Photo of Professionals at Bomar Law Firm

Guiding You Through The Legal Process

Photo of Professionals at Bomar Law Firm

IRS has substantial power to collect data with a summons

On Behalf of | Aug 24, 2018 | IRS Issues

When the Internal Revenue Service issues a summons to a taxpayer in Georgia or third-party performing services for taxpayers, the document represents a serious request for information. Failure to comply with a summons for information could prompt the federal government to file a lawsuit against the person or organization. Although a party might have a good reason to resist disclosing information, the chances of gaining a favorable ruling in court against the IRS are low.

A summons could demand information such as the books for a business, other financial records or data about account holders at a financial institution. A party that chooses to ignore or refuse a summons could end up facing a court order obtained by the U.S. Department of Justice that will force compliance. The option to fight the summons in court remains, but a court will want legitimate reasons for withholding information from the tax agency. While the legal standards are high, attorney-client privilege or work product protection might satisfy a court.

In addition to a regular summons that applies to a single taxpayer, the IRS also has the power to issue a blanket summons known as a Joe Doe summons. This document applies to multiple taxpayers within a certain group, and the IRS has used this power to investigate people suspected of sheltering assets in offshore accounts.

A person confronted by an IRS summons or the less intimidating information document request could ask an attorney for advice. Legal counsel could evaluate the potential of fighting a summons or represent the client after the taxpayer supplies the requested information. An attorney could strive to document the person’s compliance with tax laws. Negotiations have the potential to broker a settlement that allows someone to pay taxes and avoid negative consequences like a wage levy or tax lien.

Categories

Archives