Back in 2008, IRSMedic founder Anthony Parent created a YouTube video called "Three Things Never to Say to the IRS". Since it's upload it has been viewed over 227,000 times(!). As much as we make fun of Anthony and his 'over performance' we realized that the message of the video is actually spot on. The original video is here:
Needless to say that since that time the firm (and our marketing department) has grown by leaps and bounds. And Anthony's side burns have shrunk. Phew.
What are the three things never to say to the IRS?
It's not really what to say, but what not to say.
Never voluntarily tell the IRS anything unless they have specifically asked you for the information; only give them the information they ask for and nothing else. We find that people have a natural tendency to overshare. Never forget this — the IRS is a real threat to your life. The IRS agent you are dealing with is not your buddy and you can't curry favor with them by telling them what you think they want to hear.
Anything you say to the IRS can be used against you; they can make assumptions about your situation based on a small amount of evidence. They can take your words and translate them into what they believe you are saying; they can twist your words to work in their favor. They only need a few snippets of information to create a story and then fill in the holes with data that makes you look guilty.
If the IRS keeps pressing you for information you have the right to say nothing and have an attorney talk to them on your behalf. You do not have to speak to the IRS; you can have representation do so. Your goal should be to never have to communicate directly with an IRS agent. And don't think that hiring an attorney makes you look guilty; on the contrary, it makes you look smart.
If you're being questioned by the IRS it doesn't necessarily mean that they have a case against you. Don't feel pressured to explain anything — remember, no one has ever talked themselves out of trouble.
Don't stretch the truth, not even a teeny tiny bit; you only need to get caught in a little bit of a lie to be found guilty. If you lie to an IRS employee or lie on any IRS forms, it's a criminal offense. You could be charged and put in prison. If you're not completely sure about something, say you can’t recall or do not know.
If you can't remember all the details and make something up, the IRS can take what you do tell them out of context and create their own version of the facts. This false version can get you charged with a crime.
The IRS game
It's not just the questions you need to worry about, it's the "Why" behind the question. Think to yourself, "Why is the IRS asking me this question?" Case in point: We had a client come to us for help — we'll call him 'Dan'. Dan had some offshore accounts that he knew needed to be reported to the IRS. Unfortunately, Dan's brother passed away unexpectedly. This death left his family reeling; IRS forms were the last thing on his mind. He ended up filing the form after the due date.
The IRS contacted Dan and asked why he didn't file the form on time. His response was "I just couldn't be bothered". He did not tell them about his brother's untimely passing, so the IRS came to the conclusion that he willfully ignored the due date. The IRS hit him with a 'willful penalty' of $25,000. At this point Dan realized that he shouldn't have tried to deal with the IRS on his own and came to us for help.
We were able to dramatically reduce the penalty by telling the IRS the entire story and negotiating with them. We explained that Dan did know about the form, but was mourning his brother's passing and didn't realize just how time sensitive the due date was.
The bottom line
So are we basically telling you that when it comes to talking to the IRS, you should keep your mouth shut? Yes, but in a nice way. It's because we deal with the IRS every day and we see the havoc they can wreak on people's lives. If you have a tax issue that you are concerned about, contact us to schedule a free, confidential consultation. Call us at 888-727-8796 or email email@example.com.