Ever wonder what you should do when the tax man comes knocking on the door of your business? Okay, what to do after cleaning up the floor? HFM’s tax attorneys give you five great tips:
1. Ask to see the individual’s credentials. You will learn a great deal about the nature of the visit based on who is standing before you. A Revenue Officer will most likely be there to collect unpaid income or payroll taxes. A Revenue Agent will be there to audit you or your business. A Special Agent will be there to investigate you or your business for criminal activity. Special Agents are required to identify themselves and notify you if you are under criminal investigation.
2. Tell the agent as little as possible, but do not lie. The agent will likely want to engage you in discussion as soon as possible. Despite what the agent suggests, he or she is almost never going to go away just because you give them a little information.
3. Tell the agent you wish to consult a lawyer…and do it!!! As soon as you tell an agent that you wish to first consult with a representative, he or she should suspend the interview. This will enable you and your representative to determine the correct strategy for dealing with the IRS. Also, your tax preparer or an experienced tax lawyer will be better able to explain your position to the IRS.
4. Do not let the agent into nonpublic areas. An IRS agent has the right to come into public spaces such as your business’s waiting room or a public dining room. The agent may not come into private areas such as your home, business office, warehouse, kitchen, or factory without your permission, a warrant, or a court order. Don’t invite them in.
5. Do not give the agent business records or other documents. The agent may ask to see your business records or other documents, even if you’ve told him or her that you wish to terminate the interview. Repeat your desire to get professional representation, and decline to give them any paperwork.