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Taxpayers in Southern California who are the subject of an inquiry by the Internal Revenue Service have the right to retain the services of an experienced tax professional to represent them in pending matters with the agency. Once the representative properly informs the IRS that he or she is acting on behalf of the taxpayer under investigation, the IRS must respect that relationship and deal with the representative directly.

Unfortunately, it appears that the IRS has in some cases ignored the taxpayer-professional relationship. According to a report released by the Treasury Inspector General for Tax Administration, some IRS revenue officers circumvented appointed representatives and contacted taxpayers directly. This stands in clear violation of the IRS’s own established procedures enumerated in the Internal Revenue Code.

TIGTA examined a sample of 73 closed cases to determine whether agents were following correct procedures. But in nearly 20 percent of those cases, the watchdog agency found improper conduct. In addition to the instances of direct taxpayer contact, TIGTA discovered that the IRS was not giving taxpayers enough time to obtain representation, and in some cases where the taxpayers had a representative, that person did not receive copies of letters sent by the IRS.

Tax laws and procedures are extraordinarily complex, and experienced representatives, including tax attorneys, are there to protect taxpayers’ interests and help them deal with their tax issues as efficiently and beneficially as possible. Their experience and knowledge balance out the asymmetry of power that can exist when taxpayers deal with the IRS alone. When they are deliberately circumvented by the IRS, however, that asymmetry can reappear, placing the taxpayer at a distinct disadvantage.

IRS officials reportedly agreed with TIGTA’s assessment and also promised to improve their procedures to comply with the rules regarding taxpayers who have obtained representation.

Source: Accounting Today, “TIGTA: IRS Sometimes Ignores Taxpayers’ Representatives,” Roger Russell, Oct. 1, 2012

• Taxpayers should know what options and rights they have in their case with the IRS, whether they are under audit, have received a notice of deficiency or have been threatened with a tax lien. You can learn more by visiting my California IRS investigation page.