Articles XIX and XXI of the 1942 Convention Respecting Double Taxation (1942 Convention) between the United States and Canada require the United States, upon request and consistent with United States revenue laws, to obtain and convey information to Canadian authorities to assist them in determining a Canadian taxpayers income tax liability. Respondent Canadian citizens and residents maintained accounts in a bank in the United States. In attempting to ascertain their Canadian income tax liability for certain years, the Canadian Department of National Revenue (Revenue Canada), pursuant to Articles XIX and XXI, requested the Internal Revenue Service (IRS) to provide pertinent bank records. After the IRS Director of Foreign Operations concluded that the requests fell within the 1942 Conventions scope and that it would be appropriate for the United States to honor them, the IRS served on the bank administrative summonses for the requested information, but, at respondents request, the bank refused to comply. Respondents then petitioned the Federal District Court to quash the summonses, contending that because under 26 U.S.C. 7602(c) the IRS may not issue a summons to further its investigation of a United States taxpayer when a Justice Department referral for possible criminal prosecution is in effect and because Revenue Canadas investigation of respondents was "a criminal investigation, preliminary stage," United States law proscribed the use of a summons to obtain information for Canadian authorities regarding respondents American bank accounts. This argument was rejected, and the District Court ordered the bank to comply with the summonses. The Court of Appeals reversed, holding that before the IRS may honor a request for information under the 1942 Convention it must determine that Revenue Canadas investigation has not reached a stage analogous to a Justice Department referral by the IRS and that here the affidavit submitted by the IRS failed to state that such a determination had been made with respect to Revenue Canadas investigation of respondents.

Held:

Neither the 1942 Convention nor domestic legislation requires the IRS to attest that a Canadian tax investigation has not reached a stage analogous to a Justice Department referral by the IRS in order to obtain enforcement of a summons issued pursuant to a request by Canadian authorities under the 1942 Convention. So long as the IRS satisfies [489 U.S. 353, 354] the requirements of good faith set forth in United States v. Powell, 379 U.S. 48, 57-58 - that the investigation be conducted for and relevant to a legitimate purpose, that the information sought not be already in the IRS possession, and that the statutorily required administrative steps have been followed - and complies with applicable statutes, it is entitled to enforcement of its summons, whether or not the Canadian tax investigation is directed towards criminal prosecution under Canadian law. Pp. 359-370.

(a) Aside from whether the 1942 Convention, in conjunction with 26 U.S.C. 7602(c), narrows the class of legitimate purposes for which the IRS may issue an administrative summons, the IRS affidavits plainly satisfied the requirements of good faith set forth in United States v. Powell, supra. Pp. 359-361.

(b) Section 7602(c) does not, by its terms, apply to the summonses challenged in this case, for its speaks only to investigation into possible violations of United States revenue laws, forbidding the issuance of a summons "if a Justice Department referral is in effect." Therefore, 7602(c) does not itself appear to bar enforcement of the summonses in question. This conclusion is supported by 7602(c)s legislative history indicating that Congress did not intend to make enforcement of a treaty summons contingent upon the foreign tax investigations not having reached a stage analo