Taxation & Estate Planning

Can the IRS conduct a collection interview at your house or business?

By howardlevy

IRS Revenue Officers continue to become more aggressive in the field. Here is a new approach to look for:

I had a recent case in which a Revenue Officer sent my client a notice stating that that there would be an interview at my client’s house.  These meetings usually take place at an IRS office.  It was a somewhat bold move to request access to a personal residence for an interview in a collection case, especially because my client lived with her mother.  This made my client very uncomfortable, for good reason (then again, wasn’t that the point of the IRS request?).

Here is my response:

     1.     The IRS has no right to access a taxpayer’s private living quarters or business without the permission of the taxpayer or a court ordered writ of entry.   Sometimes it makes sense to grant permission or access, but not this time.

     2.     Under Internal Revenue Code 7521(c), the IRS cannot compel the presence of a taxpayer at a meeting if the taxpayer has representation. 

     The relevant parts of Section 7521 state as follows:

Any attorney, certified public accountant, enrolled agent, enrolled actuary or any other person permitted to represent the taxpayer before the Internal Revenue Service… who has a written power of attorney executed by the taxpayer may be authorized by such taxpayer to represent the taxpayer in any interview…(a)n employee of the IRS may not require a taxpayer to accompany the representative in the absence of an administrative summons issued to the taxpayer.

The taxpayer is not required to meet with the IRS if there is representation.  If the representative is not going to be at the client’s house or place of business, then there is no meeting.  The Revenue Officer is required to meet with the representative, and that would either be at the representative’s office or at the IRS. Compelling the taxpayer’s attendance can only be done with a summons, which was not present in this case. The IRS was testing the waters on this one.  

There can be circumstances where access to a personal residence or business can be beneficial.  A Revenue Officer once drove by my client’s mobile home and stated afterwards that she believed (correctly, I might add) the case would be uncollectible.  

As a general rule, cooperation and good communication is essential in dealings with the IRS, but that must be tempered with knowing when to say no.

Full post as published by IRS and the Law on October 18, 2008 (boomark / email).