TIGTA: IRS Sometimes Ignores Taxpayers’ Representatives

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A report by the Treasury General for Tax Administration has found that IRS revenue officers did not always involve taxpayers’ representatives appropriately in taxpayer interactions during the collection process.

The IRS has a number of policies and procedures to help ensure that taxpayers are afforded the right to designate a qualified representative to act on their behalf in dealing with IRS personnel in a variety of tax matters. However, TIGTA reviewed a statistical sample of 73 of 25,264 Small Business/Self-Employed Division closed field collection investigations, and found that revenue officers were not always involving representatives appropriately in some key actions.

In the sample of 73 cases, TUGTA found that 14 revenue officers deviated from procedures by contacting the taxpayer directly, instead of the authorized representative, not sending copies of taxpayer correspondence to the authorized representative, or not allowing enough time for the taxpayer to obtain a representative. In addition, little documentation was found in managerial reviews indicating that managers checked to ensure that revenue officers were involving representatives in all case actions, providing representatives a copy of all original correspondence sent to taxpayers, and allowing taxpayers sufficient time to obtain representation.

Although none of the taxpayers involved formally complained to the IRS or to TIGTA, the deviations can negatively affect the taxpayers’ ability to obtain appropriate and effective representation during collection investigations. Moreover, these deviations can increase the risk of taxpayers seeking monetary damages from the IRS if its personnel are intentionally disregarding the direct contact provisions of the Internal Revenue Code.

“It is troubling that some IRS revenue officers deviated from longstanding procedures designed to protect taxpayers’ rights,” said J. Russell George, the Treasury Inspector General for Tax Administration.

TIGTA recommended that the director of field collection of the SB/SE Division take steps to provide greater assurance that the existing procedures designed to afford taxpayers their right to appropriate and effective representation are followed during the field collection process.

IRS officials agreed, and plan to take corrective actions.

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Tax practice