A Good Tax Representative Protects Their Client
The IRS policies require that an IRS agent work closely with a criminal investigators. They have no obligation to inform the taxpayer of a criminal investigation when they are providing the information that is gained freely in an audit or tax filing review. Taxpayers are not protected from criminal prosecution. Any information being provided to an IRS during your audit or review process are not protected under the law and must be handed over to a criminal investigator. What is even more important for your representative to be aware of is that the IRS agent is under no obligation to tell him or her that their client is under or subject to an investigation. What they will tell you is that such an investigation is possible and that pertinent information will be provided to criminal investigators. This is true even if the taxpayer or their representative asks the IRS agent directly if the information will be used for a criminal investigation.
Representatives should know that that a simultaneous criminal investigation may also be underway and that certain actions taken by an IRS agent during a civil review of a tax filing or an IRS audit are indicative of a criminal investigation. The representative for a taxpayer should take every precaution not to offer information that will be used in a criminal investigation and should not try to predict how the courts will apply the IRS new policies. They should instead assume that there is a possible criminal investigation and not offer any information that will hurt their client when they experience certain actions by the IRS agent during the civil review.
(1) a sensitive transaction is being given a considerable amount of interest from the IRS agent;
(2) the IRS agent doesn't rely on a summary of documents or review of existing documents but asks for copies of a large number of documents; and
(3) the agent poses questions that focus on the intent of the taxpayer, as opposed to the mechanics of a particular transaction.
What's difficult is knowing what or when to ask the question. A tax specialist can't just ask if his or her client is under criminal investigation because that might be akin to asking a police officer when being questioned for a traffic ticket if they are they interested in what is in the trunk of their car. The question would cause the officer to check the trunk. Similarly, if an IRS agent is asked if their client is under criminal investigation it could very likely cause the agent to increase the scrutiny the client is being put under. However, if they don't ask - they could very likely be providing information that could cause their client to go to jail.
The recommendation and the procedure taken by every experienced tax professional or attorney is to have a list of questions for the civil IRS agent that they ask before the audit or tax review begins. This will minimize the potential for suspicion.
The list should include such questions as: are you more interested in income or deductions? What are your primary concerns? What is the specific cause for this audit or review?
By having a list of questions posing an additional question about the potential for a criminal investigation makes it possible to receive important information for their client without causing undue scrutiny from the IRS agent. The best possible manner in which to ask the question about a possible criminal investigation is:
"I know with the recent new policy of the IRS - it's important for me to ask the question in every audit whether I think it is necessary or not given the policy that allows agents to conduct civil and criminal investigations simultaneously for the same taxpayer, it is important for me to ask whether my client is also facing criminal investigation."
If the IRS agent responds in the way that is recommended and set forth in the IRS policy - "I am conducting a civil investigation, but the information I receive can be shared with criminal investigators"- then it is clear that the taxpayer is most likely under criminal investigation and their representative should take all precautions to protect their client and their Constitutional right to not provide information that will convict them in a criminal prosecution. If the agent replies "there is not a parallel investigation for criminal intent", then the tax representative should immediately document the reply in the file, so that if it does turn out that there was a criminal investigation - the basis to have all the evidence suppressed has be laid.
The fact of this new policy is that it creates the question whether our tax system which is based on self-assessment and voluntary compliance can remain in tact if the agents who hold the responsibility for maintaining that system are free to hide information from and even mislead taxpayers? Furthermore, it should be asked whether the new IRS policy that allows agents to hide parallel investigations will make it tougher for them to receive from taxpayers their compliance with the federal tax system, or will it breed contempt? The answer rests with the IRS. If parallel investigations become widely and routinely used against unknowing and unwitting taxpayers and criminal investigators begin relying on civil agents to gather evidence for criminal prosecutions, the cases where such a policy is warranted may result in more court opinions that will suppress evidence. On the other side, public outrage over IRS abuses could force Congress to impose restrictions on the Service's ability to solicit information voluntarily from taxpayers and could lead to greater costs. But if "parallel" investigations are used sparingly and only under the worse incidents of tax abuse, and if the policies are not allowed to let criminal agents direct the activities of civil agents in most circumstances then such investigations may withstand scrutiny. It is hard to imagine, however, that IRS agents, now explicitly authorized to conduct parallel criminal and civil investigations, will not fully avail themselves of that authority whenever the opportunity arises.
Don't take any chances with the IRS having a TAX REPRESENTATIVE is very important for your protection PREPAID ANNUAL TAX REPRESENTATION is available DON'T WAIT check it out today!
Related posts:
- What Is the Work of Insurance Agents and Their Role to the Consumer?
- Know the Benefits of Understanding Title Insurance Agents and Their Role
- At A Price – Corporation Protects Assets
- Insurance Continuing Education – Insurance Agent Responsibility
- The Role of the Insurance Agent to the Consumer
- A Simple Guide Looking At Taxes And V.A.T Investigations
- How To View An IRS Notice
- Ways To Avoid A Tax Audit
- Understanding The Offer In Compromise Application
- Understanding Insurance Agents and Their Role