Whether you have been contacted by the IRS or you have initiated contact with them, understanding the specific role and responsibilities of the person you are dealing with will better enable you to address the issues at hand and resolve any problems in as expeditious manner as possible. The IRS is a tangled web of divisions, campuses, and offices, each with its own special function and its own special personnel. This article provides a rundown of who’s who at the agency and what they do.
The IRS is basically divided into four operating divisions: Wage and Investment (W&I); Small Business/Self-Employed (SB/SE); Large Business and International (LB&I); and Tax Exempt/Government Entities (TE/GE). Each of these divisions is relatively autonomous, with its own headquarters, staff, and mission.
The W&I Division deals with exam, collection, and other administrative issues for individual taxpayers who file a Form 1040 with no Schedules C, E, F, or Form 2106, and minimal or no international activity. Individual taxpayers who do not fall into the W&I category, as well as businesses with assets of less than $10 million, are handled by the SB/SE Division. Larger businesses and most taxpayers with international income are handled by LB&I, and tax-exempt organizations (including retirement and welfare benefit plans) as well as state and local government entities are subject to oversight by the TE/GE Division.
Each of the four operating divisions is headed by a Commissioner. The work of the division is generally divided up into small work groups of 8-12 IRS employees headed by a Group Manager. An IRS employee who contacts you about an audit or collections matter is required to provide you not only with their own IRS badge number, but their Group Manager’s name and contact information as well.
The W&I division manages several regional locations throughout the country formerly known as “Service Centers” and now known as “Campuses.” The Campuses process returns, conduct correspondence audits, and operate the Automated Collection System, or ACS. If you call the IRS toll-free number (800-829-1040) you will speak to someone located at a Campus known as a Telephone Assistor. Telephone Assistors have limited training in tax law and generally respond to questions based on pre-determined scripts.
More information about the structure of the IRS can be found on the IRS website.
Most W&I taxpayers who are audited will undergo a correspondence audit conducted by a Tax Specialist or a Correspondence Exam Technician. As the name implies, these audits are conducted primarily by mail -- the old-fashioned kind using the U.S. Post Office, not email. The IRS does not initiate contacts with taxpayers via emails.
Taxpayers who have business income or losses or other special issues may be audited by a Tax Compliance Officer or TCO. In these so-called “office audits,” the taxpayer is asked to bring certain supporting documentation to a local IRS office, where they will meet with the TCO. The taxpayer may also have an opportunity to discuss any unresolved issues with the TCO’s Group Manager.
Tax Specialists, Tax Technicians, and TCOs have more extensive training than Telephone Assistors, but are still relatively low on the food chain of IRS personnel. Educational prerequisites to be employed as a TCO, for example, include only six hours of undergraduate credits in accounting or the passing of an accounting proficiency test.
The IRS personnel who visit taxpayers’ homes and offices to conduct field audits are Revenue Agents who work in SB/SE, LB&I, or TE/GE. Revenue Agents are the most highly trained IRS exam personnel. Prerequisites to becoming a Revenue Agent include the completion of a bachelor’s degree with a major in accounting or its equivalent. Many Revenue Agents are also CPAs and some are even attorneys.
An informative series of video presentations about the audit process can be viewed on the IRS website.
Most taxpayers who owe delinquent taxes are first contacted through ACS. As the name indicates, these contacts are automatically generated by the Campuses at specified intervals. If you call the IRS in response to a letter generated by the ACS you will most likely speak to a Contact Representative. Note that once your case is in Collections the IRS personnel you deal with will generally have no authority to respond to any tax calculation issues – they are purely concerned with collecting the amount shown as being due. If the collection efforts of ACS are unsuccessful the case may be transferred to a Revenue Officer.
Revenue Officers are the field collection agents of the IRS. They will generally work from an IRS office near your home or place of business and may visit you to discuss payment arrangements. It is important to distinguish between a Revenue Agent and a Revenue Officer; the latter handles collection matters while the former deals exclusively with audit issues. If you are being audited you will have an opportunity to contest any additional tax assessment proposed by the IRS. If you are in collections, the amount you owe has already been determined.
Since Revenue Officers are solely concerned with collecting assessments and not with determining the proper amount of the assessment, no accounting or tax background is required for this position. A Revenue Officer’s training is primarily geared to locating and levying upon the taxpayer’s assets.
In addition to the four operating divisions, there are several IRS offices the functions of which cut across the divisional lines, such as the Taxpayer Advocate Service, Appeals, and Criminal Investigations.
The Taxpayer Advocate Service or TAS is staffed with Case Advocates who assist taxpayers in resolving problems with the IRS. In an extreme case, TAS can issue a Taxpayer Assistance Order, which is essentially an injunction to stop the IRS from taking some action. TAOs are only issued when a taxpayer is suffering or is about to suffer a significant hardship as a result of the manner in which the IRS is handling a case. A TAO is requested by filing Form 911 (yes, Form 911) with the TAS. The telephone number of your local TAS office can be obtained from the IRS website or you can contact them at 877-777-4778. You can also obtain information from the TAS website.
Appeals Officers and Settlement Officers conduct informal hearings with taxpayers regarding disputed audit results or contested collection activity. They also work with taxpayers to try to resolve cases that are headed to Tax Court. Appeals Officers handle issues dealing with tax liability while Settlement Officers deal exclusively with collection-related appeals. Both Appeals and Settlement Officers tend to have more experience and a more extensive educational background than Exam or Collection personnel. Settlement Officers, however, like Revenue Officers, focus on the collection process and procedure and may have little technical tax expertise.
Special Agents from the Criminal Investigation office essentially function as the police force of the IRS, investigating taxpayers suspected of criminal tax violations and sometimes making arrests. Special Agents are the only IRS personnel who carry firearms and have police powers. Any contact with a Criminal Investigation Special Agent should be taken seriously and a lawyer consulted immediately.