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You've been summoned by the IRS, now what?

In general, unless you are expecting a refund check, a letter from the IRS is an anxiety-inducing experience. Occasionally, the IRS sends out an Information Document Request ( IDR), asking for information. While you do not have a legal obligation to comply, if you fail to respond or comply with the request, the IRS can escalate the case to a formal summons.

What is a summons?

A summons is a document the IRS issues to either taxpayers or a third party that requests information about a taxpayer's tax liabilities. For instance, the IRS can send a third-party summons requesting financial documentation to a financial institution, such as a bank or brokerage firm, or directly to a taxpayer.

The summons typically provides detailed instructions on what to provide, including items such as financial records, bank statements and other relevant documents. The IRS might use the collected information to determine the accuracy of a tax return or even to prepare a return if the taxpayer failed to file one.

What happens if you fail to comply?

The IRS is a powerful entity, and when they send a request, they expect cooperation. It is possible to fight the summons, but the odds of winning a case against the IRS are slim. According to the Taxpayer Advocate Service, the IRS won 96 percent of their summons cases from June 2014-May 2015.

Those figures only represent litigated cases, and many other summons cases were likely resolved before the case escalated to litigation. Commonly cited grounds from noncompliance include attorney-client privilege or work product protection.

What should I do if I receive a summons?

If you receive an IRS summons, your first step should be to seek legal counsel experienced with tax auditing and collection issues. The tax attorneys at Goldburd McCone LLP can advise you on which information to produce to reach a speedy resolution.

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