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As I understand it, it is a crime to lie to any federal "officer" including IRS agents. People have been convicted of doing so and sent to prison.

This obviously creates a serious liability for anyone undergoing an "interview" during an audit. Since the agent will ask dozens and possibly hundreds of questions, the potential for "telling a lie" is enormous, even for a person who is attempting to be as truthful as possible. Also, there is the possibility that the agent can simply misremember or incorrectly note information that makes it look like the person has lied. (Once I read an investigative officers notes about questioning me, and not only did he mispell my name, but his notes were littered with mistakes and mischaracterizations of what I had said.)

Therefore, there would seem to be the possibility that the IRS could convict anyone of a felony for "lying".

The only way to escape this would seem to be to claim the 5th ammendment and refuse to answer questions during an interview, but this appears to be illegal as well.

Does this mean a taxpayer is in Catch-22 situation that makes them legally defenseless, or is there some way to defend against this?

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    "The only way to escape this would seem to be to claim the 5th ammendment and refuse to answer questions during an interview, but this appears to be illegal as well." Can you explain why you think this is illegal? – Nate Eldredge Feb 5 '18 at 14:08
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    AFAIK these statutes only forbid intentional and material false statements. So in theory if you are attempting to be truthful, you haven't committed a crime. The burden would be on the government to prove that not only did you say something materially false, but that you knew that it was false, and intended to mislead. Of course, in practice, juries do sometimes convict innocent people, but that's not unique to this statute. – Nate Eldredge Feb 5 '18 at 14:12
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    As to the agent misremembering, you could bring along a witness (lawyer, accountant, etc) who could later testify as to what you said. It might also be possible to record the interview, or ask that the agent record it. – Nate Eldredge Feb 5 '18 at 14:13
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    @NateEldredge Claiming the 5th Amendment can protect you against a criminal prosecution but leads to a presumption in the civil tax dispute that you committed a crime and that you would have answered the question in a manner adverse to your interests. It would result in imposition of heavy fines and interest and all the taxes the IRS was asking for. – ohwilleke Feb 5 '18 at 20:20

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