What are my rights in an IRS audit?

[Rick Lee]

They can do that for not cooperating with an audit? Don't they need some modicum of evidence that you owe them something in order to seize assets? And even if it's a civil infraction, if they're seizing assets (which I consider money to be), surely there must be some due process involved. I just don't get how lawful personal property can be seized if no payment is owed. When did that become legal? If the IRS adjusts my returns on their own and then claims I owe them something, that'd be a different story. I'm talking about NO accusations of underpayment, just a letter telling me I've won an audit by random selection.

[boba]

Originally Posted by Rick Lee

surely there must be some due process involved.

There is, they determine you owe the U.S.Treasury $xx.xx or that you might owe that amount, they then write you a letter, they also send a notice to you bank freezing your account or whatever action they deem appropriate. They then take your money, you can then try to get it back.

That is the process or something like it. It might be a bit light on the "due" part.

[nynor]

rick, i am NOT making this up. they did it to my uncle. it cost him a lot of money. end of story. he had ZERO recourse.

[enzo1]

[Rick Lee]

Originally Posted by boba

There is, they determine you owe the U.S.Treasury $xx.xx or that you might owe that amount, they then write you a letter, they also send a notice to you bank freezing your account or whatever action they deem appropriate.

Well, that's the kind of thing I'd respond to and there is an appeals process for that. Being told you owe taxes is a world away from being told you were randomly selected for an audit. If you owe, you gotsta pay.

[nynor]

wait. you were saying before that you'd have them give you a warrant....

[RWebb]

two possibilities here:

1 "a letter telling me I've won an audit by random selection" i.e. TPCMP or whatever tha acronym is

2 they have "some modicum of evidence that you owe them something"

I dunno for sure if they can compel you to attend, seize whatever in case 1 or 2, but I'd bet they can.

I'm sure there is some book somewhere on what they can do to you.

Another fun option is to ask the IRS what they can do to you. You could even send them a FOIA request.

[Gogar]

Lots of long replies here with not much info.

You CAN choose not to comply with an audit, at which time the IRS will perform the audit without you, and send you an amended return and a bill, if they determine you owe more.

You can pay at that time, or choose not to. If you choose not to pay, they will use the tools at their disposal to make you pay, ala jail or seizure, etc.

The audit is your chance to "prove your math", and if you want to be a dick and see what they do, then you can let them make up their own math.

At that point, you can't complain. They gave you the chance, and you refused to play. You don't get to play after the fact because you don't like the outcome.

I went through an audit for my small business
and I was ready and had kickass math, and I walked out in less than 90 minutes with no change to my return.

[Rick Lee]

Originally Posted by nynor

wait. you were saying before that you'd have them give you a warrant....

Well, if they say I've underpaid, which is not the same thing as a random audit, then they have probable cause to get a warrant. I mean, I've signed my name to my return and they've found it to be in error. So I'm in some kind of hot water. I'd rather fix that, or at least discuss it amicably, than fight it, assuming it's not some crazy amount of money, as I did years ago when they adjusted my return by $200. But they do a lot of random sampling and people get these letters and assume they're getting hauled into court. I don't see how a random audit equals probable cause of a crime or some wrongdoing having been committed. I fully understand that I can't ignore a warrant or summons.

[RWebb]

2nd item from Google search: irs civil enforcement power

was this:
Internal Revenue Manual - 25.5.10 Enforcement of Summons

[Rick Lee]

That's not surprising. I figure a summons means they mean business. But, AFAIK, a letter that you're getting audited is not a summons.

[cbush]

I think Gogar summed it up pretty well. I would not think of a notice of an audit as a summons as much as an opportunity to tell your side of the story. You can choose not to. No Constitutional issues there. I like being able to tell my side of the story.

The IRS has been pretty fair to me over the years. While I have never had an audit per se, they have corrected my returns a few times..sometimes I get money back, sometimes, I made a mistake, and have to pay more.

As a government employee (military) I see the IRS folks as I see military folks--regular guys trying to do their jobs. Why try to screw with them? As folks have stated, they have the legal tools to make your life miserable if you do and they have the court system on their side also.

But you are correct- you can ignore them or ask for a warrant if that makes you happy. Good luck with that

[Shaun @ Tru6]

Originally Posted by Rick Lee

What incentive is there to cooperate with an audit?

If you have nothing to hide, what incentive is there to not cooperate?

Put another way:

What is your ROI on not cooperating?

[ODDJOB UNO]

thank you rickster for reminding me.........................


just sent off a whopping check to the IRS in san francisco,calif for my 3rd and 4th quarter quarterlys.


note BOTH EARLY! and thats how ya play the game.


also emptied change draw and sent it off to the navajo school for obese girls to keep the 3'6"-4ft wide navajo girl off my azz!


i ended up years ago, with (2) FINE remington rifles dirt azz cheap from a contractor who was slapping a fat hawgs azz making bucks building homes. i mean rolling in the bucks. all the toys and then some including horses. lots of horseys.


one day he was out riding his horseys. he walked behind one and got kicked HARD. like real bad. next thing he has a heart attack. has NO INSURANCE. medical/hospital bills ate him alive. then he owed taxes. next thing while in hospital, IRS comes a knocking and starts seizing items from his biz and home. had to put a sunday ad in the republic paper "selling guns" cheap. and by gawd i got them damn cheap, cuz he was selling EVERYTHING to pay off IRS and hospital. going bankrupt doesnt even stop them if ya owe them!

