Service is their last name

Today’s post is a combination of a guest post and something written by me.  I was inspired by receiving an article that former colleague at Chief Counsel’s office and recent guest blogger, Lavar Taylor, sent to me as well as by the recent Treasury Inspector General for Tax Administration (TIGTA) Report on potentially dangerous taxpayers (PDTs) and particular those PDTs who are tax practitioners.  This post will contain some of my views on the subject of working with the IRS as well as some of Lavar’s.  Back in the early 1980s, Lavar worked in the National Office of Chief Counsel in the General Litigation Division and he assisted local offices, such as the one I worked in located in Richmond, Virginia.  We had the opportunity then to work on many cases together and I gained a high respect for his work.  He went on to many other endeavors including working in the United States Attorney’s office in Los Angeles, starting his own firm, and teaching at Chapman Law School.  These give him an excellent perspective on working with the IRS.  Lavar’s comments in this post come from an article he wrote for the California State Bar Tax Section’s Tax Procedure and Litigation Committee quarterly publication. My experiences are largely shaped by working there for over 30 years as well as running the low income taxpayer clinic at Villanova for the past seven years.

Lavar’s comments focus primarily on civility while my comments will include a discussion of potentially dangerous practitioners as a subset of PDTs.  My comments are in italics.  


I chose the title of today’s post from a statement/joke used by one of my colleagues and supervisors, Eliot Fielding.  Eliot would diffuse situations in which something had gone wrong by saying “Service is our last name.”  That let people know in a friendly way that those of us working at or with the IRS were aware that the service a taxpayer received was not always world class.  While not everyone would agree, I thought this was a good way to diffuse situations in which a taxpayer or a representative was particularly unhappy with what had happened on their case up to that point.  Sometimes dealing with the IRS brings out the worst in people and some representatives take it personally in ways that may not serve their client’s best interest.

Regardless of why attorneys engage in this type of conduct, those of you whose vocabularies consist of words and phrases that go beyond vituperative and vitriolic demagoguery should be asking yourselves whether the use of uncivil language and/or conduct towards the employees of federal and/or state taxing agencies is ever appropriate.  Consider that, at some point, certain types of uncivil conduct towards IRS employees could result in you spending time in the pokey.  See IRC §7212, United States v. Lovern, 2002-2 U.S.T.C. ¶50,48 (4th Cir. 2002) (Conviction under section 7212 upheld where taxpayer stated a number of things to a TIGTA Special Agent, including: “Oh, you don’t have a choice, because I’m going to shove it right up you [sic] ass.”). 

I attended Mr. Lovern’s trial and had several phone conversations with Mr. Lovern prior to the trial.  He engaged in amazing behavior on the phone with numerous employees at the IRS.  At one level I did not feel threatened by Mr. Lovern in these calls but at another level his language deviated so far from the norm and contained enough threats that it was impossible to totally dismiss.  He is the kind of person that the recent TIGTA report addresses.  According to that report there are 84 representatives among the 2,169 individuals labeled as PDT and 2.3 million representatives in the CAF.  Certainly, the number of representatives with this label is a minute subset of the overall group of representatives and less than 4% of those labeled PDT yet TIGTA correctly expresses concern that employees at the IRS will have trouble identifying this group.

Acquiring the label PDT is not easy.  I recall one individual who came to the attention of my office through the collection office in Northern Virginia.  The person did not have good English skills and was not a native speaker.  Still, the language used gave every appearance of threatening death to the IRS employee who contacted him.  We had sufficient concerns to seek the PDT label and were told our evidence did not meet the criteria.  Instead the person was labeled CAU. The experience of seeking the PDT label in that case left me with the distinct impression that if I ever met someone who did have that label I should be especially concerned.  For a practitioner to achieve that label is very troubling. (Look at the TIGTA report for a definition of PDT and CAU.) 

We had a practitioner who killed his neighbor as part of a boundary dispute.  He was acquitted of criminal charges on the grounds of self-defense.  In a meeting in our office he led the person with whom he was meeting to believe that he carried a concealed weapon.  I am unsure how the conversation moved to that issue but the person in my office was concerned.  We were located in a private building relatively far away from any security officers.  We did research and found that to bar someone from bringing a weapon into our space we needed to post a sign stating that weapons were not allowed and citing to the controlling statute.  We bought the sign and quickly put it up.  There is nothing like a weapon in a meeting or the concern that someone in the meeting has a weapon to change the feel of the meeting – at least for the IRS employee.  I do not know if the sign worked but it made us feel better.

