If the IRS requests a meeting with a Taxpayer, should the taxpayer and a representative attend? Should only the representative attend? Should neither attend?
Under no circumstances should a taxpayer attend on his or own. Rarely should a taxpayer attend with a Representative – the goal is to keep the client from talking with the IRS.
As long as the information requested by the IRS is provided, it is not necessary for a taxpayer to be present. However, neither attending is not an option. Revenue Agents and Revenue Officers will sometimes threaten a summons in order to speak with the taxpayer…they rarely follow through on this if the requested information has been provided.
A representative has no choice but to play hardball and not produce the taxpayer if he or she has substantial under-reported income. This is an egg-shell situation where anything the taxpayer says can be used against him criminally. SOMETIMES a representative brings a taxpayer to a meeting – it is a judgment call. Sugar gets you more than vinegar, and if there is certainty the taxpayer will not harm himself or herself, a taxpayer may be able to provide clarification to issues.
A large and important factor in the decision process is a recent restructuring of Appeals – AJAC. AJAC is an acronym that stands for Appeals Judicial Approach Cultural (Project). When Appeals receives a case referred to them from a Tax Court filing, they are no longer doing field investigation, but sending it back to the Revenue Agent who proposed the initial assessment.
If the Taxpayer did not appear when requested, the Revenue Agent can ask IRS District Counsel to seek a judicial summons of the Taxpayer. The Court will grant this and the Taxpayer will have to appear. This is a major shift in the balance of power…we will have much to say about this in future blog posts.