How the IRS Locates You

By John Ellsworth, Esq October 22nd, 2012

From time to time I’m asked just how the IRS goes about locating people who are in hiding and trying to avoid the payment of taxes. The answer to this question is given in the Internal Revenue Manual (IRM), which provides as follows:

For domestic accounts, research of the following resources is required:

  • Telephone directories
  • Information Return Program (IRP) data, using Corporate Files On-Line (CFOL) command codes SUPOL or IRPTR
  • Postal tracers, when a field call to the master file address confirms the taxpayer is unable to locate or contact, see IRM 5.1.18.12, United States Postal Service, for additional guidance on postal tracers.
  • For international accounts, the same sources will be checked whenever available for the country in question.
  • For domestic accounts where the aggregate unpaid balance of assessments is over ≡ ≡ ≡ ≡ ≡ , attempt to develop leads by researching the following additional sources:
  • Motor vehicle records
  • Employment commission
  • On-line courthouse records for real and personal property, if you have access to the appropriate on-line tools, see IRM 5.1.18.4, Real Property Records
  • In-person courthouse records for real and personal property if you do not have access to the appropriate online tools .
  • Local licensing authorities when a taxpayer has a business that requires a license
  • On-line services that help in locating taxpayers, such as Accurint; follow security guidelines when using public internet search engines
  • Conduct Currency and Banking Retrieval System (CBRS) research when IRPTR reflects that a taxpayer has filed a Foreign Bank Account Reporting (FBAR) form to obtain the name of the bank where the account is located, the amount in the account, co-owners, and other useful information. See IRM 5.1.18.15, Foreign Bank and Financial Account Report.
  • For international accounts, besides using these sources when and where practical, a Tax Attache could be consulted for further potential sources of value for the country in question.

The above list is not all inclusive. Local management may require that additional information sources be checked, for example U.S. Coast Guard and local licensing agencies where boat ownership is common.

For larger accounts, a field call to the taxpayer’s last known address is required. If it appears the taxpayer is still living at the address, but is unable to be contacted, check utility companies, to see who is paying the bills at the taxpayer’s address and how the bills are paid, for a possible levy source. In addition, a field call must be made to the courthouse to check real and personal property records if not available on-line. See IRM 5.1.18.4, Real Property Records.

Note: For taxpayers residing outside the United States, and territories other than Puerto Rico and the U.S. Virgin Islands, a field call may not be practical. Any taxpayer contact (including a field call) that requires foreign travel must be coordinated with the U. S. Competent Authority (delegated to the Deputy Commissioner (International), Large Business and International), who may authorize such travel based on treaties or other international arrangements.

Reminder:

W&I and SB/SE ACS call sites and tax examiners in the Collection Field function are exempt from the requirement to make field calls.

For Individual Master File (IMF) taxpayers, sole proprietor taxpayers, and for LLCs where an individual owner is identified as the liable taxpayer, secure and analyze a full credit report if the aggregate unpaid balance of assessments exceeds a certain amount . This includes cases where recently filed returns will result in liabilities in excess of a certain amount . For additional information on credit reports see IRM 5.1.18.17, Consumer Credit Reports.

When the aggregate unpaid balance of assessments exceeds ≡ ≡ ≡ ≡ ≡ , research the following additional sources:

Check CC AMDIS to determine if there is a current open examination. If there is an open examination, contact the revenue agent to see if he/she has a new address for the taxpayer or has identified any additional assets.

Request a passport check when the taxpayer travels overseas frequently or there is reason to believe the taxpayer travels overseas frequently in accordance with IRM 5.1.18.13, United States Passport Office.

Consider requesting that a taxpayer be placed on the Department of Homeland Security lookout list if you have been unable to locate or contact the taxpayer and if they live outside the U.S. or travel outside the U.S. See IRM 5.1.12.26, Treasury Enforcement Communications System.

Here’s the bottom line from attorney John Ellsworth: it’s never productive to hide from the IRS. Most tax problems can be quickly and efficiently resolved to your satisfaction and to the satisfaction of the IRS if you will just contact me, John Ellsworth, and discuss with me your worries and concerns. This kind of problem only gets worse with time, so please…call me now. All such discussions are confidential and cannot be obtained from me by the IRS or any other federal or state agency.

This entry was posted on Monday, October 22nd, 2012 at 4:23 pm and is filed under Avoiding Tax. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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