IRS (Internal Revenue Service) Summons Law and Legal Definition

Taxation that prevails in the United States relies basically on self assessment, which allows the taxpayer to disclose all information necessary for the determination and collection of taxes. Later on Congress felt that this system is not very effective, because most of the people normally do not come up voluntarily to disclose taxes. In considering these factors Congress has given the IRS the authority to issue summons.

A summons is a powerful mechanism which gives IRS an authority to require taxpayers and other third parties to provide the pertinent information regarding the investigation and collection of taxes to the IRS. In most of the situations, a summons is issued by the IRS where taxpayers fail to provide information through voluntary means.

Individuals such as the taxpayer (person who is entitled for the filing of tax returns, taxes to be paid); an officer or employee of the taxpayer; a person who has the custody, possession or care of the books of account; and any information possessed by an individual which helps the IRS in determining a liability making a return can be summoned. Through issuance of summons IRS is required to obtain only relevant information ascertaining the correctness of any return, collecting and determining a tax liability, and enquiring into any offense connected with the administration or enforcement of the internal revenue laws.

In order to serve a valid summons the IRS must meet the following requirements : a) must be properly served; b) must be signed by an authorized IRS officer; requested information must be specific; and must provide a reasonable time and place of the meeting. To obtain enforcement of a summons, the IRS must first establish its 'good faith' by showing that the summons: (1) is issued for a legitimate purpose; (2) seeks information relevant to that purpose; (3) seeks information that is not already within the IRS' possession; and (4) satisfies all administrative steps required by the United States Code. [United States v. Powell, 379 U.S. 48, 57-58 (1964)].

The taxpayer or third party must appear in person after receiving a summons. A representative cannot appear on behalf of the party summoned. Any person who is summoned has the right to counsel. Without a valid reason, a person cannot refuse to comply with the summons. Failure to comply with summons will result in judicial remedies. The power to enforce summons is not vested with the IRS; rather they can apply to the local District Court in order to enforce the production of requested information.

Persons summoned by IRS has some rights and privileges such as the privilege against self-incrimination guaranteed under Fifth Amendment; right to be represented by counsel; attorney-client, husband-wife, and clergy-penitent privileges; right to make an audio recording of the proceeding; right to petition to quash a third-party summons; and the right of third-party witness to refuse unreasonable requests and to raise appropriate defenses.