December 10, 2010 - Phil Hodgen

The sledgehammer technique from the IRS to close amnesty cases

The IRS is pulling out the sledge hammer.

For cases where the IRS is trying to get documents from the taxpayer — unsuccessfully, in the IRS’s eyes — they have a simple procedure:

  • Send you an IDR (“Information Document Request” for those of you not subjected to this process).
  • You don’t provide the documents.
  • They look at your three-pager letter that you gave to Criminal Investigations when you entered the amnesty program.  In that letter you checked a box for the range in which aggregate balance for unreported accounts fell.
  • They take the top end of the range.
  • They send you a Closing Agreement assessing a penalty of 20% of the top end of the range.

I’m not sure about the effect of them merely sending out a Closing Agreement.  We shall see, I guess.

Keep working away.  Me personally I think the IRS is totally unrealistic in many cases about the paperwork involved.  They could have closed out 80% of the cases six months ago with a bit of management foresight.



Voluntary Disclosure