ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – WHEN DEALING WITH IRS AUDITORS AND COLLECTORS BE AWARE OF THE TEN DEADLY SINS
By Robert S. Schriebman
There is new tax legislation that will increase the funding of the IRS in order to enable the agency to hire more auditors (Revenue Agents) and collectors (Revenue Officers). There will be more audit activity and an increased effort to fund the Treasury to make up for the huge expenditure of Covid-related benefits. I believe we will see a more aggressive IRS. The combination of aggressiveness coupled with inexperience is dangerous for everyone – the taxpayer and the IRS as well. It is important to be on the lookout for potential improper conduct on the part of these new agents and collectors.
A Real Life Example
One of my long-time clients owes the IRS and wants to negotiate a monthly installment payment arrangement with the assigned revenue officer (RO). In the process of gathering taxpayer information that would precede negotiations for an arrangement, the RO sent the client a letter requesting certain information and documentation. If the taxpayer failed to honor his request, the letter threatened that my client would be turned over for an audit. I found this threat to be highly unusual and I recalled legislation enacted in the late 90s dealing with the so-called “10 deadly sins.” If a revenue agent or collector commits one or more of these sins, he/she is subject to immediate dismissal. According to the 1998 IRS Restructioning and Reform Act, an employee who is terminated for any violation of these sins is considered removed for cause on charges of misconduct (Act. § 1203(a)). Only the IRS Commissioner can intervene on the employee’s behalf.
The Ten Deadly Sins
The ten deadly sin legislation was a product of extensive Senate Finance Committee hearings headed by the late Senator William Roth (Roth IRA fame). I was proud to be a witness in these hearings and testified twice before the Committee. I worked hand-in-hand with the Senator and his staff to reform the IRS and to create due process procedures for taxpayers. I had a client who was badly mistreated by an RO and the Committee was very interested in my client’s matter. Several of the listed sins were the direct result of my client’s mistreatment.
The IRS must terminate an employee, absent direct intervention by the IRS Commissioner if, in the course of his/her employment one or more of these acts occurred:
- Willful failure to obtain the required approval signatures on documents authorizing the seizure of a taxpayer’s home, personal belongings, or business assets.
- Providing a false statement under oath with respect to a material matter involving a taxpayer or a taxpayer representative.
- Violating the rights of a taxpayer, taxpayer representative, or other employee of the IRS under the US Constitution or under specified civil rights acts.
- Falsifying or destroying documents to conceal mistakes made by any employee with regard to a matter involving a taxpayer or taxpayer representative.
- Assaulting or battering a taxpayer, taxpayer representative or employee of the IRS, but only if there is a criminal conviction or a final civil judgement to that effect.
- Violating the 1986 Code or Treasury regulations, or IRS policies (including the IRS Manual) for the purpose of retaliating against or harassing a taxpayer or other employee of the IRS.
- Willfully misusing the provisions of Code § 6103 (regarding confidentiality of returns and return information) for the purpose of concealing information from congressional inquiry.
- Willfully failing to file any tax return required under the Code on or before the required date, unless the failure is due to reasonable cause and not willful neglect.
- Willfully understating federal tax liability, unless such understatement is due to reasonable cause and not willful neglect.
- Threatening to audit a taxpayer for the purpose of extracting personal gain or benefit.
An IRS employee so charged with any of the above “deadly sins” is entitled to both administrative and judicial review prior to being terminated. If convicted, only the Commissioner can reverse the decision.
If you believe one or more of these deadly sins has been committed in your IRS matter, you should not disregard it. Instead, you should notify the IRS employee or his/her supervisor promptly in writing and request that a new agent or collector be assigned to resolve your matter.
Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD and he is not employed by the EDD or any other agency of the State of California.
Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and California Taxation Practice and Procedure,” both published by Commerce Clearing House.
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