IRS to Renew 'Random Audit Program' -- Massachusetts Attorney Encourages Consumers to Know Their Rights

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History of IRS audits has not been good, says Massachusetts law firm.

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Starting in October, 2007, the Internal Revenue Service will soon be conducting a Random Audit Program. This type of Random Audit was done in the past, and sometimes with unpleasant results, says a partner in a Massachusetts Law Firm.

Attorney Matthew C. Donahue, of Eno, Boulay, Martin & Donahue, in Lowell, Massachusetts, states that, “People should be aware that these audits will begin, and they will have no knowledge of it.” He added that, “The potential for abuse is strong, and based on the sheer legal might of the IRS, taxpayers should be prepared. A lot of people might find themselves needing assistance,” he cautioned.

“The reason for this program may be because the IRS is under pressure from Congress, which is struggling with budget deficits, to take action on the gap between what the government is collecting each year -- and what the government feels it should be collecting. The amount of this “difference” is estimated to be $290 billion,” Donahue said.

Random tax audits have troubled many people in the past, Donahue continued. In the 1990’s, when the IRS imposed a similar program, many of these targeted individuals felt the audits were invasive.

Individuals were made to produce vast amounts of paperwork to support even trivial items on their returns, according to an article in the Wall Street Journal.

The article, “The Next Audit Scare,” by Tom Herman, June 13, 2007, states that the Internal Revenue Service plans to revive its controversial practice of randomly selecting thousands of taxpayers for audits – even when there is no reason to suspect any wrongdoing. The first audits will begin in October, 2007, and will target 13,000 people of various incomes for Tax Year 2006.

What will the “new and improved” Audit Program look like this time around? “Some people chosen for this auditing may not even realize it’s happening to them – the audit will all be done completely by computer – without their knowledge,” Donahue said.

And the article by Tom Herman continues on to state that the IRS will be able to check the information by making comparisons of what the person reports on their return against what was reported by employers and financial institutions. However – many people will need to endure face-to-face meetings with IRS Agents in order to examine their numbers in much greater detail.
According to CNN.com (All Politics, April 28, 1998, “Senate Panel Hears Stories of Alleged IRS Abuses”) a Senate committee commenced hearings on the abuse of power by the IRS.

At that time, there was testimony from taxpayers about IRS Agents “stepping over the line” – even raids on peoples’ homes, IRS Agents behaving “out of control” and acting “undisciplined.” These Agents were described as “intrusive” and “intimidating,” according to the CNN.com article.
The article went on to state that during these hearings Cody Mayo, an Assistant DA in Caddo Parish, Louisiana, reported that one individual actually experienced an emotional breakdown during an audit, and how another case tragically resulted in the victim’s suicide.

The CNN.com feature continued on to describe testimony that the IRS retaliated against whistleblowers. Yvonne DesJardins, of IRS Employee and Labor Relations, appeared as a surprise witness. She described how people who just wanted to do the right thing were “ostracized,” and their “careers destroyed.” Meanwhile, IRS officials who engaged in any misconduct were protected -- or even rewarded.

Attorney Donahue wants consumers to know that, “First, all taxpayers should review the Taxpayer’s Bill of Rights.” The Internal Revenue Code, Section 7521, states that:

1.    Taxpayers have a right to an explanation of the audit process, their appeal rights, and the collection process;

2.    Taxpayers have a right to be represented by a representative authorized to practice before the IRS;

3.    Taxpayers have a right to suspend an interview to consult with a representative, provided the interview was not arranged through the use of an administrative summons; and,

4.    Taxpayers have a right, with advanced notice to the IRS, to make an audio recording of any IRS interview.

The revised Taxpayer Bill of Rights (TBOR) is much longer and much more complex. You can review this entire thirty-page long document by going to the IRS website http://www.IRS.gov.

“Taxpayers do not have to do this alone – seek assistance. The IRS is the most powerful collection agency on the planet, and the law affords citizens protection,” Attorney Donahue concluded.

Eno, Boulay, Martin & Donahue, LLP (EBM&D), a law firm specializing in both family law and business law, is located in historic downtown Lowell. The skilled professional team of experienced attorneys and paralegals at this firm also has experience in assisting their clients with Taxpayer related issues and peoples’ difficulties in dealing with the Internal Revenue Service. To learn more about the firm’s tax resolution practice, check out their website at http://www.ebmdattorneys.com.

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