Friday, August 19, 2016

IRS overreach checked!

Interesting facts about the IRS and its ability to interact with taxpayers-
 The IRS’s petition to enforce a summons was denied because the IRS issued the summons to an attorney in his personal capacity and he lawfully invoked his right against self-incrimination. Moreover, the foregone-conclusion exception did not apply because the attorney correctly asserted that the only way for the IRS to know that the underlying documents existed was if they were authenticated through his act of production.
Further, the government’s argument that enforcement of the summons would not violate judicial process because the summons was directed to the attorney as his S corporation’s records custodian was rejected. The IRS’s investigation was focused on the attorney’s individual personal income tax liability. In addition, the summons was directed on its fact to the attorney and was served to his wife at his personal residence. Therefore, the record did not support the government’s contention that the IRS directed the summons to the S corporation. Finally, the government presented no legal authority for the proposition that a single summons, issued to an individual who responded in his personal capacity, can somehow be interpreted as a second summons issued to a corporate entity for unspecified corporate records.  Thanks to CCH for the information in this article.