Summons Enforcement Proceedings
The IRS has the authority to summon individuals, their records or any third party having custody of those records. While summonses are primarily issued in criminal investigations, they are sometimes used in audits and collection matters as well. If a summons is not complied with, the IRS can seek enforcement in United States District Court, where federal judges have the power to hold the summonsed party in contempt and impose a fine, imprisonment or both. An IRS summons should not be handled without the advice of an experienced tax litigation attorney who understands the laws, regulations and constitutional issues involved.
The Brown, PC team has represented clients during the summons process, including highly contested enforcement proceedings in federal court for over 25 years. Lawrence Brown’s decades of experience in private practice and as a trial attorney with the Department of Justice Tax Division have given him deep insight into the perspectives of the IRS and many of the federal judges across the United States during the summons process. The Brown, PC team is well positioned to make sure that our clients are well protected while summonses are handled properly and efficiently.
If you are the target of an IRS criminal investigation, audit or collection case, third party summonses issued to your banks, attorneys, accountants, clients or vendors can be devastating to your reputation. When necessary, our team will design and implement a communications strategy to protect brand equity and reputation during the summons process. The strategy will be customized to your situation and could include the crafting of messages to be delivered to key stakeholders who have been issued summonses, reaching agreement with IRS agents to provide certain records so that third parties do not have to be summonsed or a variety of other approaches.
Increasingly Aggressive Summons Use by IRS
A summons is an order to deliver to IRS agents, books, records or other information relevant to an investigation that can be enforced by a federal judge with the power to fine and imprison. It is a hardball tactic which tilts the negotiation heavily in the IRS’s favor. Traditionally, the IRS reserved its use of the administrative summons for criminal cases and to obtain necessary documents from uncooperative individuals in audits or collection cases.
Over the last few years, however, we have seen an uptick in the use of summonses in civil matters. Agents are being given refresher training on the use of summonses and are being pushed by managers to be more aggressive in using them. Summonses are being issued and referred for enforcement in federal court much earlier in the process, especially in high-dollar cases.
The stakes have never been higher for businesses and individuals served with an IRS administrative summons, and advice from a seasoned tax litigation lawyer has never been more important when responding to a summons.
Successfully Navigating the Summons Process
While an individual who fails to comply with an IRS summons may be subject to fine or imprisonment for contempt, an individual who improperly responds to a summons by turning over documents to which the IRS is not entitled faces other legal risk.
Taxpayers and third parties often have valid legal reasons for challenging a summons, and the person making the challenge has the burden to prove. The summonsed individual may have sufficient proof that the IRS failed to meet its substantive prerequisites to summons enforcement, or may have Fourth Amendment protections against an unreasonable search of the summonsed records. In addition, taxpayers and third-parties may have the right to withhold records that are subject to attorney-client privilege or work product doctrine.
Our team has an efficient and refined process for handling IRS summonses. Initial steps include reviewing the summons and all responsive documents, analyzing how the summons and documents fit into the broader IRS investigation and understanding our client’s concerns and objectives. Next we review potential strategies with our client and design and execute a strategy for handling the summons that will efficiently achieve our client’s objectives while minimizing risk and balancing any competing interests.