Everyone who earns money and accepts funds from someone in the U.S. is susceptible to Internal Revenue Service (IRS) contact. Some can go through life never hearing from the IRS; however, it helps to know what is going on, if such a call happens.
IRS agents can make contact in many ways, operating without restriction. However, the type of communication indicates the issue's level of seriousness. Contact methods include phone calls, letters, summons and subpoenas and personal visits to either the home or business.
The type of agent matters. If you receive a basic office contact, it is likely related to a desk audit, the easiest and simplest of reviews. If it is an agent at the IRS office, it is likely an attempt to clarify a tax return, so an explanation is sought. If it is a personal appearance from a revenue officer, then the IRS is attempting to collect taxes owed. If it is a visit from a revenue agent, it is often an attempt to collect taxes on a business. It can also be due to a complex tax situation, since revenue agents are skilled at applying the tax code, federal laws and accounting rules.
Usually an IRS notice precedes personal contact. Thus, if an agent visits, the issue has already transcended a simple fix. More than likely, the IRS has decided the taxpayer already received enough time to pay, so collection procedures have begun. Such taxpayers are generally aware why the IRS is calling, since they already received notices.
Agents sending audit-specific notices expect prompt responses to their specific questions or requests for documentation, and very clear instructions will appear. If a desk audit, you can mail a response. If it is conducted in person, you must make arrangements to visit an IRS office. It is wise to bring your tax preparer and/or legal representative.
An IRS agent can also make contact as part of an investigation into another business or individual. This is a common approach to locate debtors and any information about their employment, assets, business and/or movements. Often the IRS will first gather this information before initiating collection procedures.
If you choose to utilize a professional tax preparer for your tax filings, an IRS agent can contact you through that preparer. Both you and the preparer are subject to review on the filing you both signed; thus, an agent can require both of you to come in for questioning.
The IRS agent appearing at your home or business is there to collect assets for balance due payments, not to negotiate. Generally, visits occur when the debt exceeds $25,000 in outstanding taxes and/or penalties. If the agent seeks to seize assets, he will bring professional movers and law enforcement, if necessary.