NATIONALLY RECOGNIZED FEDERAL LAWYERS
Last Updated on: 26th September 2023, 12:19 am
How to Prevent IRS Harassment During an Audit or Investigation
In this article, we’ll explain some common problems that arise during IRS inquiries, and give you practical tips to prevent mistreatment by IRS agents. We’ll also discuss your legal protections and how to enforce them.
Common Problems with IRS Audits and Investigations
Here are some typical issues taxpayers face when dealing with invasive or harassing IRS audits or investigations:
- Fishing expeditions – IRS agents asking broad, sweeping questions without reasonable suspicion of wrongdoing.
- Requests for sensitive personal information that’s irrelevant to your tax liability.
- Threats or intimidation tactics, like unannounced visits to your home or business.
- Failure to fully explain the reasons for the inquiry or audit.
- Not allowing you to consult legal counsel or accountants.
- Drawn-out proceedings without resolution.
These types of IRS agent behavior are unacceptable. Fortunately, there are steps you can take to enforce your rights and prevent IRS harassment.
Tips to Protect Yourself from IRS Mistreatment
Here are some practical tips to protect yourself during an IRS audit or investigation:
- Always consult a tax attorney or CPA. Having expert representation is your best defense against IRS overreach.
- Don’t consent to open-ended interviews. Politely insist the agent provide you with a clear explanation of the issues and scope of questioning.
- Don’t answer questions unrelated to the inquiry. You can simply say, “I don’t see how that’s relevant.”
- Record all interactions with the IRS in writing. Follow up phone calls with confirmation emails summarizing the conversation.
- Don’t provide more information than legally required. Answer questions fully, but don’t volunteer extra details.
- Remain professional, calm and courteous in all interactions.
- If you feel mistreated, file formal complaints through IRS channels, your Congressman, and the Treasury Inspector General for Tax Administration.
Taking these steps helps create a paper trail and apply pressure on the IRS to correct any agent misconduct. But you also have specific legal rights that protect taxpayers from harassment.
Your Legal Protections Against IRS Harassment
Several key laws and regulations prohibit IRS agent harassment and limit the scope of audits and investigations. If the IRS violates these rules, you can take legal action to enforce your rights.
Taxpayer Bill of Rights
The Taxpayer Bill of Rights provides ten fundamental rights for all taxpayers, including:
- The right to quality service and fair treatment.
- The right to appeal IRS decisions.
- The right to challenge the IRS position and be heard.
- The right to privacy and confidentiality.
Citing these rights can help restrain invasive IRS agents who overstep their authority. Make sure any complaints reference the specific rights being violated.
IRS agents must provide taxpayers with a comprehensive Publication 1 detailing your rights under audit. This includes:
- Explanation of the audit process and taxpayer rights.
- Description of enforcement procedures like liens, levies and seizures.
- Contact information for taxpayer advocates.
If an agent fails to properly disclose this information, you can file a complaint or sue for damages.
IRS audits and inquiries must be based on “reasonable suspicion” of wrongdoing or tax issues. Fishing expeditions without evidence of problems are prohibited. If you believe the IRS lacks reasonable suspicion, consult a tax attorney about challenging the audit’s legality.
Workplace harassment laws like IRM 1.20.3 protect taxpayers from threatening, intimidating, or offensive conduct by IRS personnel. This includes sexual harassment, discrimination, retaliation, and other mistreatment.
If an IRS agent engages in any type of harassment, document the misconduct and file complaints immediately. This creates a record that can support legal action against the IRS.
Enforcing Your Rights
If you believe an IRS audit or investigation has violated your rights or constituted harassment, here are some enforcement options:
- Administrative Complaints – File complaints through IRS channels like the Taxpayer Advocate Service.
- Inspector General – Report IRS misconduct to the Treasury Inspector General for Tax Administration.
- Legal Action – Consult a tax attorney regarding lawsuits for damages related to IRS abuses.
- Congressional Help – Ask your Senator or Congressman to intervene on your behalf.
Enforcing your rights takes persistence and meticulous record-keeping. But taxpayers have recourse against IRS harassment, and you can protect yourself by knowing the rules and procedures.
Avoiding Problems from the Start
Your best defense against IRS harassment is avoiding tax trouble in the first place. Here are some tips:
- Always file accurate, timely returns and pay taxes owed.
- Maintain thorough tax records and documentation.
- Seek help from a tax professional if you have a complicated return.
- Respond promptly to all IRS notices and inquiries.
- Cooperate fully during audits, but don’t volunteer extra information.
Following the tax rules and being prepared reduces your audit risk. But if the IRS does come calling, knowing your rights and enforcing them vigorously can help prevent harassment.