23 Akron Tax Journal 1 (2008).
41 Pages Posted: 23 Apr 2007 Last revised: 30 Jan 2013
Date Written: March 30, 2007
This article focuses on the standards governing when an IRS examining agent should assert a deficiency against a taxpayer based on a legal issue. The IRS is charged with enforcing the tax laws and collecting unpaid taxes. However, since the United States uses a self-assessment tax system, the most important means for enforcing the law is for the IRS to create an environment that encourages taxpayers to voluntarily comply. To do this the IRS must provide understandable guidance to taxpayers and avoid over-reaching in its direct dealings with them. This article contrasts the relatively well-defined standards applicable to taxpayers in determining whether a tax return reporting position is permissible with the uncertain state of the law regarding the level of certainty required for the IRS to assert positions. The article maintains that to promote greater taxpayer compliance, the IRS should operate under more stringent standards when asserting positions than would be generally applicable to taxpayers.
Keywords: tax, position standards, opinion standards
JEL Classification: H2
Suggested Citation: Suggested Citation
Lavoie, Richard, Analyzing the Schizoid Agency: Achieving the Proper Balance in Enforcing the Internal Revenue Code (March 30, 2007). 23 Akron Tax Journal 1 (2008).; U of Akron Legal Studies Research Paper No. 07-12. Available at SSRN: https://ssrn.com/abstract=981758 or http://dx.doi.org/10.2139/ssrn.981758