Is Compliance with an IRS Summons (really and truly) Voluntary? - The Most Important Thing Ever Written Part (3)

David ("The Great") Selig

Summoned parties have asserted that they are not required to respond to or comply with an administrative summons issued by the IRS. Proponents of this position argue that a summons thus can be ignored. The Second Circuit’s opinion in Schulz v. IRS, 413 F.3d 297 (2d Cir. 2005) (“Schulz II”), discussed below, is often inappropriately cited to support this proposition.

The Law: A summons is an administrative device with which the IRS can summon persons to appear, testify, and produce documents. The IRS is statutorily authorized to inquire about any person who may be liable to pay any internal revenue tax, and to summon a witness to testify or to produce books, papers, records, or other data that may be relevant or material to an investigation. I.R.C. § 7602; United States v. Arthur Young & Co., 465 U.S. 805, 816 (1984); United States v. Powell, 379 U.S. 48 (1964). Sections 7402(b) and 7604(a) of the Internal Revenue Code grant jurisdiction to district courts to enforce a summons, and section 7604(b) governs the general enforcement of summonses by the IRS.

Section 7604(b) allows courts to issue attachments, consistent with the law of contempt, to ensure attendance at an enforcement hearing "[i]f the taxpayer has contumaciously refused to comply with the administrative summons and the [IRS] fears he may flee the jurisdiction." Powell, 379 U.S. at 58 n.18; see also Reisman v. Caplin, 375 U.S. 440, 448-49 (1964) (noting that section 7604(b) actions are in the nature of contempt proceedings against persons who “wholly made default or contumaciously refused to comply” with an administrative summons issued by the IRS). Under section 7604(b), the courts may also impose contempt sanctions for disobedience of an IRS summons.

Failure to comply with an IRS administrative summons also could subject the non-complying individual to criminal penalties, including fines and imprisonment. I.R.C. § 7210. While the Second Circuit held in Schulz II that, for due process reasons, the government must first seek judicial review and enforcement of the underlying summons and to provide an intervening opportunity to comply with a court order of enforcement before seeking sanctions for noncompliance, the court’s opinion did not foreclose the availability of prosecution under section 7210.

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Proven Results  We successfully resolve: Tax Crimes; Tax Evasion; Failure to File a Tax Return and Criminal Non-Filing; Filing False Tax Returns; Installment Agreements; Partial Payment Agreements; IRS Audits; Sales Tax Audits; Sales Tax Controversies; Wage Garnishments; Bank Levies; Seizure of Real Property; Innocent Spouse Relief; Trust Fund Recovery Penalty; Payroll Taxes; Workers Compensation Insurance Audits ("Workers Comp"); Statute of Limitations; Offer in Compromise ("OIC"); Administrative Appeals; Collection Due Process Hearings ("CDP") and most other tax matters. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435

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North Carolina Man Sentenced for Tax Evasion and Possession of an Unregistered Firearm (he should have hired SELIG & Associates)

On December 16, 2016, in Charlotte, North Carolina, Reuben T. DeHaan, of Kings Mountain, was sentenced to 24 months in prison for tax evasion and possession of an unregistered firearm. DeHaan owned a holistic medicine business, which he operated out of his residence under the names Health Care Ministries International Inc. and Get Well Stay Well.  DeHaan admitted that, from 2008 through 2014, he earned more than $2.7 million in gross receipts, but failed to file income tax returns for those years and evaded the payment of approximately $678,000 in income tax. He did this with the help of Richard H. Campbell Jr. and others, by setting up straw companies and opening bank accounts in the name of the straw companies to hide his income and assets from the Internal Revenue Service. DeHaan also claimed he was exempt from the payment of taxes because he was an ordained “medicine man” whose earnings were exempt from taxation. In addition, DeHaan also admitted to the possession of unlicensed firearms.

