Third-Party Notices.

• Author: Laffie, Lesli S.

In a major policy shift, the IRS announced (IR-99-28) a more selective process to send out third-party notices. The change, effective March 29, 1999, was made to reflect the Service's long-standing policy of contacting outside parties about a person's tax case only as a last resort.

For the vast majority of IRS field examinations, a third-party notice will now be sent only if the agency cannot collect the needed information from the taxpayer. Thus, the IRS will stop sending third-party letters on a blanket basis to taxpayers facing examination questions. The new standard requires using the letters only on an "as needed" basis.

For tax collection issues, letters will continue being sent out on a general basis; the IRS is currently rewriting this letter (Number 3164)...