Well, yesterday (Thursday, September 30, 2004) was my meeting with the IRS pursuant to a summons that they had left at my house several weeks ago.
First of all I want to say that I had a GREAT time! If you are properly prepared (both mentally and with documents), remain calm, and pay strict attention to all that is being said and done in the meeting room you can demolish their purported authority to summons from many different legal perspectives. I know I said this before, but I had FUN!
As always, I was affable as could be with the Revenue Officers (herein RO); after all, if you've got the law on your side, there's no reason to be unpleasant. The old adage, "kill them with kindness" (or at least civility) comes to mind. This also has the added benefit of helping to over-turn the garbage that they are fed in training about us "Patriots". Being well mannered and having sufficient evidence to devastate their authority is the best revenge! They HATE that!
Whether it be the style of the new, more friendly, IRS or just the "tactics" of these particular RO's, we sat and BS'd for about an hour before they ever asked any questions that fell within the scope of "producing books and records". That was fine with me because I had blocked out several hours for the meeting and and I had decided many days ago that I would not "take the fight to them", but rather would allow them to voluntarily enter the minefield! It was kinda cute because the lead RO (Billingsley) just sort of slipped a question in about what I'm doing for a living these days. It really sounded quite conversational. It almost sounded like a common question that someone might ask you over a friendly beer - almost, but not quite!
At that point I asked if we were entering the portion of the meeting that would fall under his alleged authority to summons me for books and records. He was not happy that his little ploy had not worked, but he admitted that we were now in that area. As I had written to him in advance and had requested several documents to support his claim of alleged authority, he voluntarily handed me (without being asked a second time) a copy of the Delegation of Authority Order which he stated showed his delegated authority from the District Director to summons me. Interestingly, upon review, the Order [LA-6 (rev 16)] showed that the authority to "issue" summons was indeed delegated to RO's with a GS-9 and above rating [item 3 in the Order]. However, in item 4 of the Order I found that the authority to "serve" the summons was delegated ONLY to a Tax Fraud Investigative Aide. Isn't it nice of the District Director to be so specific! I asked the RO who had served the summons at my home if he was also a Tax Fraud Investigative Aide. He stated that he was not. I informed him that we had a little problem. I told him that if he was not a Tax Fraud Investigative Aide, then his service of the summons was a nullity because he exceeded his authority and everything from that moment forward was legally void. He wasn't too hot on that little reality check!
RO Billingsley then started making accusations of non-cooperation. In the spirit of cooperation (and having far more ammunition up my sleeve) I told him that if he preferred, we could pretend that his service was good and move on. He liked that idea and then requested my books and records. I explained that I meant that we should go on to the next question concerning the validity of his alleged authority. I wish I had a blood pressure monitor hooked up to that guy! I think it would have exploded!
I thought I'd go easy on him a while, so I moved directly to the language of IRC section 7602. Section 7602 state (in its relevant part) that, "...the Secretary is authorized...to summon the person liable for tax...". I pointed out to the RO's that the language of 7602, i.e. "the person liable", is present tense. In other words, in order for 7602 to have any legal effect, the IRS must ALREADY KNOW that the person IS liable for a tax. I pointed out that section 7602 does not contain any authority for the Service to go on a "fishing trip" in the hope of uncovering some fact(s) that might then create liability. I then asked the RO's to place "on the record" (I was taping the meeting) any evidence they had that proved I was liable for any tax contained in the IRC for the years indicated on the summons. As could be expected, there was no evidence.
I thought it was time to get ugly again, so I shifted to the IRS' history and organizational statement in Part 1100 of the Internal Revenue Manual (IRM). I asked the RO's in which Division they worked. Both stated that they worked in the assigned to the Collections Division. I had brought copies of the section which outlines the organization of the various Offices/Divisions/Departments, etc. of the Service. In the section I brought, it numerically designates the Office of the Assistant Commissioner (International) as 1132. Every division/department within the Office of the Assistant Commissioner (International) is designated with 1132 followed by a period and then one or two more digits. As an example, the Office of Resource Management is 1132.5, while the Director of the Office of Resource Management is 1132.51.
Now watch this series carefully:
Officer of Asst. Commissioner (International) 1132 Office of Taxpayer Service and Compliance 1132.7 Director, Office of Taxpayer Service and Compliance 1132.71 Collection Division 1132.72.
Hello! That doesn't take a rocket scientist. And for those inquiring minds--yes, 1132.72 is the ONLY collection division listed in the entire IRS organizational statement. Needless to say, both RO's vehemently denied that they work for the Assistant Commissioner (International), but could not provide any evidence to refute their own manual.
I then read them the functional description of their division from 1132.72, to wit; "Executes the full range of collection activities in delinquent accounts which includes securing delinquent returns involving taxpayers outside the United States and those in United States territories, and possessions and in Puerto Rico. Administers the program for mutual collection assistance under tax treaties. Provide assistance...". Despite the fact that there is only one collection division mentioned in the org statement and that the functional description is from their own manual, they were adamant that I had lost my mind! Of course when I suggested that they return me to sanity by providing documentary evidence which would dispute 1132.72, they demurred. Hmmm.
I then went to the old standard--there are no implementing regulations for 7602 in Title 26. The only reg promulgated by the Secretary for 7602 is found in Title 27 (which deals exclusively with ATF matters). The RO's stated that the statute was sufficient and that there was no need for regs in this matter. I simply reminded them that the Secretary obviously thought otherwise because he had promulgated regs for 7602 in Title 27. I pointed out that that fact clearly confirms that a reg IS needed to implement 7602 and that the Secretary had apparently decided that 7602 was NOT to be applied to tax matters other than those relating to alcohol, tobacco and firearms. Of course, once again, the RO's assured me that I was an idiot and that they did have authority to apply 7602 to me in matters of non-ATF taxes. Needless to say, I was told that I would simply have to take their word for it.
And last but not least, I informed them that Treasury Decision 120-01 (which transferred the functions of the IRS' Division of Alcohol, Tobacco and Firearms to the newly-created "Bureau" of Alcohol, Tobacco and Firearms) specifically transferred the functions of Revenue Officers to the BATF. Boy oh boy! You would have thought I set off firecrackers in their pants! They got down right nasty about this time. Anyway, I asked them if they had any evidence that I was involved in ATF activities. Of course the answer was "no."
About this time I think they were getting tired of getting beat down with their own agency's paperwork showing the authority they DIDN'T have, so they decided that our meeting was over. Too bad--I was having such a good time and I had so much more to offer!
In the near future I'll be editing the recording tape down to the parts that are the most fun, useful, and interesting and I'll be offering the finished product for sale at about $20.00 per copy. Whether you have a potential summons in your future, or you've never been to one and want to hear what really goes on, or you just want to be entertained, I'm sure you'll find it worth the money.
Monday, September 26, 2005