When interacting with the IRS, America’s taxpayers have specific rights. There are ten rights that cover a wide range of topics and issues, and lay out what taxpayers can expect in the event they need to work with the IRS on a personal tax matter. These ten rights are known collectively as the Taxpayer Bill of Rights.
The Right to Be Informed
Tax payers have the right to know everything they need to in order to deal with the IRS. They should have an understanding of what they need to do to comply with the tax laws. Explanations of the laws and IRS procedures in all forms, instructions, publications, notices, and correspondence should been given. This way it is clear what is required by the taxpayer. They should also be informed of IRS decisions about their tax accounts, and receive clear explanations of the outcomes.
The Right to Quality Service
Prompt, courteous, and professional assistance when dealing with the IRS is another right given to taxpayers. Proper communication that is clear and easy to understand is also required. If inadequate service is given, they can speak to an advisor.
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. This includes interest and penalties. Additionally, taxpayers can expect to have the IRS apply all tax payments properly. If taxpayers have overpaid, they can seek help and find out how to file for a refund.
The Right to Challenge the IRS’s Position and Be Heard
If taxpayers notice an issue, they have the right to raise objections. They can provide additional documentation in response to formal or proposed IRS actions. The IRS should then consider any supporting documentation promptly. If the IRS has objection they should hear from them in a timely manner. If they do not agree with their position, then they should express this promptly, and make sure the taxpayer is aware.
The Right to Appeal an IRS Decision in an Independent Forum
A statutory notice of deficiency is an IRS letter proposing additional tax. Taxpayers who receive this notice and who then timely file a petition with the United States Tax Court may dispute the proposed adjustment before they must pay the tax. Taxpayers are entitled to a fair and impartial appeal of most IRS decisions, including many penalties. They have the right to receive a written response regarding a decision from the IRS Office of Appeals. When taxpayers don’t agree with the IRS’s decisions, they can refer to Publication 5.
The Right to Finality
When payers are in the process of an audit they should know the maximum amount of time they have to challenge the IRS’s position. They should also understand the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Lastly, when the IRS has finished an audit, the taxpayer should be informed.
The Right to Privacy
Taxpayers information should be secure when it is handled by the IRS. They have the right to expect that any IRS inquiry, audit, or enforcement action will comply with the law and be no more intrusive than necessary. Payers can also expect that the IRS will respect all due process rights, including search and seizure protections, and provide a collection due process hearing when appropriate.
The Right to Confidentiality
Taxpayers can expect that any information they provide to the IRS will not be shared with outside parties, unless authorized by the taxpayer or by law. They also have the right to expect appropriate action will be taken against employees, return preparers and others who wrongfully use or disclose taxpayer return information.
The Right to Retain Representation
All taxpayers have the ability to retain an authorized representative of their choice to represent them in their dealings with the IRS. If they retain representation, they don’t have to attend with their representative, unless the IRS formally summons them to appear. Any attorney, CPA, enrolled agent, enrolled actuary or other person permitted to represent a taxpayer before the IRS, who’s not disbarred or suspended from practice before the IRS, may submit a written power of attorney to represent. Taxpayers can also seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation. If their income is below a certain level they may ask an LITC to represent them in their tax dispute before the IRS or a federal court. Help from an LITC can be free or for a minimal fee. Many LITCs offer services in languages other than English.
The Right to a Fair and Just Tax System
Taxpayers can expect the tax system to consider facts and circumstances that might affect their tax liabilities, ability to pay or ability to provide information in a timely manner. Taxpayers experiencing significant hardships because of IRS action or inaction may be eligible for assistance from TAS. Payment plans may be organized with the IRS if needed. The IRS cannot seize all of someone’s wages to collect their unpaid tax. A portion is exempt from levy to allow the taxpayer to pay basic living expenses. After the statutory period of limitations has expired or is erroneously assessed, the IRS has the authority to decrease an excessive unpaid portion of any tax or liability assessed.