The Internal Revenue Service (IRS) has issued new proposed regulations that would further limit the IRS’s ability to use private attorneys as contractors. The newly proposed regulations, published on 7 August 2020 (“2020 Proposed Regulations”), replace proposed regulations issued in 2018. The 2020 Proposed Regulations are the IRS’s first response to the 1999 passage of the Taxpayer First Act, which barred nongovernmental attorneys from questioning witnesses under oath in summons interviews. The newly proposed regulations forbid the IRS from sharing taxpayer books and records with attorney outside contractors, except under limited conditions. The newly proposed regulations also forbid outside contractors from asking a summoned person’s representative to clarify an objection or an assertion of privilege.
Daniel Wharton is an associate in the Baker McKenzie's North America Tax Practice Group in Chicago. He advises clients on a variety of national and multinational tax issues.