I have written before about the Potentially Dangerous Taxpayer (PDT) designation that can be given to those who are stupid enough to harm or threaten IRS employees. A recent audit done by the Treasury Inspector General for Tax Administration (TIGTA) finds that IRS employees have been well trained in the criteria and procedures having to do with PDT, but are not as familiar with the less grievous CAU (Caution Upon Contact) designation.
Your tax account will be coded PDT if you harm, threaten, or intimidate IRS employees with specific acts, or if you affiliate with groups that advocate such actions. You can also be labeled PDT if you have demonstrated a clear propensity towards acts of violence in the previous 5 years. The CAU designation is just one step below this and includes any “threat of physical harm that is less severe or immediate than necessary to satisfy PDT criteria” — a catch all for taxpayers who are really, really annoying, but not obviously dangerous.
These designations are important because they dictate how IRS personnel are to approach (or not approach) certain taxpayers, and they dictate what kinds of “back up” they are entitled to during field visits. According to the TIGTA report, failure to report (and accurately designate) dangerous or threatening taxpayers creates an undue risk for other IRS employees who may have future interactions with them.
Can PDT or CAU taxpayers be forgiven of their bad behavior? Yes, after 5 years. But the 5-year period begins afresh if any of the following occur:
- additional PDT/CAU referral
- IRS employee physically assaulted
- taxpayer arrested for threats or actual violence towards IRS employee
- “current IRS activity” on their account
This final criterion is interesting. The report indicates that examples of “current IRS activity” are an audit or a balance due. In other words, somebody who threatens an IRS employee and then doesn’t pay off his tax debt within 5 years must endure the ugly label of PDT/CAU for a minimum of 10 years. Remember, you don’t have to like the person who issued a tax levy against you, just be civil!