The important thing to remember when seeing the dreaded envelope with the Internal Revenue Service insignia in the corner is not to panic, and certainly don’t ignore the IRS Summons. Although you may choose to ignore other unwanted mail or solicitations, it is essential that you open this particular correspondence. Ignoring it could cost you a substantial amount of money and stress.
When asking for information, the IRS will typically send a memo in the form of an Information Document Request, Form 4564. Known as an “IDR,” this document does not legally obligate you to respond. Responding is a good idea though, as ignoring it will only cause the issue to become increasingly more difficult to resolve.
A summons is another form of communication from the IRS. With a summons, the IRS may be requesting books, records or other information. This particular form, with its promise that the courts will be enforcing it, is more potent than the Information Document Request. When you receive such a summons, you can take several actions: comply with the request, refuse, ignore the communication, or go to court. If you elect to go to court, it would be in an attempt to prove that you have legal reasons, with legitimacy behind them, not to hand over the information the IRS is requesting.
According to IRS tax attorneys, when the IRS sends a summons to a taxpayer, it is not “messing around.” The IRS is sending a stern message in the mailing of such a document, they say. The promise that the IRS is ready to take the matter to the courts should be, as the IRS hopes, enough to move the taxpayer to action.
Receiving a summons from the IRS is not uncommon, and the practice continues to grow in frequency. If you don’t comply, the standards are high in proving you were justified in refusing the summons. Court fights are also becoming more common, as are the rulings in favor of the IRS. According to the IRS watchdog, the Taxpayer Advocate Service, the IRS won over 90% of such cases.
When receiving a summons, it is a good idea to seek legal advice. A competent tax attorney can advise you of your rights, making clear what it is that you should do in the face of such a request from the IRS. The IRS is experienced in dealing with summons issues. You should have representation that is just as experienced.
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