During the course of an audit or an investigation, can the IRS contact third parties without telling me who they are contacting?
A. In general, such audit practice is no longer permissible under the law. IRS employees may contact persons other than the taxpayer under investigation to obtain information relating to either the determination or collection of tax. Under prior law, the taxpayer would not necessarily be informed about who the IRS has contacted. But now the current law requires the IRS to inform the taxpayers of the identity of the persons it was in contact with regarding their tax liabilities. Specifically, the IRS has three obligations. First, it must notify the taxpayers at the beginning of the examination and collection process that it might contact third parties about the taxpayer s tax liabilities. Second, the IRS must keep track of the third parties who are contacted. Third, it must provide that information periodically to the taxpayer or whenever asked by taxpayer.
