Pappas & Associates, P.A.

KOGER CENTER LAKEPOINTE II.

930 WOODCOCK ROAD 3111 W. DR. MARTIN LUTHER KING BLVD.
SUITE 227 SUITE 100
ORLANDO, FL 32803 TAMPA, FL 33607
TELEPHONE 407 648-2555 TELEPHONE 813 282-1009
FACSIMILE 407 264-6580
EMAIL: PPAPPAS@PAPPASLAW.COM

April 10, 2009

Doug Shulman, Esquire
Commissioner of Internal Revenue
10th St & Pennsylvania Ave, NW
Washington, DC 20004

RE: IRS Abuse of Taxpayer Right to Counsel

Dear Commissioner Shulman:

I am a CPA and attorney and have been practicing tax law for over 25 years.

This is the first time I have found it necessary to contact the Commissioner about a problem I
have had with an IRS employee.

In only a handful of cases have I found it necessary to file a TIGTA complaint against a Revenue
Agent. Each of those cases involved, among other things, an IRS agent who violated the taxpayer’s right
to representation.

Every one of these TIGTA complaints were ignored and I was never contacted by an investigator
to discuss the circumstances of the alleged violation nor am I aware that the IRS officials who were the
subjects of the complaint received so much as a private reprimand.

I stopped filing TIGTA complaints not because I no longer experienced IRS misconduct, but
because they were futile.

In any event, please be assured that I do not take the filing of a complaint against an IRS official
lightly and I would not be lodging one now if I did not believe the facts, circumstances and the interests
of justice warranted it.

Summary of the Facts

In the past month I have had two IRS revenue agents contact my clients directly even though the
IRS had on file powers of attorney authorizing me to represent them.

In one especially disturbing case, a Revenue Agent, Michael X, Badge No. 59-XXXXX visited
my client’s place of business and told her that she did not need a lawyer, should not have hired a lawyer
and should have paid the IRS instead of wasting her money on a lawyer.

He then proceeded, over her repeated objections, to ask her detailed questions about her finances
and her ability to pay the IRS.
Mr. Doug Shulman
Commissioner, Internal Revenue
April 9, 2009

See Exhibit “A” for the taxpayer’s sworn affidavit.

What is particularly outrageous is that all of this happened after the following had occurred:

a. We had sent to ACS a fully supported and documented request for an installment agreement;
b. The IRS had reassigned the case to the Revenue Officer; and
c. We had spoken with the Revenue Officer and had responded promptly and thoroughly his
calls and requests for additional information.

The actions of Mr. X provide a textbook example of an IRS official’s violation of a statutorily
granted taxpayer right and should it should not be cavalierly set aside.

These cases do not happen in a vacuum, however.

The IRS Has a Culture of Disrespect for IRS Representatives

As a fellow lawyer, I am sure you can appreciate how disturbing this is and why so many IRS
representatives believe that the IRS pays only lip-service to a taxpayer’s right to representation.

The Michael X case is, I believe, merely a symptom of a bureaucratic culture that disrespects and
disregards a taxpayer’s unequivocal right to representation in matters before the IRS.

For every one of these obvious violations of a taxpayer’s right to counsel there are hundreds of
more subtle abuses.

Here is a non-exhaustive list of acts in which IRS Revenue Agents regularly engage that either
eliminate or diminish a taxpayer’s right to counsel:

1. Make Unreasonable Demands and Set Unreasonable Deadlines: Revenue Agents often
impose unreasonable and unfair time deadlines for return telephone calls from IRS
representatives and then, when those strict deadlines are not met, use that fact as an excuse to
contact the taxpayer directly and tell them their representative isn’t doing his or her job.

2. Disparage IRS Representatives as a Class: Revenue Agents frequently discourage

unrepresented taxpayers from hiring counsel at the same time they hand those taxpayers the IRS
Declaration of Rights the first listed right of which is the taxpayer’s right to representation.

3. Decline or Return POAs for Hyper-technical reasons: IRS personnel regularly decline or
return Powers of Attorney for petty, technical reasons. There is great inconsistency among IRS
Revenue Agents as to the proper completion of Form 2848.

4. Prepare Complex Forms “on behalf” of Taxpayers: Many Revenue Agents will hastily prepare
financial statements and conduct 4180 interviews without telling the taxpayer that these
documents are to be signed under penalties of perjury. The Agent should make this very clear to
the taxpayer and remind him or her of the taxpayer’s right to counsel. The Revenue Agent cannot
Mr. Doug Shulman
Commissioner, Internal Revenue
April 9, 2009

and should not give any counsel, or make any recommendation to the taxpayer because he or she
has a clear conflict of interest.

5. Engage in Unlicensed Practice of Law: When dealing with unrepresented taxpayers, Revenue
Agents regularly take it upon themselves to give taxpayers legal advice.

There are two obvious problems here:

A. Unless the Revenue Agent is also a licensed lawyer, this constitutes the unlicensed practice of
law and is illegal.

B. Even if the Revenue Agent is authorized to practice law, he or she has a clear conflict of
interest and should disclose that fact to the taxpayer and (at least in accordance with the Rules
Regulating the Florida Bar) obtain a written waiver of the conflict.

Sanctions are Available for Abuse by IRS Employees of Taxpayer Rights

If a taxpayer’s right to representation is to mean anything, these kinds of abuses, both the blunt
and the subtle ones, must be stopped.

The IRS has the mechanism to do it.

Congress passed a law in 1998 that requires the IRS to swiftly and severely deal with such
abuses.

The IRS’s anti-retaliation policy (Section 1203 (b)(6) of RRA ’98) states:

Violations of the Internal Revenue Code of 1986, Department of Treasury regulations, or policies
of the Internal Revenue Service (including the Internal Revenue Manual) for the purpose of
retaliating against, or harassing, a taxpayer, taxpayer representative, or other employee of the
Internal Revenue Service [is an act or omission requiring termination].
I have sent a copy of this letter to Ms. Nina Olson, National Taxpayer Advocate, Mr. Charles Rangel,
Chairman of the House Ways and Means Committee, and Senator Bill Nelson of Florida.
One of the most frustrating things about these abuses is that in at least 80% of the cases, an IRS
representative facilitates collection of an outstanding IRS debt.
For example, we advise hundreds of taxpayers a month to file their delinquent tax returns and
offer some kind of payment arrangement with the federal government.
We are clearly not the enemy.
Why is it then that the IRS continues to treat us as if we were?
Request for Imposition of Sanctions against Revenue Officer Michael X
While I do not like to see anyone lose his or her job, especially in a difficult economy like the one
we have now, I do not see the point of having an Anti-Retaliation policy that is not enforced.
Mr. Doug Shulman
Commissioner, Internal Revenue
April 9, 2009

Please keep in mind that Mr. X did not merely speak with my client about her case, he expressly,
deliberately and repeatedly tried to persuade her to fire her attorney and deal directly with him.
I cannot imagine a clearer violation of the Anti-Retaliation provisions of RRA ’98.
The law provides for termination in these cases and my client and I seek only what the law
demands.
Thank you in advance for your attention to this critically important matter.
If you have any questions or require further information, including an in-person meeting at your
office, please have one of your assistants contact me.
Respectfully yours,

PETER C. PAPPAS, ESQ.

PCP/mdd
Enclosures

cc: Ms. Loretta Ahrens

Ms. Nina Olson, National Taxpayer Advocate
Congressman Charles Rangel, Chairman House Ways & Means Committee
United States’ Senator Bill Nelson, Florida
Joy Jackson, Internal Revenue Service, Group Manager