15 Sep 23

How to Challenge an IRS Summons for Documents or Testimony

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Last Updated on: 24th September 2023, 07:42 pm

How to Challenge an IRS Summons for Documents or Testimony

Dealing with the IRS can be intimidating, especially if you receive a summons requesting documents or testimony. A summons is a legal demand that requires you to provide information to the IRS. You may feel anxious or unsure of what to do next. But there are ways you can challenge an IRS summons. This article provides a helpful guide on your rights and options if you get that dreaded summons letter.

What is an IRS Summons?

An IRS summons is a legal demand for a taxpayer or third party to provide documentation, give testimony, or both, to assist in an IRS investigation or audit. The IRS is authorized under Internal Revenue Code Section 7602 to issue summons to examine books, records, papers, or other data that may be relevant to an inquiry. The types of IRS summons include:

  • Summons for taxpayer records or testimony
  • Third-party summons for records or testimony
  • John Doe summons for unnamed taxpayers
  • Books, papers, and records summons

In most cases, the IRS must first attempt to obtain the information voluntarily from the taxpayer before issuing a summons. But if the taxpayer refuses to cooperate, a summons can compel compliance. Failure to comply with an IRS summons may lead to enforcement action or even criminal prosecution.

Should You Comply with an IRS Summons?

When you receive an IRS summons, you may feel inclined to comply as soon as possible. But it’s important to carefully review the summons first. Consider getting help from a tax professional to understand your rights and obligations. Although the IRS has broad authority with summons, there are valid reasons for challenging one. Here are some key factors to consider:

  • Is the purpose of the summons legitimate? The IRS must have a legitimate tax investigation purpose.
  • Is the information relevant? The requested information should be relevant to the investigation.
  • Does the IRS already have the data? They cannot request information they already possess.
  • Were proper procedures followed? The IRS must adhere to IRC rules and regulations.
  • Is compliance overly burdensome? You may request the scope be narrowed.
  • Are there confidentiality concerns? Some records may require privacy.

If you have doubts about the appropriateness of the summons, it’s recommended to consult with a tax attorney before taking any action. Carefully weigh the risks and benefits of compliance versus challenging.

How to Contest an IRS Summons

You have the right to contest an IRS summons. There is a process to formally object and request the summons be quashed or modified. Here are key steps in challenging a summons:

  1. Seek legal counsel. Have a tax attorney review the summons and advise if you have valid grounds to contest it.
  2. File a petition to quash. You must file a legal petition in U.S. District Court asserting reasons why the summons should be quashed or modified.
  3. Notify the IRS. Send the IRS a copy of the petition and request they suspend enforcement while it’s in court.
  4. IRS files motion to compel. The IRS will likely counter with a motion to compel compliance with the summons.
  5. Prove your objections. You must convince the judge your objections to the summons have merit.
  6. Court decides. The judge will rule on the petition to quash and either agree with you or order compliance.
  7. Comply or appeal. If you lose, you can comply or appeal to a higher court.

This is a simplified overview of the process. There are strict deadlines and detailed procedures for contesting a summons. Having legal guidance maximizes your chances of success.

Basis for Challenging an IRS Summons

There are various grounds on which you can challenge an IRS summons. Common reasons include:

  • Lack of legitimate purpose – The IRS must prove the summons relates to an ongoing investigation with a legitimate purpose. You can argue no valid tax issue exists.
  • Request is too broad – Seek to narrow an overly broad summons requesting an unreasonable volume of documents or excessive testimony.
  • Information is privileged – Certain confidential communications with an attorney or doctor may be protected by legal privilege.
  • Summons procedurally flawed – You can challenge if proper notice, due process, or legal protocols were not followed.
  • Summons issued in bad faith – Petition to quash if you can prove the summons was issued solely to harass you or pressure settlement.

The judge will require evidence to back up your claims. You have the burden to prove your objections to the summons are justified. It’s a high bar to meet.

What if You Don’t Respond to an IRS Summons?

Ignoring an IRS summons is never advisable. The IRS takes summons noncompliance very seriously. If you disregard a summons, the IRS can pursue enforcement through the courts. Typical consequences of not responding include:

  • The IRS can file a petition to enforce the summons in U.S. District Court.
  • You may be ordered to appear before a judge to explain why you didn’t comply.
  • The judge can issue an order directing you to comply with the summons.
  • Further noncompliance can lead to charges of contempt of court, with fines or jail time.
  • Ongoing noncompliance may result in criminal prosecution.

In most cases, the courts will order enforcement if the summons meets the Powell criteria of legitimate purpose, relevance, procedure, and lack of possession. Given the severe penalties, it’s prudent to seek legal counsel if you want to contest rather than disregard a summons.

Getting Help with an IRS Summons

Don’t go it alone when dealing with an IRS summons. Consult with a tax attorney or CPA experienced in these matters. An expert can advise you on the appropriateness of the summons and viability of any challenge. Other ways a tax pro can help:

  • Review the summons and assess any objections or issues.
  • Handle communication with the IRS on your behalf.
  • Draft petitions and motions contesting the summons.
  • Represent you in court if it reaches that stage.
  • Negotiate with the IRS for a favorable settlement.
  • Ensure compliance if the summons is enforced.

Hiring professional help gives you the best chance of having an improper summons withdrawn, limited, or dismissed. If the summons is valid, a tax expert can facilitate compliance on your behalf.

Key Takeaways

  • Carefully review any IRS summons you receive and understand your options.
  • You have the right to contest a summons if you have valid objections.
  • Hire a tax attorney to assist in challenging or responding to a summons.
  • Never ignore an IRS summons due to the risk of enforcement action.
  • Be prepared to prove why compliance would be inappropriate or burdensome.
  • If the courts ultimately order compliance, work with counsel to do so promptly.

Dealing with an IRS summons can be unnerving. But taking proactive steps with professional guidance can help you reach the best outcome. Educate yourself on the process, know your rights, and don’t hesitate to push back if you have legitimate concerns. With the right approach, you can respond appropriately and try to limit the disruption to your finances and peace of mind.