The Administrative Summons

Missing Tax DeadlineA person represented by counsel may be required to attend an interview if summoned to do so. An Administrative Summons is issued under authority of IRC section 7602. Thus, even a taxpayer who is represented by a Power of Attorney, may nevertheless, be summoned to appear to give testimony regarding the tax issues at hand.

The IRS’s position, which is supported by the courts, is that the Administrative Summons can force the personal appearance of the citizen even if he or she is represented by counsel. Just because a taxpayer is summoned does not mean he or she cannot have a Power of Attorney representative with them. A taxpayer has a right to counsel with him and to consult with their Power of Attorney at every step of the process.

The IRS often threatens a taxpayer with a summons if they don’t agree to appear for a regular interview. In a routine examination, however, the chances of a summons are very slim. The reason is: the IRS has no burden of proof in a typical audit situation. If the taxpayer does not cooperate, the IRS simply disallows the deduction or imputes the income. This then puts the burden on the taxpayer to either pay the tax or file an Appeal. If appealed, the burden of proof remains on the taxpayer to prove the correctness of his or her income or the allowance of his or her deductions.

In a collection situation, a Revenue Officer will often issue a summons to an uncooperative taxpayer who does not provide financial information. This is easily remedied by providing a correlated and complete 433-A or B. The taxpayer will not have to appear!

In either situation, what is most likely to happen is either the agent or the agent’s manager will issue a threatening letter to the representative and taxpayer that a summons enforcement proceeding may be pursued or a similar letter is received from an IRS attorney.

What is important to know is that summonses are not self-enforcing. When a summons is issued and not responded to, it is dead unless the IRS goes to court and gets a judicial order. The IRS District Counsel makes the decision on this and it is by no means automatic.

If the agent gets the information requested, usually from a taxpayer’s representative, it is highly unlikely IRS counsel will approve initiation of a Summons Enforcement Proceeding. The key reason is: to get an order from the court enforcing the summons, they must prove the information is not already in their possession. The Powell case, United States v. Powell, 379, U.S. 48 (1964) provided or established the case law for this – that the IRS bears the burden of proof in a summons enforcement proceeding.

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