Receiving an information document request from the IRS may be the first sign of a future audit. Audit defense attorney Jin Kim helps clients comply with IDR’s, avoid summons, and resolve any consequent tax debt. To learn more about your information document request call tax attorney Jin Kim at (916) 299-9913 for a free consultation.
What’s an IDR?
An IDR is a document that’s usually included in your initial audit notice. The acronym stands for “Information Document Request”. An IDR will contain a request to bring certain documents or information, which the IRS thinks is in your possession or you’re able to access. Another name for an IDR is Form 4564. An IDR will look like this, with the list of documents requested found in the ‘Description of Documents Requested’.
The issuance of an IDR isn’t limited to the initial audit notice. An IRS agent can also issue follow-up IDRs, especially when there are lacking documents or when they haven’t seen everything the first time. Typical documents requested in the IDR are bank statements or checks. Other documents other than these may also be requested, such as electronic documents.
What if I refuse to comply with the IDR?
The important thing to remember is that under the eyes of the law, an IDR does not carry any legal force. Unlike summons (which is discussed below), the IRS can’t strong-arm you using an IDR to provide the documents requested. The IRS however can also retaliate against you if you refuse to cooperate, such as disallowing a deduction or exemption you claimed on the tax return. The rule of thumb is that if the document is likely harmless, you might as well turn it over. If you think a document can be harmful to you, or if you think the IRS is infringing on your rights by asking for this document, you can seek advice from a seasoned tax professional to discuss your options.
Can the IRS issue summons?
Summons is the next step for the IRS if they’re not satisfied by the documents you presented to them. Take note that documents may also be requested orally by the agent during your interview – he/she may ask you for some documents which are not included in the IDR. This is usual IRS practice. When the agent isn’t satisfied with the documents you’ve provided, the IRS can issue a summons.
Unlike an IDR, a summons is a legally enforceable order. This means that there will be repercussions if you fail to comply with it, such as fines or even jail time. In enforcing the summons, the IRS can even haul you into court, where the judge can order you to provide the documents requested.
Is it possible to fight an IRS summons? The answer is yes, but it will be difficult. There are only a few, rare instances where a court may strike down IRS summons, such as when the summons might be self-incriminating or when the items being requested are covered by legal privilege. Summons which are too vague or overly burdensome may also be opposed.
If the IRS has issued summons against you and you’re not sure what to do, a consultation with an audit defense lawyer is the most effective way to assess your options.
Can the IRS get information from third parties?
Yes, the IRS can and will get the information it wants from third parties. There are two ways that the IRS can choose from. The first is through informal request and the second is through the issuance of summons as discussed above. Most IRS agents prefer the informal request method and use the second as a last resort. An example of an informal request for information is when the agent calls up a supplier to verify a claimed purchase in your tax returns. This might feel like they’re treading the line with your right to privacy, but legally there’s not much to be done. In fact, an IRS agent is allowed to reveal to third parties that you’re under investigation.