Tax Procedure: A Look at Summons Enforcement Proceedings

IRS BuidlingCongress has directed the Internal Revenue Service “to make the inquiries, determinations, and assessments of all taxes . . . imposed by this title.” I.R.C. § 6201(a). To make these “inquiries, determinations, and assessments,” the IRS has the authority to issue a summons for testimony or for relevant books and records. See I.R.C. § 7602(a). If the taxpayer fails to comply, the IRS can then bring a summons enforcement proceeding in district court. See I.R.C. § 7402(b) (granting jurisdiction over summons enforcement proceedings.

A summons will be enforced if the IRS can show “that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, that the information sought is not already within the Commissioner’s possession, and that the administrative steps required by the Code have been followed.” United States v.Read More

Tax Enforcement Going Forward: Resources, Cheating, and Perceptions of Fairness

IRSAs we head into the New Year and look back on 2015, this blog reflects on one facet of the future of tax enforcement, at least in the near term. The trend in decreasing resources devoted to tax enforcement may erode widespread respect, and therefore compliance, with the tax code. One reason for this is because if people don’t believe that the tax code is fairly and uniformly enforced against tax cheats, they themselves will be more inclined to cheat.

Although this is presumably an obvious or intuitive point, the psychology behind it is perhaps more complex than simply observing that people are more inclined to cheat if they believe that they can get away with it.Read More

DOJ Tax Division and IRS Officials Describe Civil Tax Enforcement Priorities

CE1512CTF Print Brochure_1Speaking at the ABA’s Annual Criminal Tax Fraud and Tax Controversy Conference, senior officials from the Tax Division of the Department of Justice (DOJ) and the IRS Office of Chief Counsel described a variety of priorities for civil enforcement.

Consistent with prior indications that payroll taxes will be a significant area of focused criminal enforcement, Diana L. Erbsen, Deputy Assistant Attorney General for Appellate and Review, indicated that practitioners should anticipate civil actions for injunctive relief in payroll tax cases, followed by contempt proceedings to enforce those injunctions. Erbsen also indicated that the Financial Litigation Unit of the Office of Review, which focuses on collecting tax judgments, has received additional staff and is expected to be more active.… Read More