You have taxpayer rights if you are desperately waiting on a refund, trying to get the IRS to correct a tax calculation issue, are confused about how to report your cash tips, or have any other problem with the Internal Revenue Service.
The United States federal government is currently more than $34 trillion in debt. Uncle Sam is not perfect. He makes mistakes too.
The tax code and filing process can be very confusing. If you are feeling bothered by the federal tax system, you are not alone. According to a study from the Pew Research Center, about half of Americans (53%) now say the complexity of the federal tax system bothers them a lot.
The IRS Taxpayer Bill of Rights serves as a beacon of protection, ensuring that taxpayers are treated fairly and justly throughout the tax process.
These rights delineate the responsibilities of the IRS and safeguard the interests of taxpayers.
In this blog post, we will explore each of the tenets of the IRS Taxpayer Bill of Rights, so you can come armed with information and get your issue resolved.
#1 The Right to Be Informed
At the core of the IRS Taxpayer Bill of Rights is the fundamental right to be informed. As the IRS explains, taxpayers have the right to know what they need to do to comply with the tax laws. Taxpayers have the right to receive clear, concise, and accurate information on all tax forms, instructions, publications, notices, and correspondence.
This includes explanations of IRS decisions, notices, and correspondence, ensuring that taxpayers can comprehend and address any issues that may arise.
The right to be informed empowers taxpayers to make smart decisions regarding their tax affairs, thereby promoting transparency and accountability within the tax system.
#2 Quality Service
Taxpayer rights include prompt, courteous, and professional assistance from the IRS. Quality service encompasses various aspects, including accessibility, responsiveness, and accuracy.
Whether seeking guidance on tax matters, resolving disputes, or accessing tax forms and resources, taxpayers should receive timely and accurate assistance from the IRS. Taxpayer rights include being spoken to in a way they can easily understand and receive clear and easily understandable communications from the IRS.
You also have the right to speak to a supervisor about inadequate service. You can tell the IRS representative, “I would like to speak to your supervisor!” That is your right.
#3 Pay No More Than the Correct Amount of Tax
One of the fundamental principles of taxation is that taxpayers should only be liable for the correct amount of tax owed under the law.
The IRS Taxpayer Bill of Rights guarantees taxpayers the right to pay no more than the correct amount of tax, ensuring that they are not unduly burdened by erroneous assessments or penalties.
The IRS should also apply all tax payments properly.
This right underscores the importance of accurate tax reporting and compliance, while also providing avenues for taxpayers to challenge and rectify any discrepancies in their tax liabilities.
#4 Challenge the IRS’ Position and Be Heard
Taxpayer rights include the right to challenge the IRS’ position and present their case before the agency.
This right encompasses various dispute resolution mechanisms, including administrative appeals, mediation, and litigation. By affording taxpayers the opportunity to contest IRS determinations and provide additional information or evidence, this right ensures a fair and impartial review of tax matters. Moreover, the right to be heard underscores the principle of due process, guaranteeing that taxpayers have a voice in the resolution of their tax disputes.
The IRS explains what you should expect when challenging the agency’s position:
- If the IRS notifies you that your tax return has a math or clerical error, you have 60 days to tell the IRS that you disagree. You should provide photocopies of any records that may help correct the error. In addition, you may call the number listed on your notice or bill for help. If the IRS agrees with your position, it will make the necessary adjustment to your account and send you a corrected notice.
- If the IRS does not adopt your position, it will send a notice proposing a tax adjustment (known as a statutory notice of deficiency). The statutory notice of deficiency gives you the right to challenge the proposed adjustment in the United States Tax Court before paying it. To do this, you need to file a petition within 90 days of the date of the notice (150 days if the notice is addressed to you outside the United States). Here’s more info on the United States Tax Court on the taxpayer information page.
- If you submit documentation or raise objections during a return examination (or audit), and the IRS does not agree with your position, it will issue you a statutory notice of deficiency. This notice will explain why the IRS is increasing your tax, which gives you the right to petition the U.S. Tax Court prior to paying the tax.
- When the IRS notifies you of plans to levy your bank account or other property, you’ll generally have an opportunity to request a hearing before the Office of Appeals. Also, you’ll generally have an opportunity to appeal the proposed or actual filing of a notice of federal tax lien.
#5 The Right to Appeal an IRS Decision in an Independent Forum
In cases where taxpayers disagree with the outcome of an IRS examination or audit, they have the right to appeal the decision in an independent forum. Taxpayers generally have the right to take their cases to court.
