The IRS is utilizing with more frequency a technique that is aimed at getting the taxpayer’s attention—the administrative summons. When a taxpayer receives the summons, he is notified that he must turn over a thorough accounting of his books and other sensitive documents to the IRS. There isn’t a place to hide secrets when receiving a summons, as the taxpayer is required to submit to the IRS Agents everything that the summons covers.
Taxpayers are taking notice of this new, aggressive technique of the IRS, as there has been an increase in disputes of the summons. According to the Taxpayer Advocate Service, there has been an increase of an astounding 300% in 2011 in the number of legal disputes involving administrative summons in relation to the number of legal disputes filed in 2005. These statistics point to the fact that this was the most litigated issue for the IRS in 2011.
Usually, before an administrative summons is issued, the IRS will issue a less aggressive request in the form of an information document request. If there is a failure to cooperate or comply, the IRS may issue an administrative summons. If the taxpayer continues to be uncooperative, it is at this point that the agency can petition the Justice Department for an order from the court, which gives the summons some “teeth,” so to speak. Those taxpayers who refuse to cooperate can be issued sanctions for criminal or civil contempt.
According to reports, the IRS has shown eagerness to issue summons when large quantities of money at speak early on in recent investigations. As is the case with many government agencies, the IRS is trying to collect as much as it can, as quickly as it can. In recent years, the IRS has acquired the ability to obtain more records and documents that could expose abusive tax practices by taxpayers.
The IRS, as is its policy, does not release any information regarding the number of summons it has issued or promised to issue.
In order to work with the significant increase in summons, make sure you contact an appropriate tax professional who can assist you answering a summons, or disputing one if that is your aim. Please be aware, though, that the success rate for disputing a summons is extremely low. If you have a tax issue, it is best to turn to the advice of a competent tax professional who is familiar with the system and with what works in regards to resolving issues with the IRS.
Segal, Cohen & Landis 9100 Wilshire Blvd. Ste. 601E Beverly Hills, CA 90212 (310) 285-3999