Dealing with IRS Revenue Officers
How to Deal with IRS Revenue Officers
If you owe back taxes to the IRS, your tax case may be assigned to an IRS Revenue Officer (RO). Unlike IRS revenue agents who typically examine tax returns to determine if the correct tax liability was reported, IRS revenue officer are tasked with the collection of tax liability that has already been assessed. The IRS grants revenue officers extremely broad power to collect taxes. Revenue officers have the power to issue levies and wage garnishments, seize and repossess assets owned by you, such as cars and boats, and can freeze and collect financial assets, such as stocks and bonds to satisfy your tax debt.
The beginning of the collection process will begin with a “contact” from the IRS revenue officer. A revenue officer may make a surprise visit at your place of work and even at your home. In fact, it is very common for an IRS revenue officer to visit a taxpayer at their home so they can examine first-hand the type of lifestyle enjoyed by the taxpayer, and thus giving the IRS revenue officer ideas of how to collect the back taxes you owe. An IRS revenue officer can also attempt to contact you by telephone or by mail.
After the IRS makes their initial contact with you, the IRS will undoubtedly contact you again and attempt to collect the tax debt owed by you. They will likely advise you that if you pay your debt in full, the debt collection process will be much easier and less stressful. However, the fact that an IRS revenue officer was assigned to the case to begin with means that the likelihood that the IRS will collect the back taxes in full at this juncture is slim. Therefore, the IRS may opt to request financial information from you so that they could analyze your financial situation and the extent of the collectability and determine how and will they will collect the back taxes owed to them.
Many revenue officers are nice people and there some I would consider professional friends. However, I am under no illusions when I have to deal with a revenue officer. They usually have the upper hand when negotiating a resolution with unrepresented (pro- se) taxpayer and some take advantage of it. Some will use the threat of harsh collection tactics to intimidate the taxpayer into paying more per month than they may feel comfortable doing. Others can be deceptive. I do not mean to cast revenue officers in a negative light, as many of them are hard working people who are just trying to do their job. However, there have been multiple instances of revenue officer abuse documented throughout the years and it is best to be vigilant when dealing with them. If a revenue officer has been assigned to your case, it means that you are considered a high priority collection case within the IRS (they usually do not send revenue officers after people with small balances or those who are low priority). As such, revenue officer cases can be more time consuming and much more difficult to resolve. Generally, I recommend that taxpayers seek out the help of professional representation to deal with a revenue officer matter. However, I also realize professional representation is not an option for some people. As such, I wanted to take the opportunity to share some of the strategies that I have used throughout the years.
If an IRS revenue officer wants to gather financial information from you, they will issue a Form 9297, also called a Summary of Taxpayer Contact. This form will contain a list of documents and information requested by the IRS as well as deadlines for receiving such information. You should never ignore letters sent by the IRS, especially not Form 9297. Failure to comply with the information document requests by the set deadlines could result in the issuance of a summons for that information as well as the immediate issuance of wage garnishments and bank levies. If you are unable to comply with the requests of the IRS by the deadlines they have set, your tax attorney should contact the IRS revenue officer and attempt to get an extension or to discuss the merits of the request.
A Form 9297 sent by the IRS will likely contain a Form 433-A for individuals or Form 433-B for businesses. These forms are intended to identify your income and assets and to summarize your financial health. It is CRITICAL that these forms are completed correctly and by a tax attorney or other tax professional. If filled out correctly, these forms can be very powerful tools for negotiating a settlement of your back taxes with the revenue officer. Your financial situation may show that you are a good candidate for a payment plan (installment agreement) or for an offer in compromise (OIC) with the IRS. On the other hand, if these forms are filled out incorrectly, the form becomes a powerful tool for the IRS and they will use the information contained in the form to aggressively collect the tax that you may owe to them. If you have received a Form 9297 from the IRS, you should contact a tax debt settlement lawyer at Dallo Law Group to assist with your tax case.
If you owe payroll back taxes to the IRS, your dealings with an IRS revenue officer may be more involved and complicated. The IRS revenue officer has the power, under code section 6672 of the Internal Revenue Code, to assess a trust fund recovery penalty against certain taxpayers. Before the IRS revenue officer can assess the trust fund recovery penalty, the IRS revenue officer must conduct a trust fund recovery interview (Form 4180) to determine whether the taxpayer was responsible for paying payroll taxes on behalf of the company and whether the taxpayer willfully failed to pay over payroll taxes to the IRS. The trust fund interview process is a highly sensitive and significant tax matter and you should consult with a competent tax attorney to assist you in this process.
In most cases, the collection process with an IRS revenue officer is lengthy and you or your tax attorney will have frequent contact with the officer while a plan to pay the taxes owed is negotiated by both parties. If at any time you feel that the IRS revenue officer is overstepping his bounds in this process and you feel that your rights are being violated, your tax attorney should make contact with the taxpayer advocate (Form 911) to intervene in this process.
Feel free to contact us for more information on dealing with IRS revenue officers.