What to do when your client receives a summons.

• Author: Chambers, Valrie

Many people are at least somewhat disconcerted when the IRS delivers a summons. A taxpayer who receives a summons may be under examination, or the IRS may be looking for information that he or she may have about another taxpayer (called a "third-party summons"). This item addresses summonses when issued in taxpayer examinations and is not designed or intended to be a full articulation of the significant legal implications of a summons or its enforcement. Taxpayers should seek legal advice to consider the implications of a summons.

If a summons is written properly and delivered as required by law, a U.S. district court can compel compliance. Dismissing a summons out of hand is ordinarily not a good strategy. This item explains why.

The IRS's authority to take any and all actions related to a summons derives primarily from Secs. 7602,7603, and 7604. Provisions on matters such as enforcement, third-party summonses, and oaths are located elsewhere in the Code.

In most situations, a summons is issued to a taxpayer when the IRS believes the taxpayer possesses information the government needs to examine a return or collect an assessment, and the taxpayer is uncooperative in providing the information using routine IRS administrative procedures, such as an information document request. A summons is usually issued only after repeated attempts to obtain voluntary compliance have failed.

The summons should provide the name and address of the person summonsed, a specific description of the material it is seeking (look for the words "any and all"), including oral testimony, the time and place for the delivery or appearance of the taxpayer, and some information on the reimbursement of reasonable costs for the production of records. Because the time frames contained in a summons are usually quite short, the taxpayer needs to act quickly upon receipt.

Ignoring a summons initiates a lengthy legal process that is outside of the IRS's hands. The IRS's Office of Chief Counsel can only litigate matters in Tax Court. By virtue of Sec. 7402, the jurisdiction for all litigation on summonses (including their enforcement) resides in a U.S. district court. Therefore, summons enforcement is the responsibility of the U.S. attorneys with the Justice Department.

If the requirements for a summons, generally referred to as the Powell factors, are satisfied, the U.S. attorney will decide whether to petition the district court to enforce the summons. Depending on the matter...