 486 U.S. at 701. And more recently, the

Court has confirmed “that the scope of the Convention is limited to service of

documents,” without “apply[ing] to any communications that ‘do not culminate in

service.’” Water Splash, Inc. v. Menon, 137 S. Ct. 1504, 1509 (2017) (quoting Schlunk,

486 U.S. at 701).



                                             12
       Likewise, the Internal Revenue Code explicitly differentiates between “service”

and “giving notice.” Under § 7603(a) of the Code, a summons is served, but under

§ 7609(a)(1), notice of a third-party summons shall be given to the person identified in

the summons. And § 7609(a)(2) explains that notice is sufficient when it is served or “is

mailed by certified or registered mail to the last known address of such person.” By its

plain meaning, the Internal Revenue Code permits notice by service or through the mail. 4

                                          * * *

       Because the IRS did not violate either the United States–Poland Tax Treaty or the

Hague Service Convention when it timely sent notice of the third-party summons to G2A

by registered mail, we will affirm the judgment of the District Court.




       4
         G2A argues that the statute provides alternative means of service, not
alternatives to service. That interpretation conflicts with the plain meaning of the statute,
and the cases cited by G2A do not support its theory. For example, Barmes v. United
States, 199 F.3d 386 (7th Cir. 1999) did not address the distinction between service and
giving notice, and nothing in the court’s language suggested that it intentionally equated
the two concepts. And in Fortney v. United States, 59 F.3d 117 (9th Cir. 1995), the
contested issue was whether the IRS must provide attested copies of third-party
summonses to persons about whom information is requested; the court did not even
consider the distinction between service of summons and giving notice.
                                             13
