IRS Administrative Summons

When a person hears the word “summons,” he typically thinks of it in the context of a court of law.  A court or judicial summons is when a court of law issues a document requiring that a person appear before the court.  A court typically issues a judicial summons to inform a person that he has been sued.

However, other government agencies may also issue a summons.  A summons issued by a government agency other than a court of law is known as an administrative summons.

The tax laws defined in the Internal Revenue Code—specifically in Section 7602—grant the Internal Revenue Service (IRS) the authority to issue an administrative summons.  An administrative summons issued by the IRS may also be known as an IRS summons.

The IRS usually issues an administrative summons as part of a tax investigation for one of two reasons:

–          To a taxpayer about his individual tax return

–          To an individual who has responsibility for calculating or maintaining the financial records of a business.

When the IRS issues an administrative summons for either of the above reasons, the purpose of the summons is so the IRS can:

–          Hear direct testimony from the individual who is the subject of the investigation

–          Review any records that will provide information related to the investigation

–          Hear direct testimony from a third party who may have information relevant to the investigation

A third party may include, for example, a bookkeeper or accountant who has first-hand knowledge about an individual’s or business’s tax records.

If you receive an administrative summons from the IRS, you should not simply ignore it.  If you do not respond to an IRS administrative summons, the IRS can seek to have the summons enforced by a court of law.  The law allows for a person who does not respond to an IRS administrative summons to be subject to a jail term of up to one year and a fine.

Although it is unwise to ignore to an IRS administrative summons, it does not mean you must provide what the IRS is requesting.  A person who receives an IRS administrative summons may respond in any of the following manners:

–          Provide the information requested.  The person may choose to simply provide the requested information or testimony to the IRS.

–          Claim attorney-client privilege.  If the documentation requested by the IRS had already been given to the person’s attorney at the time the summons was issued, the person can claim attorney-client privilege in response to the summons, thereby not provide the documentation to the IRS.

–          Claim right to avoid self-incrimination.  If the testimony or information the IRS is requesting would demonstrate the person is guilty of a crime, the person can claim the right to avoid self-incrimination and therefore not testify or provide the requested information.

–          Contest the summons.  If the person has reason to believe and can demonstrate that the information or testimony requested does not relate to a legitimate investigation by the IRS, the person can file a motion indicating the summons is invalid and the person should not have to comply with it.

Regardless of the response given by the person, the person summoned must actually appear at the date and time as noted in the summons.  That is, the person cannot simply send an advocate such as an attorney to speak on their behalf; rather, the person must appear himself.

If you have received an administrative summons from the IRS, you should speak with a tax attorney to understand the reason for the summons and the appropriate response to the summons, given your specific circumstances.

by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.