The IRS must follow a series of procedures to collect unpaid taxes. The first step is to send written correspondence to the taxpayer informing them that their tax return is overdue and advising them of the penalties for continuing to fail to file. From there, the IRS may place a lien on a taxpayer’s property, followed by the execution of a levy. It could hand long-delinquent cases over to private debt collectors. Our Los Angeles tax advisors have observed that the IRS recently announced that revenue officers (ROs) will be visiting high-income taxpayers with at least one unfiled tax return in 2020. “High-income” in this instance means annual income of more than $100,000.
What Is a Revenue Officer?
ROs work at IRS field collection offices located around the country. Their job is to collect unpaid taxes, but their powers in that regard are somewhat limited. They are civilian employees, not law enforcement officers. They therefore do not wear a uniform or carry a firearm, and they cannot make arrests. They carry identification cards, not badges.
If an RO has reason to believe a criminal offense, such as tax fraud, has occurred, they must refer the matter to the IRS’s Criminal Investigation Division (CID). CID agents carry badges and can make arrests.
The RO’s job, according to the IRS, is to “help [taxpayers] understand and meet [their] tax obligations.” In cases where a taxpayer has not filed one or more tax returns, an RO will advise the taxpayer of the deficiency and try to obtain the necessary documentation. They will ask for payment if there is an outstanding balance due, but they are supposed to “provide a range of payment options.”
When Do Revenue Officers Pay Taxpayers a Visit?
The IRS must notify a taxpayer about a missing tax return or overdue tax payment before it can do anything else. It usually makes several attempts to contact them via U.S. mail. A taxpayer who has received more than one item of correspondence from the IRS could be subject to a visit from an RO.
ROs generally do not contact a taxpayer in advance of an in-person visit. This is partly due to the logistical difficulties of scheduling, but also because of the possibility that a taxpayer might try to evade the RO.
Regarding the planned in-person RO visits in 2020, an IRS spokesperson has said that the purpose of the visits is to “bring [taxpayers] into compliance,” not “to frighten or intimidate” them. The IRS reportedly plans to start the in-person visits in February, and to conduct at least eight hundred visits by the end of March. Another IRS official has stated that, because of prior communication from the IRS, “these visits should not…come as a surprise to the taxpayer.”
What Are a Taxpayer’s Right if Visited by a Revenue Officer?
The Taxpayer’s Bill of Rights (TBOR) governs all interactions between IRS employees and taxpayers. The first right listed in the TBOR is “the right to be informed.” A major part of the RO’s job is to inform taxpayers of what they need to do to come into compliance.
ROs must also abide by taxpayers’ “right to challenge the IRS’s position and be heard.” They do not have authority to adjudicate disputes with taxpayers, but they are obligated to provide taxpayers with information. Taxpayers also have “the right to retain representation” in a “fair and just tax system.”
The Enterprise Consultants Group’s tax advisors are available to assist you with your tax-related problems and questions. To schedule a consultation with a member of our team, please contact us today online or at (800) 575-9284.