What To Do if the I.R.S. Comes Knocking on Your Door
by Asher Rubinstein, Esq. and Adam Nicolazzo, Esq.
According to recent news reports, while the I.R.S. is decreasing its audits of large companies, it is actually increasing audits of individuals and small and medium-sized businesses. If you, your family members or your employees are contacted or visited by the I.R.S., it is important to keep the following in mind:
• Although an I.R.S. agent has contacted or visited you, this does not mean you have done anything wrong.
• Remain respectful and courteous.
• Be sure you understand the nature of the I.R.S. inquiry. If the I.R.S. agent does not volunteer this information, you should ask for it. Take notes to detail exactly why the agent is making the contact or appearance.
• Ask for proof of employment with the I.R.S. and note the I.R.S. agent’s name and identification number.
• Immediately tell the agent you request time to seek advice from a “Tax Representative.”
• Once you make this request, you are under no obligation to answer any further questions. But remain courteous while not revealing information.
Although you have received a letter, phone call or visit from an I.R.S. agent, this does not mean you have done anything wrong. Audit selections are generally made according to a computer model that selects returns based on how dissimilar they are from a national “norm.” Quite often, after supplying information or documentation to the I.R.S. (for example, receipts to substantiate a tax deduction), the I.R.S. is satisfied and the file is then closed.
If you receive a phone call or unannounced visit from an I.R.S. agent, you have the right to request time to speak with a Tax Representative, who should be a tax attorney. Once you request time to speak to a Tax Representative, you do not need to answer any questions and it is against the law for the I.R.S. to continue the investigation without your Tax Representative. See 26 U.S.C. § 7521(b)(2). From then on, further communication is between the Tax Representative and the I.R.S., and the Tax Representative acts on your behalf, challenging the I.R.S. to accept a position favorable to you.
The attorneys at Rubinstein & Rubinstein, LLP have extensive experience with the I.R.S. and with the audit process, and have successfully represented and defended numerous clients against the I.R.S. and negotiated favorable settlements with the I.R.S. We are available to speak with you if you have been contacted by the I.R.S. regarding a request for information, an audit, a notice of tax due, or have any other questions concerning issues relating to taxation or protection of assets.
Asher Rubinstein Kenneth Rubinstein
Rubinstein & Rubinstein, LLP Rubinstein & Rubinstein, LLP
phone: (212) 888-6600 phone: (212) 888-6600
fax: (212) 888-7443 fax: (212) 888-7443