MSSP guidelines for lawyers.

When fully implemented, MSSP is expected to provide agents with audit selection and examination guidelines for 80 industries. A summary of the guidelines for auditing attorneys is provided below. The guidelines are based on a 1988 IRS study of lawyers in San Diego that revealed more than 10% of practicing attorneys were nonfilers. The IRS says the data do not necessarily translate to the same level of noncompliance nationwide.

The guidelines say referrals--from IRS or other sources--provide the best leads. Referrals might come from.

* IRS records that show a taxpayer's previous payments and withholding.

* National directories of attorneys.

* Lawyers' advertisements.

* Audits of other taxpayers.

The sole proprietor attorney has the higest audit potential, according to the guidelines; attorneys who practice in criminal law, real estate law and immigration law have higher potential for noncompliance.

Agents are told to check attorneys' records of client fees, time spent on cases and costs. It is suggested agents examine appointment agents examine appointment books, client card indexes, daily log or receipt books, disbursement ledgers and time reports. Agents should examine all bank accounts involved with the practice, including any trust accounts attorneys use to hold client funds. The guidelines warn it may be difficult to locate such accounts.

The guidelines detail the scope of attorney-client privilege and the use of administrative summonses. They also tell agents when and how to check for employment tax audit issues--namely, treatment of secretaries, paralegals and clerks, who, as independent contractors, are generally under the close supervision and control of the attorney-employer.