The Internal Revenue Service is adept at using leverage to intimidate, coerce and bluff taxpayers and their representatives into adverse tax determinations based upon weak legal authority and incomplete or insufficient facts.
The IRS agent is both "prosecutor" and "jury." The IRS agent raises issues and comes to conclusions that are presumed to be correct under present law. Also, taxpayers, not the IRS agent, must prove the accuracy of their deductions.
This leverage against a taxpayer applies even if the agent uses incorrect or incomplete facts or makes determinations on erroneous or flawed argument and law. When the agent uses incomplete or weak facts and weak legal authority against a taxpayer - it is a "bluff." The agent can be sloppy and incompetent and still get a large and unjustified tax deficiency. The raw power of the agents position and presumption of correctness is intimidating to taxpayers - more importantly, it is intimidating to the representatives of the taxpayer who do not have the skill or ability to identify and expose the "bluff." The "intimidation" of the IRS agent is used as a tool to close cases quickly. It is well documented that the IRS has a high error rate. Accordingly, taxpayers significantly overpay their tax liability, penalties and interest.
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