USA Audit and harassment by the IRS

[Jane Doe]

Hi, last year my husband and I were chosen for a "random" compliance audit for 2014. We did everything they wanted and had our CPA with us. After 5 months and not finding anything, I finally called a lawyer. He told us to tell our CPA to tell the IRS to pound sand. It seemed to work for a few months. Now they want 2015 and 2016. On top of that, I just received a registered letter for 2014 for a summons to appear before the SAME IRS agent AGAIN. What is going on here? Do we have any rights? We do our taxes early every year and purposely use a CPA because I'm self employed. Is this legal and should I get a lawyer? This is harassment in my opinion.

 

[Drmdcpa]

You might want a second CPA to look at your returns and the issues of audit.

They are fully within their rights but usually only request additional years if they have cause to. Self employed generally has more audits.

 

[kirby]

Given that you have been issued a summons and especially since this appears to be harassment , you need to engage a TAX attorney. You are about to enter a legal process which the tax attorney will be familiar with vs the CPA.
Also, your communications with the tax attorney is privileged. Not so with the CPA.

 

[Drmdcpa]

Depending on your state, CPA communications may or may not be privileged. I generally do not recommend you seek an attorney until you have passed the appeals stage.

 

[kirby]

To Drmdcpa
Interesting. I am aware that Fed law allows some limited privilege, which I would not depend on in the above case where the client suspects harassment. But which state are you thinking of which allows a CPA's communications to be privileged completely?

 

[Drmdcpa]

CPA privileged communication is a state law issue, not a Federal law. Attorneys privileged communication is also in fact a state law issue. The difference being as I understand it all states consider attorney communication privileged; whereas only some states grant it to CPAs. Might I suggest you do an internet search to find out which states?

 

[kirby]

Actually, federal law does provide a limited privilege. Check out 26 USC 7525. It is a limited privilege, as I stated previously, but there it is.

 

[Drmdcpa]

I understand there is limited protection under Federal law, but the basic premise of privileged communication, especially as applied to CPAs, is a state issue.