How should a tax practitioner complain about an IRS agent's conduct?

• Author: Miller, Sandra K.

Most tax practitioners have experienced at least some difficulty in representing clients under audit. Complaints commonly focus on the timeliness of the audit process or the agents training and competence, many practitioners report communication problems with IRS Service Centers. What advice should be given to the practitioner who has not heard from an agent in nine months? Should a practitioner complain if a new agent is unfamiliar with basic tax concept? What form should a complaint assume, and to whom should it be addressed? Will a complaint prolong the audit process? Will the agent seek revenge and assert increased adjustments?

These and other dilemmas were the subject of a recent survey of tax practitioners and IRS employees in the IRS's Philadelphia District. The survey was a result of an IRS/Practitioner "Working Together" initiative conducted in the Philadelphia District (Working Together Program). More than half of the practitioners surveyed disagreed or strongly disagreed that "treatment by IRS employees is consistent." Sizable percentages of practitioners and IPS employees disagreed or strongly disagreed that they are familiar with Circular 230[1] (the standards of conduct governing practice before the IRS).

A separate survey of IRS employees suggests that many IRS representatives appear to distrust tax practitioners; over one-half agreed or strongly agreed that "some practitioners are likely to mislead the IRS in order to gain an advantage for their client." Approximately 45% agreed or strongly agreed that "some practitioners are impossible and disrespectful."

One of the most important results of the study concerned practitioner views on whether to complain about IRS conduct. Approximately 30% agreed or strongly agreed that "complaining will result in negative consequences for the client."

While the results of the research are limited to the Philadelphia District, they provide an excellent starting point for the development of future nationwide research and the identification of possible problem areas in other districts. The IPS National Office has been supportive of the Working Together Program and the prospects of its duplication in other districts nationwide. This article provides a brief summary of the Working Together Program and its surveys and provides basic guidance on how practitioners should assert complaints about IRS conduct.

The Working Together Program

In 1992, several tax practitioners and Philadelphia District representatives began meeting to air their grievances with one another. The first IPSI practitioner Conference was held in 1993 (1993 Conference) at Widener University in Chester, Penn., to facilitate the developing dialogue between the tax practitioner and IRS communities.

Objectives

As the result of numerous complaints that surfaced at the 1993 Conference, "Working Together" committees were established to focus on problems in three major areas: (1) timeliness of the audit process; (2) practitioner concerns regarding the consequences of complaining about an IRS agents conduct to his manager; and (3) awareness of the standards of conduct contained in Circular 230. In addition, surveys of the practitioner and IRS populations were conducted.

While the first Working Together Program was limited to the Philadelphia District, other similar initiatives are being planned by other districts. The IRS National Office has taken a keen interest in the initiative and the prospect of its duplication on a local level in other districts.

The Working Together Program has led to a number of helpful changes in die audit process, and is anticipated to lead to similar modifications on a district-by-district basis once the programs of other districts are in place. A number of measures being taken by the Philadelphia District exemplify the types of changes that can be implemented nationwide.

Increased use of opening conference: In large cases, a special "Opening Conference" is usually held by the agent and the practitioner to establish audit guidelines and set forth a tentative timetable. To enhance communication and increase efficiency, the Philadelphia District now conducts Opening Conferences in all field business examinations of corporate and partnership returns and Schedule C.

Increased manager involvement in audits: The involvement of audit managers in the audit process tends to increase the level of IRS expertise on the case. The Philadelphia District requires manager involvement on corporate examinations involving assets of $10 million or more. The names of group managers and their fax numbers appear on all correspondence dated after June 1, 1995.

IRS notice of delays: In the Philadelphia District, the IRS routinely notifies a practitioner of any delays of more than days when an auditor is on a training detail.

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