The IRS Office of Appeals serves as a neutral mediator, facilitating the resolution of tax disputes through alternative dispute resolution techniques. The IRS Commissioner must ensure that there is an independent IRS Office of Appeals.
The independent forum provides taxpayers with an opportunity to present their case before an impartial decision-maker, thereby ensuring a fair and impartial resolution of their tax issues.
By offering recourse to an independent appeals process, this right promotes accountability and transparency within the tax administration.
If you have decided to file an appeal, you may need one of the forms listed in preparing a request for appeal.
#6 Finality
Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position. Taxpayer rights also include the right to know the maximum amount of time they have to audit a particular tax year or collect a tax debt.
In general, the IRS has three years from the date you file your return to assess any additional tax for that tax year.
The IRS generally has 10 years from the assessment date to collect unpaid taxes from you. The IRS can’t extend this 10-year period, unless other steps happen. You can agree to extend the period as part of an installment agreement to pay your tax debt or the IRS can obtain a court judgment.
Do you want to challenge a statutory notice of deficiency in Tax Court? To do so, you must file your petition within 90 days of the date of the statutory notice (150 days if the taxpayer’s address on the notice is outside the United States or if the taxpayer is out of the country at the time the notice is mailed).
Taxpayer rights include knowing when the IRS has finished an audit.
Finality ensures that taxpayers can rely on the outcome of their tax proceedings and move forward with certainty regarding their tax liabilities.
This right provides closure to tax disputes and promotes compliance by establishing clear boundaries and expectations for both taxpayers and the IRS.
#7 Privacy
An IRS inquiry should be no more intrusive than necessary. All due process rights should be respected.
There are limits on what the IRS can levy from you to collect owed tax. A portion of your wages are protected from seizure.
The IRS can’t seize your primary home without court approval. It must show there is no other reasonable way to collect the debt.
The IRS can’t take certain personal items, such as necessary schoolbooks, clothing, undelivered mail and certain amounts of furniture and household items.
If there is no reasonable sign that you have unreported income, the IRS cannot go poking around about your lifestyle during an audit.
#8 Confidentiality Is One of Your Taxpayer Rights
Confidentiality ensures that taxpayer information is safeguarded from unauthorized access or disclosure. Any information a taxpayer provides to the IRS should not be disclosed unless authorized by the taxpayer or by law.
Taxpayers have the right to expect that their tax information will be handled with the utmost discretion and protected from misuse or exploitation. If employees, return preparers, or others wrongfully use or disclose taxpayer return information, taxpayer rights include that appropriate action will be taken against those people.
By upholding principles of confidentiality, the IRS demonstrates its commitment to protecting taxpayer rights and promoting trust and integrity in the tax system.
#9 Retain Representation
Taxpayers have the right to retain representation to assist them in their dealings with the IRS. Whether seeking guidance on tax matters, negotiating settlements, or representing them in administrative or legal proceedings, taxpayers have the right to seek professional assistance from qualified representatives, such as attorneys, accountants, or enrolled agents.
If a taxpayer cannot afford representation, they have the right to seek assistance from a Low Income Taxpayer Clinic.
This right ensures that taxpayers have access to the expertise and resources necessary to navigate complex tax issues and defend their rights effectively. By empowering taxpayers to retain representation, the IRS promotes fairness and equity in the tax administration process.
#10 A Fair and Just Tax System
Ultimately, the IRS Taxpayer Bill of Rights seeks to uphold the principles of fairness and justice within the tax system. Taxpayers have the right to expect that they will be treated fairly and impartially by the IRS, regardless of their financial status, background, or circumstances.
This includes fair and equitable enforcement of tax laws, equitable distribution of tax burdens, and equitable resolution of tax disputes. By promoting a fair and just tax system, the IRS fosters public trust and confidence in the integrity of the tax administration process, thereby encouraging voluntary compliance and participation in the tax system.
What Now?
You have taxpayer rights. If you think there is a discrepancy regarding your taxes, you are entitled to engage in the process to dispute that, or anything else you may think is wrong.
Just because the IRS says something, doesn’t mean it is absolutely final until you have gone through due process and exercised your rights.
When you know your rights, you come to a dispute informed with facts.
As taxpayers, it is crucial to understand and assert our rights. We need to hold the IRS accountable to the highest standards of fairness and justice in the administration of our nation’s tax laws.
