Some IRS Managers Using Investigation Quotas to Assess Agents

With any investigation of your taxes by the Internal Revenue Service (IRS), you would like to think that the agents involved are most interested in a reasonable and just settlement of the tax controversy.

If you blatantly violate the tax laws, you would expect to be aggressively investigated and prosecuted. However, if your tax controversy is a genuine area that is open to interpretation, you do not want to feel as if you are being targeted simply because the special agent for the IRS needs to add to his or her total of investigations.

Some taxpayers may have experienced this, as a report from the Treasury Inspector General for Tax Administration (TIGTA) found that last year some IRS managers improperly used quotas when assessing the performance of their employees.

The IRS is prohibited from using quotas, as it creates the wrong type of incentive for special agents investigating taxpayers. Using proxies, like amounts of assets seized are also an improper method of judging agents performance.

Any investigation by the IRS of a taxpayer is a stressful and potentially expensive event for that taxpayer. The Internal Revenue Code and its accompanying thousands of pages of regulations are not without ambiguity and when a taxpayer is required to "lawyer up" and defend their transactions and their filings, the investigation should be bona fide, and not simply driven by an agent needing to accumulate additional points for their yearly review.

The inspector general noted that managers should also pay closer attention the agent's behavior when interacting with taxpayers, as the law requires managers to assess the tone of the agent's behavior when dealing with taxpayers.

Having an attorney at your side can help level the playing field when you are questioned by the IRS. While agents should be respectful and courteous, the presence of an attorney can keep everyone on their best behavior.