When it comes to the Internal Revenue Service (IRS) and its authority to examine tax returns, there is a specific statute within the Internal Revenue Code (IRC) that grants them this power. This statute is Section 7602, titled “Examination of Books and Witnesses.”

Section 7602 authorizes the IRS to conduct examinations, and gather relevant information, pertaining to a taxpayer’s tax liability. The section empowers the IRS to summon individuals, including the taxpayer, and others who may possess books, records, or other relevant documents related to the taxpayer’s tax obligations.

In simple terms, this statute allows the IRS to request and review documentation to ensure that the information reported on tax returns is accurate and in compliance with the applicable tax laws. This examination process helps maintain the integrity of the tax system and promotes fairness among taxpayers.

Additionally, various other sections of the IRC complement Section 7602 and further delineate the procedures, guidelines, and restrictions applicable to conducting examinations. For instance, Section 7605 outlines the rules governing the examination process itself, while Section 7609 addresses the issuance of third-party summonses.

I stay informed about the current version of the Internal Revenue Code, and offer professional guidance to ensure compliance with tax regulations, and help you navigate the intricacies of the Service’s authority to examine your tax return.