[Porsche-O-Phile]

Summary thus far:

"When you're wrong, you're wrong"
"Even when you're right, you're wrong"

Sounds kinda' like marriage - if you've got that one nailed down this should be a piece of cake! Just nod a lot and say "yes, whatever you say".

In all seriousness I admire your resolve in standing up for yourself and for the Constitution. However, as we all sadly know, our government crossed the line of being accountable to the people (as described in the Constitution) a long time ago. If you're going to mess with the IRS, I'd look at hiring F. Lee Bailey, the O.J. defense team, that guy who defended Kalhid Shiek Mohammed and everyone/anyone else with a law degree and a reputation of winning at all costs.

I'm sure it takes a certain amount of pathaological addiction to power and control to be an IRS auditor. I imagine taking a hard stance with someone having a personality defect like that is inherently looking for trouble, especially when they have the full power of the federal government behind them. You're a successful guy with a lot to lose and who's put a lot of effort into getting it... Consider that.

I wouldn't even return their phone call without retaining a lawyer. A good one with a proven history in this area.

[Rick Lee]

Well, I've never been "invited" for an examination and really don't have much to worry about, since my taxes are clean. I"m just wondering how it all works. If I owe, I owe. I'll pay. I just won't assist in a fishing expedition. I don't know how I could get into a big fight with the IRS, as I have a pro (a Pelican, actually) do my taxes. So any discrepancy is likely to be small and something I can afford.

The IRS does some random audits, not because they want to catch people with their pants down or pad the US Treasury some more, but rather just to get a baseline for what kind of compliance exists in certain demographics. This actually makes perfect sense. If they really wanted people to participate and be honest about it, they'd offer immunity to anyone they selected for an audit. I mean, they're only picking people a year or two after their taxes are filed and considered all done. They don't do it in February for W2 people who have no history of tax issues. They could really do a public service and take the fear factor out of it by auditing people after giving them some kind of use immunity for the event. If someone's taxes turn out to be dirty, they can use that as a warning to clean it up next year.

[sammyg2]

They make the rules.
They interpret the rules.
They enforce the rules.

Who the hell is gonna tell them they over-stepped their bounds, the supreme court?
The only thing they fear is bad publicity because it makes their bosses mad to be painted as the bad guys on TV.

[jwasbury]

From the perspective of this professional bean-counter, the professional musician has the "gold star" reply to the OP's query.

Once upon a time when I was a CPA in public practice (work in corp finance these days), I represented clients who were under audit by the IRS and State tax depts. Your best bet if you are selected for audit is to cooperate and get them out of your way as quickly as possible. Bury your head like an ostrich and they will probably write up an assessment, which you can appeal (huge amounts of time and $$). Ignore the assessment and they will get a judgement against you and enforce the judgement by placing a lien on your property, seizing assets...

Originally Posted by Gogar

Lots of long replies here with not much info.

You CAN choose not to comply with an audit, at which time the IRS will perform the audit without you, and send you an amended return and a bill, if they determine you owe more.

You can pay at that time, or choose not to. If you choose not to pay, they will use the tools at their disposal to make you pay, ala jail or seizure, etc.

The audit is your chance to "prove your math", and if you want to be a dick and see what they do, then you can let them make up their own math.

At that point, you can't complain. They gave you the chance, and you refused to play. You don't get to play after the fact because you don't like the outcome.

I went through an audit for my small business
and I was ready and had kickass math, and I walked out in less than 90 minutes with no change to my return.

[RWebb]

Originally Posted by Rick Lee

That's not surprising. I figure a summons means they mean business. But, AFAIK, a letter that you're getting audited is not a summons.

yeh I guess so. You could ask them "Do I have to?" every time they suggested or told me to do something. Also, ask them to spell out your rights and what happens or could happen if you do not show for the audit.

Best would be to nail down the law exactly, then find out the general practice of the IRS Office or person in charge of your azz.

That would cost $$, maybe lawyer level $$. Tax lawyers are specialists, so that will up the cost.

They always tell you not to perform brain surgery on yourself (something I have always adhered to), and the analog here would be that if the tax man plans to perform brain surgery on you -- by going up thru your rectum, you will be well advised to pay for a hired gun on your side.

Again, the great thing about a representative (doesn't have to be a lawyer) at the audit is they can truthfully say "I don't know" and "let me contact my client to find those documents" so "why don't we proceed on any other items now?" Then, they can call the IRS agent and say "He can produce the docs for item X but it may take him a while; can he have xxx days? Oh BTW I feel certain those will be insignificant/in his favor -- do you still want those documents???"

[Hugh R]

My brother got audited about 20 years ago because he didn't file, you know the old saw "Taxes are illegal, taxes aren't in the consitution" the Wesley Snipes defense. One day, they emptied his bank accounts (all) and attached his paycheck. He set up a payment program and a year later they emptied his accounts again, even though he was current on payments. He called them to complain and they basically said "we can do anything we want go eff yourself".