Letter To Irs Commissioner Re: Irs Abuse Of Taxpayer Right To Counsel

Pappas & Associates, P.A. KOGER CENTER 930 WOODCOCK ROAD SUITE 227 ORLANDO, FL 32803 TELEPHONE 407 648-2555 FACSIMILE 407 264-6580

LAKEPOINTE II. 3111 W. DR. MARTIN LUTHER KING BLVD. SUITE 100 TAMPA, FL 33607 TELEPHONE 813 282-1009 EMAIL: [email protected]

April 10, 2009 Doug Shulman, Esquire Commissioner of Internal Revenue 10th St & Pennsylvania Ave, NW Washington, DC 20004 RE: IRS Abuse of Taxpayer Right to Counsel Dear Commissioner Shulman: I am a CPA and attorney and have been practicing tax law for over 25 years. This is the first time I have found it necessary to contact the Commissioner about a problem I have had with an IRS employee. In only a handful of cases have I found it necessary to file a TIGTA complaint against a Revenue Agent. Each of those cases involved, among other things, an IRS agent who violated the taxpayer’s right to representation. Every one of these TIGTA complaints were ignored and I was never contacted by an investigator to discuss the circumstances of the alleged violation nor am I aware that the IRS officials who were the subjects of the complaint received so much as a private reprimand. I stopped filing TIGTA complaints not because I no longer experienced IRS misconduct, but because they were futile. In any event, please be assured that I do not take the filing of a complaint against an IRS official lightly and I would not be lodging one now if I did not believe the facts, circumstances and the interests of justice warranted it. Summary of the Facts In the past month I have had two IRS revenue agents contact my clients directly even though the IRS had on file powers of attorney authorizing me to represent them. In one especially disturbing case, a Revenue Agent, Michael X, Badge No. 59-XXXXX visited my client’s place of business and told her that she did not need a lawyer, should not have hired a lawyer and should have paid the IRS instead of wasting her money on a lawyer. He then proceeded, over her repeated objections, to ask her detailed questions about her finances and her ability to pay the IRS.

Mr. Doug Shulman Commissioner, Internal Revenue April 9, 2009 See Exhibit “A” for the taxpayer’s sworn affidavit. What is particularly outrageous is that all of this happened after the following had occurred: a. We had sent to ACS a fully supported and documented request for an installment agreement; b. The IRS had reassigned the case to the Revenue Officer; and c. We had spoken with the Revenue Officer and had responded promptly and thoroughly his calls and requests for additional information. The actions of Mr. X provide a textbook example of an IRS official’s violation of a statutorily granted taxpayer right and should it should not be cavalierly set aside. These cases do not happen in a vacuum, however. The IRS Has a Culture of Disrespect for IRS Representatives As a fellow lawyer, I am sure you can appreciate how disturbing this is and why so many IRS representatives believe that the IRS pays only lip-service to a taxpayer’s right to representation. The Michael X case is, I believe, merely a symptom of a bureaucratic culture that disrespects and disregards a taxpayer’s unequivocal right to representation in matters before the IRS. For every one of these obvious violations of a taxpayer’s right to counsel there are hundreds of more subtle abuses. Here is a non-exhaustive list of acts in which IRS Revenue Agents regularly engage that either eliminate or diminish a taxpayer’s right to counsel: 1. Make Unreasonable Demands and Set Unreasonable Deadlines: Revenue Agents often impose unreasonable and unfair time deadlines for return telephone calls from IRS representatives and then, when those strict deadlines are not met, use that fact as an excuse to contact the taxpayer directly and tell them their representative isn’t doing his or her job. 2. Disparage IRS Representatives as a Class: Revenue Agents frequently discourage unrepresented taxpayers from hiring counsel at the same time they hand those taxpayers the IRS Declaration of Rights the first listed right of which is the taxpayer’s right to representation. 3. Decline or Return POAs for Hyper-technical reasons: IRS personnel regularly decline or return Powers of Attorney for petty, technical reasons. There is great inconsistency among IRS Revenue Agents as to the proper completion of Form 2848. 4. Prepare Complex Forms “on behalf” of Taxpayers: Many Revenue Agents will hastily prepare financial statements and conduct 4180 interviews without telling the taxpayer that these documents are to be signed under penalties of perjury. The Agent should make this very clear to the taxpayer and remind him or her of the taxpayer’s right to counsel. The Revenue Agent cannot

Mr. Doug Shulman Commissioner, Internal Revenue April 9, 2009 and should not give any counsel, or make any recommendation to the taxpayer because he or she has a clear conflict of interest. 5. Engage in Unlicensed Practice of Law: When dealing with unrepresented taxpayers, Revenue Agents regularly take it upon themselves to give taxpayers legal advice. There are two obvious problems here: A. Unless the Revenue Agent is also a licensed lawyer, this constitutes the unlicensed practice of law and is illegal. B. Even if the Revenue Agent is authorized to practice law, he or she has a clear conflict of interest and should disclose that fact to the taxpayer and (at least in accordance with the Rules Regulating the Florida Bar) obtain a written waiver of the conflict. Sanctions are Available for Abuse by IRS Employees of Taxpayer Rights If a taxpayer’s right to representation is to mean anything, these kinds of abuses, both the blunt and the subtle ones, must be stopped. The IRS has the mechanism to do it. Congress passed a law in 1998 that requires the IRS to swiftly and severely deal with such abuses. The IRS’s anti-retaliation policy (Section 1203 (b)(6) of RRA ’98) states: Violations of the Internal Revenue Code of 1986, Department of Treasury regulations, or policies of the Internal Revenue Service (including the Internal Revenue Manual) for the purpose of retaliating against, or harassing, a taxpayer, taxpayer representative, or other employee of the Internal Revenue Service [is an act or omission requiring termination]. I have sent a copy of this letter to Ms. Nina Olson, National Taxpayer Advocate, Mr. Charles Rangel, Chairman of the House Ways and Means Committee, and Senator Bill Nelson of Florida. One of the most frustrating things about these abuses is that in at least 80% of the cases, an IRS representative facilitates collection of an outstanding IRS debt. For example, we advise hundreds of taxpayers a month to file their delinquent tax returns and offer some kind of payment arrangement with the federal government. We are clearly not the enemy. Why is it then that the IRS continues to treat us as if we were? Request for Imposition of Sanctions against Revenue Officer Michael X While I do not like to see anyone lose his or her job, especially in a difficult economy like the one we have now, I do not see the point of having an Anti-Retaliation policy that is not enforced.

Mr. Doug Shulman Commissioner, Internal Revenue April 9, 2009 Please keep in mind that Mr. X did not merely speak with my client about her case, he expressly, deliberately and repeatedly tried to persuade her to fire her attorney and deal directly with him. I cannot imagine a clearer violation of the Anti-Retaliation provisions of RRA ’98. The law provides for termination in these cases and my client and I seek only what the law demands. Thank you in advance for your attention to this critically important matter. If you have any questions or require further information, including an in-person meeting at your office, please have one of your assistants contact me. Respectfully yours, PETER C. PAPPAS, ESQ. PCP/mdd Enclosures cc: Ms. Loretta Ahrens Ms. Nina Olson, National Taxpayer Advocate Congressman Charles Rangel, Chairman House Ways & Means Committee United States’ Senator Bill Nelson, Florida Joy Jackson, Internal Revenue Service, Group Manager