Your Curmudgeon has kept the myrmidons of the Internal Revenue Service at bay through the expedient of doing his tax returns in Norse runes and Roman numerals. (Yes, this is legal.) However, other approaches have always been of interest. The following suggestion is exceptionally striking, and potentially highly consequential:
If you’re ordered to an audit, put your papers in a box (any papers will do, as you’ll see), and take the box and a friend to the IRS agent’s office. The agent will ask you both to identify yourselves. You comply, and ID yourself, your friend replies “Silent witness number one.” (The agent will probably ask more than once. Your friend replies the same way each time. The agent will give up.)
The agent will ask if you have brought your tax documents. You nod your agreement. He will ask for the documents. Move as if to give him the box, but then stop. Ask him, “Can anything I reveal to you be used against me?” The agent will tell you, “Yes.” Then you ask, “Can I be compelled to deliver to the government information that may be used against me?” The agent will respond, “No.”
Tell the agent the audit is over, as you respectfully decline to surrender information that may be used against you, and thank him for his time. You and your witness leave. Audit done.
I’ve been the witness at several such proceedings. Works every time. No need for an attorney.
The IRS won’t retaliate. If they had something to hang you with, they would not be asking for an audit, they’d be charging you, and would have conducted the investigation without your knowledge or cooperation. The audit is a fishing expedition that effectively acknowledges that they have nothing on you. They also know that retaliating against someone who did nothing but assert his rights could put them in deep doo-doo. You’re probably not worth the trouble you could cause them. They will just move on to their next chump.
Your Curmudgeon can only applaud.
Every aspect of the tactic described above is vital to the success of the approach. Note that the auditor cannot compel “Silent witness number one” to disclose his identity, for he is not the subject of the audit. Thus, the IRS would not know whom to try to intimidate. Asking the two indicated questions in the indicated order is also vital. Politely ending the audit is then merely the assertion of an individual right the auditor has already conceded.
This Mark Butterworth novel proposes another approach: intimidating the auditor. It’s too long to quote here, but do read the book, which is filled with assorted delights.
Any Gentle Readers who have other well-tested techniques for thwarting the IRS are encouraged to submit them in email. Heavily encrypted, of course.