This is a continuation of the first post on challenging a tax summons.
IRS investigators should explore all other means of obtaining the information they seek before issuing a summons. They should also consider the effect that a summons will have on the taxpayer’s willingness to cooperate if enforcement is abandoned. Here are a few more challenges that taxpayers can make to a summons receiving from the IRS:
The summons is overly broad, vague or burdensome
An IRS summons should not be a fishing expedition; it must describe the documents requested with sufficient particularity and not be excessive for purposes of the inquiry. If it is so broad, indefinite, or burdensome that the taxpayer cannot determine what it required and cannot respond adequately, it may be quashed. Note that an IRS request for a high volume of documents is generally not in itself grounds for objection.
Enforcing the summons would violate the taxpayer’s constitutional rights
In challenging an IRS summons, taxpayers may be able to evoke their constitutional rights. Privileges under the Fourth Amendment (unreasonable search) or Fifth Amendment (self-incrimination), for example, must be asserted with specificity – as a general rule they do not apply to a summons due to the self-reporting nature of the tax system. However, individuals need to be really careful about what their answers may implicate as to potential crimes, and thus criminal counsel is advisable.
The documents requested are not in the taxpayer’s possession
The taxpayer may claim that they do not possess the documents requested or that the documents do not exist. If the taxpayer or third party wishes to challenge a summons on the ground that the documents requested by the IRS are not in their possession, they must show the court that they have acted in good faith and have undertaken all reasonable efforts to comply with the IRS’ request.
Taxpayers must keep in mind that they have a duty to retain possession of all documents that are pending a judicial determination.
The summons was issued with institutional bad faith or improper purpose
In U.S. v. Clarke, 134 S.Ct. 2361 (2014), the Supreme Court ruled that a taxpayer claiming that a summons was issued by the IRS to harass them, to pressure them into settling a collateral dispute, or which has otherwise been issued in bad faith, must point to specific facts that support a plausible inference of improper motive.
Top-notch tax representation in San Francisco
A tax attorney can assist you in how to address and IRS Summons, what information should be provide the IRS, what information you may withhold, in asserting your rights, and to give you real time advice in meetings and court hearings. With over 30 years of tax law experience, the attorneys at the tax law firm of Moskowitz, LLP can enforce your rights.