Taxation & Estate Planning

Face to face with IRS agents: Who?s who?

By howardlevy

If you find yourself in an IRS pickle, there are three IRS employees you are most likely to come face to face with.  Those are Revenue Officers, Revenue Agents and Special Agents.  Here is what to expect from each:

An IRS Revenue Officer is in collection enforcement. Often, the first contact you will receive from a Revenue Officer is an unannounced visit to your home or office.  Revenue Officer’s collect taxes and pursue nonfilers.   Revenue Officers work in your town.  They want financial information to determine the best way to collect the taxes (or not collect them, if it would create a hardship).  Revenue Officers carry badges and can take your wages, bank accounts and other personal and real property if there is a lack of cooperation.  The goal is case closure representing your ability to repay.

An IRS Revenue Agent audits tax returns for the IRS. Like Revenue Officers, Revenue Agents may want to meet you at your business, or ask that you come to an IRS office.  You will get notified of the audit by mail – no unannounced surprise visits.  Common audit triggers include Schedule C businesses and expense deductions not in reality with your stated income (like claiming $10,000 in charitable contributions on $40,000 in income). Audits are usually about finding money that you should owe on the return, but it can turn criminal if the Revenue Agent finds significant unreported income or fraudulent deductions.

IRS Special Agents are criminal investigators. In addition to criminal referrals from Revenue Agents (auditors), Special Agents can receive cases from Revenue Officers (collectors).  Examples of Revenue Officer collection referrals include lying about your finances and assets, or intentionally failing to pay employment taxes.  Special Agent priorities also include non-filers, concealing income off-shore, and tax returns prepared to obtain fraudulent refunds. If you are under criminal investigation you most likely will be the last to know, with Special Agents making an unannounced visit to question you.  They often know the answers to their questions.  Stop, state you wish to contact an attorney, and respectfully decline to answer.

Of course, you can come in contact with an IRS employee in the strangest of places and not know it.  When I worked for the IRS as a trial attorney, I was at dinner at Benihana, and at my table were two businessmen talking very loudly about how they cheated on their taxes.  You never know.

Full post as published by IRS and the Law on September 18, 2009 (boomark / email).