IRS Third Party Summons and How to Deal With Them

So you just got notice that the IRS issued a summons to your spouse, a family member or someone you do business with such as a bank, supplier or client of yours. I bet your first response was embarrassment and your second response was fear. Both valid.

The IRS can issue a third party summons “to a person other than the person with respect to whose liability or return the summons is issued, or any officer or employee of such person.” The Internal Revenue Manual Part 25, Chapter 5, Section 6, gives them the authority to do this.

The IRS must do three things for the third party summons to be in compliance with the law.

  1. The IRS must give you notice of the summons.
  2. The IRS must give the third party 23 days to respond to the summons. Response time is calculated from the date the notice is mailed or personally served on you.
  3. The IRS cannot accept the records from the third party until the 24th day after the notice, unless this time has been waived in writing.

There are two ways for you to respond. You can comply or file a petition to quash the summons.

Complying means you are not fighting the IRS. They will continue to enforce the summons against the third party, get what they need and use that against you. 

Filing a petition to quash the summons means you are going ask a judge to deny the IRS’ third party summons.  You will have to file a civil case in a U.S. District Court. You have 20 days from the time you are noticed to file your petition.

Dealing with a summons is more complex than the scope of this article. There are a number of case specific factors that need to go into determining how you respond to a third party summons.

If you were served notice, get experienced help. Don’t wait until the last minute. You could lose important rights by failing to meet required deadlines.