Recourse In The Face Of An IRS Summons

It’s the start of a bad day for anyone to get slapped with a summons from the IRS. Often, the summoned individual is left confused and at the mercy of the IRS’s demand. The good news is that you may not be as helpless as it can feel at the time.  Indeed, as clarified by the recent case in the United States Court of Appeals for the First Circuit, Frank Gangi et al. v. U.S., “a taxpayer has a right to examine IRS agents about the reasons for issuing a summons…”[1] However, taxpayers are not entitled to examine the IRS agents and their reasons for issuing a summons simply at a whim. The justification for the examination must be premised upon “bad faith” of the IRS.[2] Specifically, a taxpayer must “plausibly” raise an inference that the summons was issued in bad faith.[3] In other words, a taxpayer must put forth “specific facts and evidence” to support the impropriety.[4]

So where does someone acquire specific facts and evidence to show the IRS acted in bad faith? The summons itself will not provide the information needed to meet the taxpayer’s burden.[5] Yet, there is more good news: the information can be acquired through other means. A taxpayer can request the IRS to disclose all of their non-confidential information regarding that taxpayer, and a taxpayer under investigation also is afforded the right to conference with the Internal Revenue Service and the Department of Justice. Thus, the facts and evidence used to raise an inference that a summons was issued in bad faith must be collected from a variety of sources to put together an effective claim.

The key to an effective defense against the IRS is knowing all the resources you have available. Don’t forget that a summons is not final, and you do have a possible recourse if a summons lands on your doorstep.

–By Tony Nasser, Esq., Barnes Law

Tony Nasser is an associate attorney with Barnes Law, licensed to practice law in California.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] http://media.ca1.uscourts.gov/pdf.opinions/15-1285U-01A.pdf

[2] Ibid.

[3] http://www.supremecourt.gov/opinions/13pdf/13-301_q9m4.pdf.

[4] Ibid.

[5] https://www.irs.gov/irm/part5/irm_05-017-006.html#d0e429