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IRS Employees Must Initiate All Future Audits By Mail; Never By Telephone

On behalf of David Whitlock at Whitlock Canter LLC

Effective immediately throughout the IRS, “all initial contacts with taxpayers to commence an examination must be made by mail, instead of the telephone, using the appropriate initial contact letters.” IRS Deputy Commission for Services and Enforcement, John Dalrymple, ordered this mandatory change in policy in a May 20, 2016 memorandum to the Commissioners, Large Business and International, Small Business and Self-Employed, Tax-Exempt and Governmental Entities, and Wage and Investment. Going forward, employees must use the appropriate initial contact letters listed in the Internal Revenue Manual (IRM) to notify a taxpayer when a return is selected for examination, and “will not make initial contact by telephone.

Take away. Although Dalrymple recognized that making initial contact by telephone to schedule an appointment “in some of our examination operations has been a long-standing policy,” he said the IRS is changing its practice specifically in response to “the continuing threat of phone scams, phishing, and identity theft.” He also announced that the IRS is evaluating its other contacts with taxpayers, beyond audits, to determine whether they also carry risks with respect to phone scams and other such threats.

Under the new audit restrictions, IRS can initiate contact by telephone with the taxpayer only after 14 calendar days have elapsed from mailing the letter. If a valid Form 2848, Power of Attorney and Declaration of Representation, is on file for the taxpayer, a copy of the initial letter will also be mailed to the representative with Letter 937, Transmittal Letter for Power of Attorney. Memorandum from John Dalrymple, Deputy Commissioner for Services and Enforcement (May 20, 2016); TRC IRS: 18,000.