The Internal Revenue Service (IRS) holds significant authority to investigate the accuracy of taxpayers’ federal income tax returns. This authority is essential to maintain the integrity of the tax collection system and prevent fraudulent or inaccurate filings. However, it is crucial to understand that the IRS’s investigative powers are not unlimited. Various legal provisions, including the Internal Revenue Code (IRC), the Constitution, and other sources of law, establish boundaries for the IRS’s actions in determining tax liabilities and modifying returns.
Methods of Determining Accuracy
Under the IRC, the IRS has the power to assess the accuracy of tax returns through several means, including examining records, conducting testimony under oath, and issuing administrative summonses to compel the submission of evidence if necessary.
Voluntary Information Sharing
Initially, the IRS typically requests taxpayers to voluntarily provide any information it requires. This request is made through an information document request (IDR), which outlines the specific documents and records the IRS needs from the taxpayer. Taxpayers often comply with these requests, aiming to expedite the audit process.
Limits on Information Disclosure
Taxpayers are not obligated to disclose information solely based on the IRS’s request. If there is certain information, such as records or testimony, that you choose not to share for any reason, the IRS must issue an administrative summons to compel you to produce that information. However, the IRS cannot enforce a summons on its own; it must obtain an order from a federal court to compel you to provide the requested information.
Criteria for Enforcement Order
The Supreme Court has established four necessary criteria for a court to grant an enforcement order for an administrative summons. These criteria ensure that the IRS’s investigation serves a legitimate purpose, the information sought is relevant to that purpose, the IRS does not already possess the information, and the administrative steps required by the IRC have been followed. If any of these requirements are not met, the summons should not be granted, and you should not be compelled to produce the requested information.
Safeguarding Your Rights
If you receive an IRS Audit Letter or IRS Summons, it is crucial to seek professional assistance immediately. Our experienced team at McCauley Law Offices specializes in tax law and will help protect your rights, navigate the complexities of the IRS audit process, and ensure compliance with the law.
Don’t face an IRS summons or audit alone.
Contact McCauley Law Offices today to schedule a free evaluation.
Our dedicated team is ready to provide you with expert guidance and strategic representation, safeguarding your interests throughout the process.
Call us immediately at 877-TAX-JAMS to secure your rights and receive the professional assistance you deserve.