Civil IRS Tax Summons
If you have been served a Civil IRS Tax summons in regards to being the target of the civil investigation or a third party to the investigation you have many rights afforded to you by the Bill of Rights Act of 1988. To that extent, if you ask for an attorney, they must stop questioning you; you may be able to be reimbursed for your costs in locating, transporting and copying the documents. You are entitled to have your US Tax attorney present during the questioning. You are entitled to a transcript of the interview if the IRS is recording it, or alternatively you are allowed to record the interview with proper notice to the IRS. These rights can be compromised if you have an inexperienced tax lawyer. You may have valid objections to make in regards to compliance with the tax summons issued by the IRS. If you raise objections, it is the IRS that must carry the burden. That burden is to establish a prima facia case that the summons issued is for a legitimate purpose, relevant, requests information not in the hands of the IRS, and all administrative codes have been followed. If the IRS fails to establish that burden, your summons can be quashed and you will NOT have to be interviewed by the IRS. The following is the code that governs IRS summons.S 7602. Examination of Books and Witnesses (a) Authority to Summon, etc
For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect of any internal revenue tax, or collecting any such liability, the Secretary is authorized--
(1) To examine any books, papers, records, or other data which may be relevant or material to such inquiry;
(2) To summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary may deem proper, to appear before the Secretary at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and
(3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry.
(b) Purpose may include inquiry into offense
The purposes for which the Secretary may take any action described in paragraph (1), (2), or (3) of subsection (a) include the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws.
(c) Notice of contact of third parties
(1) General notice
An officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer with respect to the determination or collection of the tax liability of such taxpayer without providing reasonable notice in advance to the taxpayer that contacts with persons other than the taxpayer may be made.
(2) Notice of specific contacts
The Secretary shall periodically provide to a taxpayer a record of persons contacted during such period by the Secretary with respect to the determination or collection of the tax liability of such taxpayer. Such record shall also be provided upon request of the taxpayer.
This subsection shall not apply--
(A) to any contact which the taxpayer has authorized;
(B) if the Secretary determines for good cause shown that such notice would jeopardize collection of any tax or such notice may involve reprisal against any person; or
(C) with respect to any pending criminal investigation.
(d) No administrative summons when there is Justice Department referral
(1) Limitation of authority
No summons may be issued under this title, and the Secretary may not begin any action under section 7604 to enforce any summons, with respect to any person if a Justice Department referral is in effect with respect to such person.
(2) Justice Department referral in effect
For purposes of this subsection--
(A) In general
A Justice Department referral is in effect with respect to any person if--
(i) the Secretary has recommended to the Attorney General a grand jury investigation of, or the criminal prosecution of, such person for any offense connected with the administration or enforcement of the internal revenue laws, or
A Justice Department referral shall cease to be in effect with respect to a person when--
(i) the Attorney General notifies the Secretary, in writing, that--
(I) he will not prosecute such person for any offense connected with the administration or enforcement of the internal revenue laws,
(II) he will not authorize a grand jury investigation of such person with respect to such an offense, or
(III) he will discontinue such a grand jury investigation,
(ii) a final disposition has been made of any criminal proceeding pertaining to the enforcement of the internal revenue laws which was instituted by the Attorney General against such person, or
(iii) the Attorney General notifies the Secretary, in writing, that he will not prosecute such person for any offense connected with the administration or enforcement of the internal revenue laws relating to the request described in subparagraph (A)(ii).
(3) Taxable years, etc., treated separately
For purposes of this subsection, each taxable period (or, if there is no taxable period, each taxable event) and each tax imposed by a separate chapter of this title shall be treated separately.
(e) Limitation on examination on unreported income
The Secretary shall not use financial status or economic reality examination techniques to determine the existence of unreported income of any taxpayer unless the Secretary has a reasonable indication that there is a likelihood of such unreported income.