In part one we discussed the IRS power to issue a summons in the pursuit of its mission. A summons empowers the IRS to access the records it needs to facilitate its investigation and collection of delinquent income taxes. However, if the taxpayer becomes the subject of a criminal investigation, the IRS can swear out a search warrant and use the power of subpoenas.
At this point, the IRS focus is no longer on collection. The purpose is to discover proof that someone has committed a crime, usually tax evasion. The IRS agents involved work for the Criminal Investigation Division, and they are not interested in financial settlements.
The IRS confines its search warrant process to the most serious tax investigations:
"All other investigative tools (i.e., mail covers, surveillance, informants, trash pulls) should be considered before deciding that a search warrant is the least intrusive means to acquire the evidence." (18.104.22.168, IRS Manual)
To get a search warrant, the IRS must show probable cause and convince the judge who signs the warrant that the search is justified. This includes sworn statements by the IRS investigators.
The IRS Manual covers criminal investigation for income tax matters in excruciating detail, and if you become a target of a search warrant, the best advice is to stop talking and get a qualified lawyer to defend your Fourth Amendment rights.
A subpoena is another type of court order that requires someone to testify at a hearing or provide documents at a specific place and time. The IRS uses subpoenas to compel disclosure of information either in the form of records or personal testimony, before a grand jury for example.
Again, the IRS Manual states what their investigating agents must do, and the best advice is to refrain from responding to a subpoena and get legal advice. The subpoena might demand records that are protected from search or seizure.
The key intent of the Fourth Amendment is personal privacy. Under the Fourth Amendment, everyone has a reasonable expectation of privacy in his or her private and personal effects and records. Likewise, you are protected by the Fifth Amendment from making self-incriminating oral statements.
The Fifth Amendment privilege also extends to your personal papers, but you must be the sole owner of the papers and have them in your possession. Also, the attorney-client privilege applies if you communicate confidentially with your lawyer to seek legal advice.
In these two discussions of the Fourth Amendment and how the IRS can summon, search and seize your property, we have only scratched the surface of their power versus your rights. If your interaction with the IRS rises to the level where subpoenas and search warrants are involved, the advice offered earlier -- to say nothing and to get legal counsel -- goes double, because you are in the realm of high stakes.
Here at DeBlis & DeBlis we have the experience, wherewithal and knowledge of the Tax Code to help you out before things get worse. Give us a call. We're here for you.