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IRS Acquires Phone-Hacking Software | IRS Lawyer News

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It seems that the IRS audit powers are increasing more and more at the expense of taxpayers’ privacy rights. In June of 2019, the IRS posted a procurement notice on its website to award a contract to a company Cellebrite, an Israeli company that specializes in smartphone decryption software and equipment. In other words, the IRS is about to acquire phone-hacking software from this company.

IRS Phone-Hacking Software: Primary Targets

What exactly does the IRS want to be able to hack? It appears pretty much everything that is used by taxpayers on a daily basis. Cellebrite software is capable to hacking both Android and Apple phones. Moreover, it can extract data from programs such as WhatsApp, Instagram and Facebook. This data-extraction ability covers encrypted messages.

According to Cellebrite’s website, its software would allow the IRS to “go beyond texts, call logs and photos with a comprehensive toolset that effectively accesses data from the widest variety of digital sources.” Furthermore, “advanced capabilities help you bypass passwords, overcome locks and encryption challenges to extract and decode complete data from the most devices, operating systems and applications. You can also extract and preserve public and private data from social media and other cloud-based sources, providing an unparalleled amount of forensically sound digital evidence.”

IRS Phone-Hacking Software: IRS Is Not the Only Federal Agency to Use It

The IRS is not alone in its usage of phone-hacking software. US Secret Service, US Immigration and Customs Enforcement, Federal Bureau of Investigation and other government agencies have acquired phone-hacking abilities, including from Cellebrite. One of the most famous examples of a government agency using phone-hacking software occurred with respect to a mass shooter’s iPhone. After Apple refused to cooperate with the FBI, the Bureau reportedly used an “outside party” to unlock the iPhone used by the San Bernardino shooter (the FBI has denied it, but it appears that the rumors are true).

Also, this is not the first time that the IRS used Cellebrite software. It appears the IRS has had contracts with the firm all the way back to 2009. In those instances, the IRS simply paid Cellebrite for its services to unlock a specific phone. This time, however, the IRS wants the software license, equipment and maintenance support.

IRS Phone-Hacking Software: Privacy Invasion Concerns

The fact that the IRS will acquire the capability to directly hack into taxpayers’ phones raises all kinds of privacy concerns. When will the IRS use it – only in criminal investigations or also in civil ones? Will there be a judicial review of the IRS usage of this software? Who will authorize the hacking and under what circumstances? How will the privacy rights of innocent taxpayers be protected? Will the information obtained by the IRS be shared with other federal agencies? What about state agencies? What kind of safeguards are in place to prevent the usage of the discovered data (especially when it is not relevant to tax compliance) for political vendetta purposes?

All of these questions are highly-important concerns in our world of rapidly-disappearing privacy rights. This is a concern that should be shared by all members of our society.

Sherayzen Law Office will continue to follow these recent developments with respect to expanding IRS capabilities to investigate US taxpayers.

IRS Written Advice Defense & The Written Request | Tax Lawyers MN

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This article is a continuation of the series of articles on the IRS Written Advice Defense. In the first article of this series, I outlined the legal test for the Defense. The second article of the series focused on the first prong of that test. In this essay, I would like to briefly highlight the second prong of this legal test: the IRS written Advice must be issued in response to a taxpayer’s written request.

IRS Written Advice Issued in Response to Written Request by the Taxpayer

This second prong of the IRS Written Advice Defense is not as simple as it seems at first. The main issue here is when a specific written request is considered to be made by a taxpayer. Obviously, if the taxpayer writes a written request himself, it was made “by a taxpayer”. What about a request made by a taxpayer’s representative?

The IRS regulations state that a written request from a taxpayer’s representative shall be considered a “written request by the taxpayer” only if two conditions are met. First, a taxpayer’s representative must be “an attorney, a certified public accountant, an enrolled agent, an enrolled actuary, or any other person permitted to represent the taxpayer before the Service and who is not disbarred or suspended from practice before the Service.” Treas. Reg. §301.6404-3(b)(3).

Second, “the written request for advice either is accompanied by a power of attorney that is signed by the taxpayer and that authorizes the representative to represent the taxpayer for purposes of the request, or such a power of attorney is currently on file with the Service.” Id.

The Written Request for the IRS Written Advice Must Be Properly Made

In a future article, I will describe the property abatement procedure with which the taxpayer’s written request must comply. For the purposes of this essay, I just wish to point out that this is the second major issue concerning written requests for the IRS Written Advice.

Contact Sherayzen Law Office for Professional Help With Your IRS Written Advice Defense And Any Other Reasonable Cause Defense

If the IRS has imposed penalties as a result of an audit of your tax return or FBAR, contact Sherayzen Law Office for professional help. We have helped US taxpayers around the world to deal with their IRS penalties, and We can help You!

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