A Summons is not a Subpoena

So I’m at the golf course watching the golf pro give a lesson to several students.  It is a beautiful spring day , the grass is getting green and the air is clear and still.  After several minutes of hitting balls, I started feeling a little cocky.  So I walk over and ask the pro  if he needs my help.  He says yes, could I go wash his car.

Humiliating.

Unfortunately, some individuals in the El Paso IRS offices  never learned that lesson.  Recently a large number of new clients have come to see me with an IRS summons.  This is a most intimidating document and it has frightened these new clients terribly – until I talk to them.  So today I am going to talk to you about it as well.

A summons is a written demand by the IRS for information.  It can be served upon a bank for your bank records.  It can be served upon employees to testify about how you run your business.  It can even be served on you individually to force you to bring all of your records and to testify under oath about your finances.  It is a tool to obtain information most often for use against you.

The actual summons document is quite imposing.  It has SUMMONS typed in big block letters across the top.  It commands you to take certain action and to do so at a certain time and place of the IRS’ choosing.  It is normally served upon you in a very formal manner – often in person by an IRS agent – who may waive an IRS badge under your nose.  This is heavy stuff.  You can understand why I have seen grown men cry when bringing these documents in to me.

But here is the rest of the story.

A summons is only an administrative demand.  This means the IRS agent examining your return or attempting to collect taxes simply types out a pre-established form.  Typically it is done because someone failed to bring in records within the limited time the IRS agent allowed.  This summons is supposed to get your attention, strike fear in your heart, and generate all kinds of confessions to violations of each of the ten commandments.

When a summons is not honored, the IRS agent can do nothing himself.  He must refer it to an IRS attorney for review and referral for judicial enforcement.  Now that is important to know.  Be careful to document why you couldn’t comply.  IRS attorneys are not foolish persons that blindly obey a local IRS agent on a power trip.  They routinely grant us a second chance to comply.

Then there are lots of defenses to a summons.  For example, the time and place for producing the records must be reasonable.  This means it must be at least ten days after service of the summons.  Many of my business clients cannot always meet those time requirements, especially if they are out of town or if the family is ill.  Just reschedule.

Another defense is possession.  When a summons is served for records, the summons is valid only for those records that are actually in your possession or control.  If you don’t have the records, don’t panic.  You only have to bring what you have.

There are lots of other defenses.  The summons must be for information that is relevant to the audit, and it can’t be issued just to harass or intimidate the taxpayer.  The courts have refused to enforce a summons which was seeking information that was not relevant or which was unduly burdensome to obtain.

And if all of this fails, the IRS still can’t enforce the summons.  That can only be done by a federal judge in a formal but secret legal proceeding.  I’ll write about that next.

Folks, the point of all this is don’t be afraid when you receive a summons.  It is merely an administrative request for information – and then only information that you actually have.  While I’m definitely not saying ignore it, I am saying don’t be intimidated by the local generals, I mean IRS agents.  Give them what you have and forget about it.