TIGTA is concerned that the IRS is not doing enough to protect its employees from PDT practitioners because the normal way to know you are about to meeting with a PDT is to seek the code for such an individual by looking at the transcript.  Since IRS employees do not routinely pull the transcript of representatives, they go into meetings with PDT representatives unprepared.  The IRS seemed to think that it is unnecessary to include the PDT designation system into the CAF system in order to alert its employees to the presence of a PDT representative.  I tend to agree with TIGTA on this one but wonder how the Office of Professional Responsibility fits into this picture.  If a representative is PDT, that seems like a good reason to revoke or suspend their ability to practice before the IRS.  If their ability to practice before the IRS were revoked or suspended simultaneously with the determination of PDT status, perhaps that would solve the problem or greatly reduce it. 

Moving beyond PDT practitioners, what about practitioners whose behavior does not go to the extreme of PDT status, but who do not behave courteously.  How does behavior impact their practice and their clients?  Lavar focuses on that in his comments. 

Suppose that you call a collection officer on the date a client’s financial form is due to be delivered to the collection officer and explain that you have learned that the client’s mother-in-law has just died, and that you would like an extension of time to submit the signed financial form.  The collection officer tells you that they will not extend the deadline, that they think your client is not acting in good faith, and that they think that the client’s mother-in-law is not dead at all, and that this is just a ruse to avoid and delay payment of legitimately owed taxes, because, if their own mother-in-law had died, they would be out celebrating.  That type of comment, which wins the trifecta (rude, insensitive, AND insulting), is not any less frustrating than other comments I have heard from some employees of tax agencies over the years. 

How do you respond to a comment by a government employee when it is incredibly frustrating and rude?  Tell them that, if their mother-in-law hates them, that their mother-in-law must have excellent judgment?  Call them the spawn of the Devil?  Report them to TIGTA?  When deciding whether to be honest and let them know exactly how you feel, it may be appropriate to recall the immortal words of the late George Carlin, who said: “Honesty may be the best policy, but it’s important to remember that apparently, by elimination, dishonesty is the second-best policy.” 

Human nature is to respond in kind.  That is a mistake in most circumstances.  I once inherited an audit where the prior representative had literally placed the IRS agent conducting an on-site audit of the company’s records in room without windows or air conditioning, with a pile of thousands of pages of documents, in the middle of July, when the outside temperature was 95 degrees.  The reward reaped by the client?  A proposed fraud penalty in a case where there was no unreported income.  We managed to get the proposed fraud penalty removed in Appeals, before the matter went to Tax Court, but only after the client incurred a significant amount of professional fees.  A trip to Tax Court, which would have resulted in the public disclosure of both the nature and amount of the IRS’s claim against the client, would have destroyed the client’s business, even if they had prevailed at trial. 

Consider, instead, responding with humor and/or kindness (both of which will be completely unexpected) or by finding a way to demonstrate that the person speaking to you might want to reconsider what they just told you.  For example, in response to the hypothetical statement discussed above, you might immediately commiserate with the collection officer about how much you hate your own in-laws.  (That won’t work if you actually like your in-laws, as you would be making a false statement to a federal employee in violation of 18 U.S.C. §1001.)  Or you might instead tell the collection officer a clever joke about your in-laws. 

Coming up with a clever response that diffuses the situation (which should also demonstrate your effectiveness as a representative of your client) can be difficult, but it can usually be done.  In a particularly difficult Tax Court case in which the IRS was asserting the civil fraud penalty against my client, the IRS attorney handling the case blurted out to me at one point: “Your client is scum!”  I thought for a few moments and then replied as follows: “You know, I don’t agree with you that my client is scum, but let’s pretend that I do.  To the best of my knowledge the Internal Revenue Code taxes scum in exactly the manner, and in exactly the same amount, as non-scum.  So if you are willing to stipulate that my client does not owe any additional taxes, I’ll gladly stipulate that my client is scum.”  I never heard another disparaging comment about my client thereafter, and my client agreed to pay taxes on a stipulated (and significantly reduced) amount of unreported income at non-scum tax rates.  Once in a while, of course, your self-control is going to slip, and some sort of epithet (“levy and lien lounge lizard,” “summons sucking scumbag,” or something similar) is going to slip out.  You and your client will then pay the consequences, whatever those may be.  Treating government employees with civility and politeness will almost always yield a better result for your client. 

Some of you may have noticed that I snuck in the word “almost” into the last sentence. Yes, there will be that rare case where responding in a manner that is not completely civilized is the most effective response.  But how you determine when to respond that way?  Perhaps you just use your own good judgment while keeping in mind that your actions may impact not only your current client but future ones as well.