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IRS: when the whip comes down

Apparently inspired by the release of the movie "Fifty Shades of Grey," a recent, playful Forbes article likened the IRS to a dominatrix and taxpayers to those who need "safe words" to help escape the federal agency's punishments.

"Too bad," the writer notes, "because if you mess up in taxes there are no safe words."

Maybe.

We like to think that there are safe words, including the following addressed to an IRS employee asking about possible tax violations: "Before I comment, I want to speak with my attorney." While a conversation with an attorney does not guarantee that all clouds of suspicion will vanish or that criminal tax violations will be rescinded, a conversation with your attorney will help you to understand the degree of seriousness of your situation, as well as your legal options, and what steps you and your attorney should take to clarify your tax return, banking records, accounting, and so on.

As Forbes notes: "Don't talk. You want to be social and courteous, but if the IRS visits your home or business, you have the right to decline to speak to them."

It's simply not worth the risk of inadvertently saying something you'll possibly regret later. It is much better to discuss matters with your attorney and get the facts clear in your mind before discussing matters with IRS employees.

Forbes also says that if you have foreign accounts, and have had past reporting mistakes or failures, the transition to a new reporting relationship with the IRS is "delicate." The suggestions put forth in Forbes are important advice. I have warned clients for years of the risks involved in speaking with the IRS without an attorney.

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