Unusual telephone call from IRS

[Kram BergGold]

I recieved a call from IRS. The agent is coming to my office to ask me two questions about an ex client's 2005 and 2006 tax returns that I prepared. To the best of my knowledge the taxpayer is not aware that the IRS agent is coming to see me. My first thought is the IRS was checking up on me. After thinking about it it makes more sense that this taxpayer is in some kind of trouble and they are checking up on something about the taxpayer. Anyone out there have this experience?

[Roland Slugg]

You can not give the IRS (or anyone else) any information about a client or former client without either: (1) that client's express permission, or (2) a legally enforceable summons.

I suggest you call the agent back and ask him to tell you what his questions are. Tell him you will then call your client and seek permission to answer his questions. If your client gives his permission, get it in writing, and if a MFJ return, make sure H and W both sign the permission letter.

When you talk with the IRS agent, ask him if he is a Revenue Agent or a Special Agent. If the latter, it means he is in the CID department investigating the possibility of fraud, in which case you should advise your client to see a lawyer.

[Kram BergGold]

Response

The IRS employee made it clear the questions have nothing to do with the facts of the return. The questions are about how I prepared the return. Thanks for the info about agent status. I will follow through on that.

[ChEAr$]

The IRS employee made it clear the questions have nothing to do with the facts of the return. The questions are about how I prepared the return. Thanks for the info about agent status. I will follow through on that.

This questions sounds familiar; now I wonder why? (grin

[erchess]

You still need

your client's written permission or a legally enforceable summons or you can't cooperate with the agent. You may also need an attorney.

[KathMorgan]

Cooperation and Confidentiality

Sounds like you may be the one getting audited. I would cooperate as much as possible without going into any specifics. Have them come to the appointment but advise them that without a summons or written permission from the clients (which THEY should have to get for you) you can not comment on anything to do with the clients return.
Now, if the agent wants to slap a transcript down in front of you and ask you hypothetical questions about how you would possibly handle a situation, I wouldn't have a problem answering that in general with all the qualifiers that you would treat each situation separately and would need a thorough interview with the client before answering specific questions.
If at anytime you feel bullied, uncomfortable, or feel that you are under suspicion I would terminate the interview and seek legal counsel immediately.
This way you are "cooperating" with the nice agent and you are protecting your client and yourself. I would also tell them right up front that you make it a habit to record ALL interviews with agents of any taxing authority and slap my tape recorder down right on the desk, start it with you name the time and date and location and the agents name and the reason for the interview. You have those rights! use them and don't let anyone bully you into compromising your integrity!
Good luck and let us know how it goes.

[geekgirldany]

I would find out like suggested what type of agent they are. The only time I have heard of this happening twice. Both times the agents had summons. One was investigating a local political figure and the other was trying to find a tax dodger. Neither happened to me but I was present for one of them. The agents showed their badges and the summons.

Know your rights and be able to produce documentation showing them.

[WhiteOleander]

Well, the problem is, even with a summons, you still have to allow the t/p to know about the summons. They may get an attorney and squash the summons. If it's only about the preparer, then you need an attorney to review it and be sure it is in order. A summons does not give carte blanche.

[thomtax]

Please correct me if I am wrong, but are you required to have copies of returns that are that old? One of these is seven years old.

LT

[Gary2]

I can't think of any requirements for the preparer to have documents going that far back, assuming they were timely filed. But in these days of computer records, people often do have them, and you can't delete them once informed of an investigation.

One thing that does concern me is that I thought with a criminal investigation, you weren't allowed to tell the suspect of the summons without permission. That's probably not the case here, since I doubt they'd even reveal the name of a suspect in such cases over the phone.

[JohnH]

You referred to them as an ex-client. Was the 2006 return the last one you prepared for them? If the client was self-employed, in some way receiving non-W2 income, or working in a field which was hammered by the economy in 2008 or afterward, that might provide a clue about why IRS wants to speak with you.

[ChEAr$]

In fact you are not even required to keep copies of returns. You may do that for the three year required period of course, or use the default of a list of returns prepared by name and serial number.

And btw, there was no mention of a summons by the OP. Even if the IRS type is CID, he may not have a summons at hand.

[taxea]

1. where does it say that you cannot answer IRS questions without permission of the client? The IRS cannot discuss a return or client info when you are asking the questions but I don't think (correct me with a cite if I'm wrong) confidentiality applies when the IRS is the instigator of the questions.

[erchess]

We all know that

our clients enjoy a limited privilege of confidentiality with us. I did hear from a speaker at a conference this past May that the IRS can still make us answer questions about return prep and that only audit defense and tax planning are protected from this disclosure. However it seems prudent in such a situation to make sure that the IRS jumps through every hoop you can make it jump through and at the very least consult a tax lawyer before the meeting and maybe even pay the person to attend the meeting. I mean would you go to a tax adviser who the IRS described as cooperative in talking to a reporter?

[taxea]

" I mean would you go to a tax adviser who the IRS described as cooperative in talking to a reporter?"

Sorry, I don't understand who you mean by a reporter. I will and do protect my clients as much as I legally can but I wouldn't want to get a reputation with the IRS as being uncooperative to the point of them thinking I am using delay tactics. Do this and one may lose their cooperation when needed.