Interviewing Taxpayers

The purpose of an interview with the taxpayer is to obtain an understanding of the taxpayer's background, financial history, business operations and internal controls, and books and records in order to evaluate the accuracy of such information.

• The interview should be held with the person(s) most knowledgeable about the development and on-going operation of the IRC §42 project. It may be necessary to interview more than one person.

• The interview should be held early in the examination because the interview is an opportunity to gather information that can help establish, and possibly limit, the scope and depth of the examination.

• Generally, interviews should be conducted after reviewing the documents requested in the first Information Document Request (IDR).

IRC §7521(c) authorizes a representative to represent a taxpayer at any interview. However, the taxpayer's voluntary presence should be requested if the representative cannot provide:

• firsthand knowledge of the taxpayer's business, business practices, bookkeeping methods, accounting practices, and daily operations,

• factual and reliable responses to questions,

• timely follow-up information for any questions that could not be answered at the time of the initial interview, or

• A properly authorized Form 2848, Power of Attorney and Declaration of Representative (POA), or Form 8821, Tax Information Authorization from the taxpayer.