You owe the IRS back taxes, and a local Revenue Officer is coming after you to collect.
Or maybe you received a letter from an IRS auditor stating that they are examining your tax return.
Either way, the IRS is looking into your affairs.
And as part of their investigation, you are asked you to appear at their office for an interview.
Your mind begins to overload.
What will they ask you and what will you say?
What if you talk, and from the stress of the moment make mistakes in your answers, and then cannot remember the conversation?
How do you ensure what was said is preserved?
Your IRS agent will be taking notes and writing down what they may think is important. The IRS likely has conducted an interview like yours dozens of times. It may be new to you, but not to the IRS. That, unfortunately, can result in fatigue in IRS writing down what you said, or not at all. And that can put you at risk.
Unlike court trials or depositions, the IRS is not required to record their interviews. Normally, a judge would have a court reporter present to record everything you say. The IRS does not have court reporters. In fact, without you taking action, nothing likely be recorded.
That means it is your word vs. the IRS.
But it does not have to be that way.
The tax laws give you protections to ensure that your voice and side of the story is not forgotten. You can request to record the interview.
Internal Revenue Code section 7521 gives you the legal right to audio record your interview so nothing is left by the wayside. This protects you from any “he said she said” disputes. And if the IRS is interviewing you, there is a good likelihood what you say could be essential to your defense later.
Here is what you need to know to record your IRS interview:
- Give the IRS advance notice 10 calendar days before the interview.
- Make arrangements to bring your own recording device, or have a stenographer appear with you.
- You cannot record by video, or record telephone conversations, only in-person interviews are permitted.
- The recording pertains to actions by the IRS to examine your tax return, collect tax from you, or conduct a collection due process appeals hearing (Keene vs. Commissioner, 121 T.C. 8 (2003)).
- IRS has the right to simultaneously record the interview.
Sounds good, right?
But caution and strategy should be used before making the request to record.
Believe it or not, the IRS receives relatively few requests to record interviews. Your request will likely involve managerial involvement and approval. It is possible that an IRS group manager will be attending your interview. If you want more IRS agents at the table, recording the interview would do the trick.
If the IRS knows you are recording, they may be on heightened alert, with the possibility of greater preparation for you. They will want to make sure they get it right, with no stone unturned. No longer will your interview be just another day at the office for an IRS auditor or Revenue Officer.
Inadvertently, you are telling the IRS that you do not trust them. And when your head is in the mouth of the bear, saying nice bear can sometimes be more beneficial.
Recording an interview should used on a case-by-case basis. For example, if it appears likely your testimony will be used in the future in an appeal or court proceeding, and you are already at odds with the IRS and there is a communication breakdown, recording could be considered. But if your testimony will move the case to quick conclusion with the IRS agent and it will not be put into question in the future, you may not want to be first to take the gloves off and bring things to a boil.
You are going through a scary and intimidating time with the IRS, and your level of trust may run low. Your rights to record an IRS interview are important, but they should be used wisely and carefully. It is a balancing act – the need to make sure what is said is not lost vs. heightened IRS awareness and attention to your situation.