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For a Personal and Legally Privileged Consultation in our New York City Offices call (212) 974-3435 Payroll Taxes, Trust Fund Recovery Cases, Income and Sales Tax Controversies. We negotiate Payment Plans, compromise Tax Debts, and resolve all Civil and Criminal tax issues, including Innocent Spouse Relief and Separation of Liability. Selig & Associates provides the most aggressive Tax Representation allowed by law. 

Chiropractor Sentenced For Tax Evasion (he should have hired SELIG & Associates)

On April 19, 2017, in Minneapolis, Minnesota, Donald Gibson was sentenced to 33 months in prison for tax evasion and for presenting a fake financial instrument to the U.S. Department of Treasury. Gibson failed to file his 2004 through 2014 individual income tax returns and attempted to evade his income tax liabilities for these years by diverting money to a warehouse bank called MYICIS, cashing over $800,000 in business checks at a check-cashing facility and submitting fake money orders and bogus financial instruments to the IRS. Gibson also formed Sovereign Christian Mission (SCM), a purported religious organization, as a way to further hide his chiropractic income and pay for his personal expenses. Gibson used SCM to pay for his groceries, entertainment, dinners, and car repairs. While the IRS was auditing his tax returns and later during the criminal investigation, Gibson presented a fake financial instrument purporting to be worth $300 million to the IRS and claimed that it paid off his income tax liabilities.

Emergency, Evening and Early Morning Appointments Available 

For a Personal and Legally Privileged Consultation in our New York City Offices call (212) 974-3435 Payroll Taxes, Trust Fund Recovery Cases, Income and Sales Tax Controversies. We negotiate Payment Plans, compromise Tax Debts, and resolve all Civil and Criminal tax issues, including Innocent Spouse Relief and Separation of Liability. Selig & Associates provides the most aggressive Tax Representation allowed by law. 

Three Honest IRS Whistleblowers Testify. “Abuse, Impropriety and Violence” (torn from the pages of recent History)

"On This Day in History"

Three IRS Agents Testified Behind Translucent Screens and Spoke  Through Voice Alteration Machinery. 

Today, Are These Same Three IRS "Whistle-Blowers" are Afraid for Their Lives (and for the Lives of Their Loved-Ones)?

Whistle-Blower Number (1) An IRS Agent [anonymously] testified that over his long career in collections he had seen senior IRS staff and executives "violate or ignore Internal Revenue Manual procedures and Treasury regulations simply because they wanted to punish a taxpayer. I have seen more violations of IRS procedures and policies than I can count. The most appalling aspect of the foregoing examples is that in most every instance, IRS management supported the erroneous actions of the Revenue Officer”.

Whistle-Blower Number (2) A second [anonymous] IRS Agent testified that, "over my 20 years of service, I have become painfully aware of the ability of the IRS to retaliate against employees who dare to speak out. Many of the witnesses you will have before you in this heating [sic] could be retaliated against for their testimony before this Committee. At times, I have been assigned an employee case and been told that management does not like that employee, and I have been told that I need to find something that they can use to terminate their employment. In the IRS, retaliation is swift and severe. I hope you will respect the risk that these witnesses took to appear before you, and protect them from any act of revenge by IRS management”.

Whistle-Blower Number (3) A third [anonymous] IRS Agent testified that he had seen, "tax data being accessed by IRS employees to check on prospective boyfriends; tax data being accessed by IRS employees to check ex-husbands for increasing income in order to receive increased child support payments; tax data being accessed on people with whom IRS employees were having some kind of personal disagreement; tax data being accessed on individuals who are perceived as critical of the IRS, such as tax protestors or, as in one case, a person who had simply written a Letter to the Editor, and tax data being accessed on relatives and acquaintances of the subject taxpayer, such as cases where the taxpayer is suspected of using friends and relatives to hide income or assets; tax data being accessed on potential witnesses in government tax cases, and tax data being accessed on jurors sitting on government tax cases".

Are you in Trouble with the IRS?

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Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability. Call today for a FREE face to face Consultation (212) 974-3435.