Posted by Jim McClaflin, EA, NTPI Fellow, CTRC

Fundamentals of the Taxpayer Bill of Rights

Fundamentals of the Taxpayer Bill of Rights

What is the Taxpayer Bill of Rights (TABOR)?

Taxpayer Bill of Rights: TABOR is a broad term that encompasses many concepts and initiatives at the local, state, and federal levels in the United States and other countries.

TABOR sometimes refers to electoral initiatives aimed at limiting the fiscal power of the government.

Specifically, it refers to a law passed by Congress in 1988 and amended in 1996 that specifies how the IRS should handle appeals and costs related to the litigation with taxpayers.

Finally, TABOR can refer to a book adopted by the U.S. Tax Service (IRS) in 2014, which details the rights of American taxpayers.

 

Understanding the Taxpayer Bill of Rights - TABOR

The Taxpayers Bill of Rights: TABOR, first promoted by conservative and libertarian groups in the 1980s, aimed to limit the powers of government to collect taxes. In reality, it was not a bill of rights but rather a referendum to tie tax increases caused by factors such as inflation and population. Colorado voters passed a version of the bill in 1992. The TABOR referendums in Maine, Nebraska, and Oregon were not passed, and TABOR laws do not exist in other states. However, they exist in some counties and towns.


Tabor II Passed by Congress

The TABOR approved by Congress in 1988, renamed TABOR II after the 1996 changes, does not deal with tax rates or increases but guarantees taxpayers fair treatment in audits and evaluations. For example, the law gives the taxpayer between 10 and 21 days to meet payment requirements without incurring interest, depending largely on the amount owed. It limits the ability of the tax administration to impose property lien. And that requires the IRS to prove its case against a taxpayer or reimburse the taxpayer for legal fees, among many other requirements.


 

TABOR in the IRS code

Taxpayers Charter 2014 "The Taxpayer Bill of Rights in the IRC are just that: a book of ten general taxpayer rights. These rights were not new in 2014; rather, TABOR simply collected several rights already in the tax code and collected them into one document. The initiative resulted from the work of the agency's National Taxpayer Advocate, Nina Olson, in response to concerns that the IRS had become insensitive to taxpayers seeking:

 

  • Right to challenge IRS position and to be heard: You have the right to object to formal IRS actions or proposed actions if you believe they have been misapplied or calculated, and you must provide documents to support your position. The IRS is required to properly and promptly review objections and send a prompt response to the taxpayer if they disagree with the request.

  • Right to Confidentiality: You have the right to keep your tax information confidential [between you and the IRS] unless you authorize its disclosure. IRS employees who violate these rules will be subject to appropriate disciplinary action.

  • Right to finality: you have the right to know all of the conditions [maximum time] for challenging IRS positions, IRS collections, and the time window for an audit during a particular fiscal year. You also have the right to know when the IRS completes an audit.

  • Right to Privacy: You have the right to expect all IRS actions related to your account to comply with privacy laws and be as discreet as possible. You should expect these procedures to respect all procedural rights, including protections against search and seizure.

  • The right to a fair and equitable tax system: You have the right to expect the IRS to take into account exceptional circumstances that affect your tax obligations, your ability to pay, or provide the necessary information. You also have the right to receive help from the Taxpayer Defense Service whenever you experience financial difficulties or if the IRS has not adequately resolved your tax problems through its usual channels.

  • The right to challenge a decision of the Internal Revenue Service in an independent forum: You have the right to appeal to the IRS for almost any decision [including specific penalties] and to have a "fair and impartial" hearing by the Appeal Board. You also have the right to receive a written response to a decision of the Board of Appeal or to take your case to court.

  • The right to information: you have the right to know everything in order to comply with tax laws. You have the right to a clear and detailed explanation of IRS rules and procedures in all forms, instructions, publications, notices, and correspondence. In addition, you have the right to be notified by the IRS whenever it makes decisions regarding your accounts, and you also need clear explanations of the results.

  • The right to pay at least the correct amount of tax: you have the right to pay only the amount of tax legally due, including accrued interest and penalties. The IRS is also required to apply for your tax payment properly.

  • The Right to Quality Service: You have the right to get prompt, polite, and professional assistance in your communications with the IRS. Again, if you're not getting great service, you can talk to an IRS supervisor. If the conversation you are having is not clear and easy to understand, ask to speak to a supervisor.

  • The right to retain representation: you don't have to deal with the IRS alone. You have the right to have an "authorized official" (such as a lawyer, etc.) of your choice to represent you before the IRS and to obtain assistance from a low-income taxpayer clinic if you can't afford a qualified representative.


FOR MORE INFORMATION ON HOW JIM McCLAFLIN, EA, NTPI FELLOW CAN BEST HELP YOU WITH YOUR TAX FILING NEEDS, PLEASE CLICK THE BLUE TAB ON THIS PAGE.


THANKS FOR VISITING.

Jim McClaflin, EA, NTPI Fellow, CTRC
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