IRS Employees Disciplined for Bypassing Taxpayers’ Representatives

Between October 2011 and September 2012, the Internal Revenue Service investigated 13 complaints of IRS personnel who directly contacted taxpayers instead of going through their designated representatives, but IRS managers disciplined or counseled only two of the employees because of their actions.

The IRS has a number of policies and procedures in place to ensure that taxpayers are given the right to designate a qualified representative, such as a tax practitioner, to act on their behalf in dealing with IRS personnel in a variety of tax matters. IRS personnel are required to stop an interview if the taxpayer asks to consult with a representative, and the IRS may not bypass the representative without a supervisor’s approval.

A report issued Wednesday by the Treasury Inspector General for Tax Administration reviewing the restrictions on directly contacting taxpayers found that between October 2011 and September 2012, TIGTA’s Office of Investigations closed 13 direct contact complaints involving IRS personnel. Of those 13 complaints, two employees were disciplined or counseled for their actions by IRS management officials, the report noted.

Each year, TIGTA focuses on an office or function of the IRS that interacts with taxpayers and their representatives on a routine basis. For this review, TIGTA analyzed how well the IRS’s Office of Appeals has ensured that its personnel are appropriately including taxpayers’ representatives in its activities. A statistical sample of 96 of 72,239 cases closed by Appeals showed that Appeals personnel did not always involve representatives appropriately in some key actions.

In 11 of the 96 sampled cases, Appeals personnel deviated from official procedures by attempting to contact the taxpayer directly by telephone or not ensuring that copies of taxpayer correspondence were sent to the taxpayer’s authorized representative. In addition, no documentation was found in managerial reviews indicating that checks were made to ensure that Appeals personnel were involving representatives in all case actions and providing representatives copies of all original correspondence sent to the taxpayers.

TIGTA recommended that the chief of the IRS Appeals unit provide additional guidance to first-line managers and Appeals personnel that will reinforce the importance of ensuring that taxpayer representatives are involved in all case activities. This will help ensure that the procedures designed to afford taxpayers their right to appropriate and effective representation are followed and properly documented during the appeals process.

The IRS agreed with TIGTA’s recommendation and plans to update the Internal Revenue Manual to clarify the front-line managers’ responsibilities for ensuring that procedures regarding the direct contact provisions of the Tax Code are followed and reinforce the importance of ensuring that representatives are involved in all case activities.

“We appreciate your acknowledgement that a review of your statistical sample of cases closed by Appeals between October 1, 2011, and September 30, 2012, showed that Appeals personnel are generally involving the designated representatives  in case activities,” wrote Kirsten B. Wielobob, deputy chief of the Appeals unit, in response to the report. “We value your recommendation to help us improve our processes.  We have worked and will continue to protect taxpayer rights and earn their confidence in our ability to resolve tax disputes fairly and without litigation.”

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