Things to Know about the Taxpayer Bill of Rights
In the summer of 2014, the IRS released a document known as the Taxpayer Bill of Rights. The IRS aggregated all of the rights that taxpayers are afforded under the tax code into this one document so that they could be more easily accessed and referenced. While this information has always been available, releasing the summarized list was a necessary step in informing the public of their rights.
To develop the list, the IRS consulted with the Taxpayer Advocate Service, which is an organization that provides support to taxpayers who believe they are being treated unfairly by the IRS. From these consultations, the IRS discovered that, generally, taxpayers were ignorant of what their rights were – and many were unaware they had rights at all. The Taxpayer Bill of Rights was well-received, and less than two years after its release, Congress wrote the Taxpayer Bill of Rights into the Internal Revenue Code. It is now required that all IRS employees be familiar with the Bill of Rights and act in accordance with the document during their interactions with taxpayers.
The Taxpayer Bill of Rights divided the taxpayers’ rights into 10 broad categories, which we will discuss below.
1. The Right to Be Informed
The first permission afforded to taxpayers is, simply stated, the right to know what it is they need to know. They can expect easy-to-understand forms and instructions, clear-cut notices with explanations as necessary, and the distinct knowledge of where they can go if they need assistance.
2. The Right to Quality Service
Taxpayers can expect courteous and professional assistance from IRS employees and should only be contacted within reasonable hours and with non-threatening language. In all interactions, IRS employees should provide their unique identification number so that taxpayers have a record of who helped them.
3. The Right to Pay No More than the Correct Amount of Tax
Taxpayers will never be expected to pay more than they are legally required to pay, and any errors detected in a notice or letter of adjustment can be rectified within a reasonable time frame.
4. The Right to Challenge the IRS’s Position and Be Heard
Taxpayers are afforded the ability to object to an IRS determination or adjustment. The time period within which taxpayers can contest a deficiency notice will be clearly stated on the correspondence, and if the IRS disagrees with the objection, taxpayers can petition the U.S. Tax Court or ask the Taxpayer Advocate Service to assist them.
5. The Right to Appeal an IRS Decision in an Independent Forum
Taxpayers can challenge IRS decisions in the impartial IRS Office of Appeals, and they will always have the right to take their case to court before paying the tax on the proposed adjustment.
6. The Right to Finality
The Internal Revenue Code lists timelines for when taxpayers can file a refund claim, for when a notice must be addressed, and for when the IRS can audit taxpayers or make adjustments to their accounts. These deadlines will be made clear to the taxpayers on any and all correspondence that they receive. Once those deadlines have passed, taxpayers can be certain that the issues are finalized.
7. The Right to Privacy
The IRS will only act in a way that can guarantee basic privacy to taxpayers. All enforcement actions must comply with the law, and the IRS will not be more intrusive than is necessary. Only relevant information will be collected during an audit.
8. The Right to Confidentiality
Taxpayers can rest assured that the IRS will protect their personal information and uphold their confidences. Additionally, taxpayers can seek criminal prosecution for tax return preparers who disclose their information to inappropriate parties.
9. The Right to Retain Representation
Taxpayers have the right to use a third party to represent them in dealings with the IRS. If they cannot afford representation, they can seek support from an independent Low Income Taxpayer Clinic. Representatives can be anybody, but they are often attorneys, CPAs, or enrolled agents.
10. The Right to a Fair and Just Tax System
When assessing a deficiency, the IRS will consider the taxpayers’ abilities to pay and will work closely with taxpayers to find solutions that are reasonable. They may agree to settle the debt for less than what was owed, or they may agree to enter into a monthly payment plan. All assessments levied on taxpayers will be sensible and will consider their life circumstances.
While the IRS’s Taxpayer Bill of Rights was only recently released, many states have been providing similar documents to their taxpayers for decades. For example, the California Taxpayers’ Bill of Rights was enacted in 1988 and it continues to serve California taxpayers to this day.
If you have a question about your rights as a taxpayer, contact your WNDE tax professional.