IRS Revenue Agent Site Inspection - John R. Dundon II, Enrolled Agent
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IRS Revenue Agent Site Inspection

IRS Revenue Agent Site Inspection

Yikes!!! The IRS wants to pay you a visit.  You need to know that Reg. §301.7605-1(d)(3)(iii) states: “Regardless of where an examination takes place, the IRS may visit the taxpayer’s place of business or residence to establish facts that can only be established by direct visit, such as inventory or asset verification.” Generally, this visit will be on a normal workday and during normal work hours of the IRS. Of special note are the words: “to establish facts that can only be established by direct visit.” This means that the IRS should not routinely be making business or residence site visits with every examination.

A site inspection should only be used when it provides the revenue agent with a needed sense of the scope, size, and/or complexity of the business operation that cannot be obtained elsewhere. If the revenue agent feels that a site visit is crucial to the examination, the revenue agent should explain to the taxpayer and/or tax professional why he/she is requesting to inspect the facility and why the site inspection is the only means by which the revenue agent can accomplish this objective.

The revenue agent should not be inspecting the taxpayer’s facilities if the questions are easily answered by other means. Therefore, the examination may generally be conducted in the office of the tax professional representing the taxpayer according to my interpretation of CCA 200949048.