
IRS Restructuring and Reform Act of 1998
3414 - Prohibition of Threat of Audit
to Coerce TRAC Agreement

Section 3414
A. Provision(s) covered: Section 3414- Threat of Audit Prohibited to Coerce TRAC
Agreement
B. Background: Some taxpayers have alleged that agents threatened them with an
audit if they did not execute a TRAC agreement.
C. Change(s): Specific direction in statute to instruct employees not to
threaten an audit to coerce a taxpayer to enter into a TRAC agreement.
D. Impact: None-the statutory provision reflects IRS policy.
E. Necessary Actions
- Issue memorandum to field directing examiners instructing them on this provision and the
importance of not threatening audits when soliciting TRAC agreements.
- Conduct national video conference for employment tax examiners including awareness
discussion of this issue.
- Remind Examination chiefs at national Exam Chiefs meeting and District Directors at
Executive CPE that examiners should be aware of this provision and the importance of not
threatening audits when soliciting TRAC agreements.
F. Other Special Comments: None