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IRS Taxpayer Bill of Rights

IRS's Taxpayer Bill of Rights

In an effort to be a kinder friendlier IRS, the organization has released its Taxpayer Bill of Rights:

Bill of Tax Rights

  • The Right to Be Informed
  • The Right to Quality Service
  • The Right to Pay No More than the Correct Amount of Tax
  • The Right to Challenge the IRS’s Position and Be Heard
  • The Right to Appeal an IRS Decision in an Independent Forum
  • The Right to Finality
  • The Right to Privacy
  • The Right to Confidentiality
  • The Right to Retain Representation
  • The Right to a Fair and Just Tax System

What does this mean for you? How well does the IRS follow these guidelines? As a taxpayer, it is absolutely vital to be informed, and understand what these "rights" mean, and what they do not.

The Right to Be Informed

Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

 

Our Take: This should really be entitled, "The Right to Information," but whether or not that information is clear and concise is not as simple as the IRS implies it is. Taxpayers absolutely must educate themselves; naivety or lack of understanding, is nearly never an adequate defense when you have to defend a tax position.

The Right to Quality Service

Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.

We hope this means that the hours that we have to wait on hold, even on our priority lines, will be a thing of the past. While we are not getting our hopes up, most agents are courteous and professional. 

The Right to Pay No More than the Correct Amount of Tax

Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

This is a important ambiguous statement. Tax Court shows that what the IRS considers "legally due" is not always proper, and too often taxpayers have to spend time and funds arguing their correct position. The second half of this "Right" can be dangerous when taxpayers make assumptions as to what "properly" means. Tax Court case after case shows that the intent of where payments should be applied is not always respected by the IRS. 

The Right to Challenge the IRS’s Position and Be Heard

Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

The IRS has routes that taxpayers must take if they disagree with the agency. If you receive correspondence from the agency, you must timely discuss it with us. While often it is a trivial matter, you would not want to lose your right of appeal by missing a deadline.

The Right to Appeal an IRS Decision in an Independent Forum

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

See above.

The Right to Finality

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

Again, knowing your rights and what the law allows is vital when negotiating with the agency. Numerous factors need to be weighed to plan and act on a strategy.

The Right to Privacy

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.

The IRS has access to databases and information that the world's salesmen can only dream of. They have an ethical obligation to respect that information, and we help our clients make sure that they do.

The Right to Confidentiality

Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer return information.

In light of recent IRS scandals, we hope that they will turn their sight towards their own agency. That said, in a time of huge privacy breaches and leaks the IRS is actually faring well compared to others.

The Right to Retain Representation

Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.

In other words, the tax law is not simple. Everyone needs an advocate. 

The Right to a Fair and Just Tax System

 

Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.

A Kinder gentler IRS?

 

See Also: http://www.irs.gov/uac/Newsroom/IRS-Adopts-Taxpayer-Bill-of-Rights;-10-Provisions-to-be-Highlighted-on-IRSgov,-in-Publication-1