IRS: Friend Or Foe?
The answer is trickier than you might think, especially if you just received a dreaded notice, phone call or even more dreaded knock on the door (or visit to your place of business), sometimes with a search warrant, summons or subpoena, from agents or other representatives of the IRS.
Of course, not every case, inquiry or IRS agent is the same. However, certain general observations should be kept in mind should you be contacted.
Though many agents are amicable and pleasant, they are NOT your friend. Usually, their investigations and audits will result in a potential loss of significant income, other property or even a person’s freedom. An experienced, highly specialized tax defense attorney — certainly not a CPA acting alone while trying to be an accountant and attorney — is vitally needed as part of your defense team.
When so much is on the line, get advice from an experienced tax attorney. Call Michael S. Adelman at 856-330-4035 to schedule a consultation.
A Job To Do
First, IRS agents are indeed human beings who, like us, have a job to do. If they are criminal investigators (known as special agents), they are trying to determine whether there have been criminal violations of sections of the United States Code. They may also be acting as agents of a federal grand jury, investigating potential tax and/or nontax violations of the U.S. Code.
If they are Revenue Agents, Tax Examiners or Office Auditors, their job entails the determination of an individual’s (or business entity’s) correct tax liability for the tax year(s)/tax returns that have been assigned to them. And the job of revenue officers includes collecting already determined taxes, either cooperatively or through enforcement tools (liens, seizures, levies, wage garnishments, summonses) at their disposal.
How Should You Respond?
Second, reactions run the gamut: from full, informed cooperation to hostile and intense resistance and everything in between. Again, not every situation can be treated in the same manner. But as in most interactions, an IRS agent would prefer cooperation.
- We do not mean blind, unquestioning cooperation while ignoring basic constitutional, procedural, judicial, administrative and/or appeal rights that every citizen of this country has, but cooperation factoring in those rights.
Each case, investigation or audit is a blend of cooperative — recognizing the agent’s assignment, but insisting that this assignment be scrupulously carried out by following the rules and respecting the rights of taxpayers — and adversarial.
Was It Obvious? Maybe Not So Much.
The underlying and crucial point of this article is, both the investigator and the investigated are human, since (obviously) no two tax investigations or responses and strategies are the same. The stakes and consequences are extremely high, and since there are rules but no rule book per se, an experienced tax attorney, often working in conjunction with a CPA or other knowledgeable accountant, is crucial to:
- Gather a detailed financial, tax and other circumstantial background of the situation which, in all likelihood, has given rise to the criminal or civil tax contact by the IRS.
- Reach out to the representative (be it an IRS agent or an Assistant U.S. Attorney conducting a federal grand jury investigation) of the government to determine what the concerns, suspicions or other issues are from the perspective of the United States/IRS (or other federal agency).
- Serve as a crucial intermediary and buffer at all future times between the client/taxpayer and the investigator(s), auditor or IRS revenue (collection) officer. Stated another way, to try to ensure that all appropriate “rules” are being followed by the government and to make certain that no direct contact by the IRS with the client/taxpayer can be had thereafter unless such direct contact is consented to or otherwise authorized by federal law or regulations.
- Determine and implement a short-term tactical and long-term strategic way to deal with the government investigation (or tax audit), including whether to cooperate and attempt to gain a more favorable (or less severe) outcome based on such cooperation, or to take a fully adversarial and noncooperative posture, in essence making them prove or otherwise establish all the elements of the offense or tax positions as to which the government bears the burden of proof.
- React to developments during the investigation/audit as they occur in a flexible manner, in which attorney, client and (if appropriate for the investigation) accountant are working together as a team, to counter — using all available means — the team of attorneys, investigators (special agents) and accountants (IRS revenue agents) the government typically uses in criminal tax, grand jury, joint (civil and criminal) investigations.
An IRS or federal grand jury investigation or a complex tax audit often takes years from start to finish. Only an experienced tax attorney, familiar with tax controversies and flexible as to strategies, should be consulted and/or retained. The stakes are huge.
Why You Need Our Attorney’s Help
There is no substitute for having an experienced tax lawyer on your side from the very beginning. For almost 48 years, attorney Michael S. Adelman has helped companies and individuals in IRS and federal grand jury matters.
Friend or foe? Cooperate or not? What should the game plan be? Not every case is the same. No matter how overwhelming you feel your tax problem is, take the first step and get an experienced federal tax defense lawyer on your side.