An IRS officer(Assessing Officer actually. Not all AOs are IRS and not all IRS officers are AOs.) is a court of Tax Administration. If a company that comes under his jurisdiction, is found to have evaded taxes during assessment, then he can add the amount evaded and not offered to tax, to the company’s income and pass an assessment order.
This is besides the penalty that will be levied. There are also provisions where the assessee may be prosecuted. This is just the gist of the matter. There are many provisions envisaged in the Income Tax Act to deal with such assessees. The course of action is dependent on the the facts of the case.
We don’t have to sue the company in a court of law to retrieve what is legally government money. After we pass the assessment order, if the assessee prefers an appeal (with the Commissioner (Appeals)/ITAT/ HC/SC ), then we may have to contest it.