An IG audit has found only a few cases of potential violations by IRS employees of a prohibition against contacting taxpayers directly when they have designated someone to represent them in tax matters, although adding that agency policy is unclear regarding contacts with entities claim they are tax-exempt.
The IRS has a number of policies and procedures under 1988 and 2015 laws to help ensure that taxpayers are afforded the right to designate an authorized representative to act on their behalf in a variety of tax matters, as well as a process to handle the review and disposition of taxpayer allegations of direct contact violations, the report said. Under those laws, IRS employees generally are required to stop an interview whenever a taxpayer requests to consult with a representative and to obtain their immediate supervisor’s approval to contact the taxpayer instead of the representative if the representative unreasonably delays the completion of an examination, collection, or investigation.
Determining whether there are violations of those protections, however, “is complicated by the fact that the IRS cannot proactively identify IRS employee violations;” instead, the agency examines such issues only when it receives a complaint of a violation.
In a review of 96 such complaints over a one-year period, the IG found three instances in which revenue officers contacted taxpayers directly even though there was an authorized representative on file, which “appeared to have violated” the Internal Revenue Code. In addition, it found that in six cases collection employees “disclosed taxpayer information to individuals not authorized to receive that information.”
Regarding businesses the report said that IRS policy does not provide clear guidance on who exempt organizations determinations specialists should contact when a valid power of attorney is on file, and allows the specialist to contact others.
It said that management agreed with its recommendations, including to reemphasize the importance of revenue officers following policies on a taxpayer’s right to representation.