The IRS paid my office a huge compliment today. Well, maybe it was subtle, backhanded compliment. But, it was a compliment all the same.
It's a no-no for an IRS Revenue Officer to refer or recommend an attorney to a taxpayer facing tax trouble. Conversely, it's a no-no to keep questioning a taxpayer once he clearly expresses an intention to "lawyer-up."
A little context first. Revenue Officers are the ground troops at the IRS. When you owe the Service money, you can expect a visit to your home or office. In the past, the IRS sent Revenue Officers out for liabilities greater than $100,000 in personal debt or if the liability involved payroll taxes. That does not appear to be the case any longer. My office has seen some assignments for less than $50,000 lately.
This morning, a taxpayer came to see us in Oklahoma City with an interesting story to share. He got a visit from a local IRS Revenue Officer. The Revenue Officer wanted to fill out some documentation with the taxpayer, including an IRS Form 433-A and 433-B. These forms tell the IRS how much your income and expenses are. They tell the IRS what assets you have. In short, they inform the IRS as to how "collectible" you are. If direct negotiations go wrong with the Revenue Officer in this or future conversations, however, the IRS now has your financial information (where you bank, where you work, e.g.). They can then levy you. These are very important forms, as you may have imagined.
Somewhere in the conversation, things got uncomfortable for the taxpayer, and he advised the Revenue Officer that he wished to stop the interview and talk to a tax lawyer.
Immediately, the Revenue Officer's tone changed. She blurted out something like, "whatever you do, DON'T hire Travis Watkins' office." Although the Revenue Officer didn't mean it as such, it was a ringing (reverse) endorsement. He retained us later that day.
Here are a few takeaways. The Revenue Officer's statements are likely illegal. 26 U.S. Code 752-Procedures involving taxpayer interviews states at (b) (2), Right of consultation:
[i]f the taxpayer clearly states to an officer or employee of the Internal Revenue Service at any time during any interview (other than an interview initiated by an administrative summons issued under subchapter A of chapter 78) that the taxpayer wishes to consult with an attorney, certified public accountant, enrolled agent, enrolled actuary, or any other person permitted to represent the taxpayer before the Internal Revenue Service, such officer or employee shall suspend such interview regardless of whether the taxpayer may have answered on or more questions. (Emphasis Supplied).
The Code doesn't say that the Revenue Officer can then express an opinion about the taxpayer's decision to consult a professional. It says that the Revenue Officer "shall suspend [the] interview." This harassment and intimidation, and it's meant to be. I have said for some time that the IRS should tell taxpayers that anything they say can and will be used to collect debt. It would work to the IRS' advantage to convey just how serious the IRS is about collecting taxes that day. In turn, the possibility that taxpayer rights would be compromised would be less.
In this case, the taxpayer had not yet researched a tax professional. Under the ciorcumstances, he took the Revenue Officer's statement as a clear endorsement of 1) the IRS' intention to get information from him while he was vulnerable, unrepresented and uninformed about IRS procedure and 2) that Travis Watkins' office would adequately protect his interests.
This taxpayer was savvy. But, don't expect the IRS to quit tactics like this anytime soon. Now, we take over all communications with her. We are investigating the situation, assisting the taxpayer with 433 forms that are laying out a plan that the IRS would accept short of levying the taxpayer for all of the debt owed today.
So, the moral of the story is this. Hire a local licensed tax lawyer who deals with IRS collection procedures and IRS employees every day BEFORE they come to you. If you have been visited by an IRS Revenue Officer, you don't have to take their word for it, hire us!
If you still believe you can handle an IRS Revenue Officer on your own, please consider these strategies:
Log on to TravisWatkins.com and sign up to download The Ultimate Survival Guide for IRS Problems, which is available FREE for a limited time. You can also speak with a tax representative at 800-721-7054 for 30 minutes without charge to you.