Posted by Karen Munoz, EA

Your Rights as a Taxpayer

Your Rights as a Taxpayer

Audits, collections, taxes, and fees - these conditions can sow fear in taxpayers' hearts during tax season.

You may be concerned that an error in your tax return could result in serious consequences, but the IRS strives to be fair about taxes. The Taxpayer Bill of Rights describes your rights as a taxpayer and how the IRS conducts audits, hears appeals, collects taxes, and issues refunds.

Let's take a look at the Taxpayer Bill of Rights and some of the more common situations where you may need to understand and apply your rights as a taxpayer.


What is the Taxpayer Bill of Rights?

The IRS first passed a 10 Basic Taxpayer Rights bill in 2014. A year later, Congress incorporated these rights into the Federal Revenue Code, the basis of federal tax law. Since then, the IRS has worked to educate taxpayers about the Taxpayer Bill of Rights and continually shares the rights with its employees.

Let's go over it quickly.

  • Right of Intent: This right ensures that you know and understand how long you have to dispute an IRS position and understand an IRS audit's timing.

  • Right to be represented: Just as you have the right to be represented by a law enforcement lawyer, you have the right to have someone (for example, a lawyer, a chartered accountant, or a registered agent) represents you in your dealings with the IRS. If you can't pay someone, the IRS should let you know that you can get help from a low-income taxpayer clinic. And if you pay for someone to represent you in disagreements with the IRS and win in court, you can recover some of the costs.

  • Right to Confidentiality: This right requires that the IRS be as discreet as possible when conducting an investigation, review, or enforcement. The IRS must also follow the proper processes, including protections against searches and seizures. This means that the IRS cannot seize certain personal effects (such as clothing or undelivered mail) or seize your home without first obtaining court approval and proving that there are no other means of collecting the tax due. 

  • The right not to pay more than the correct amount of tax: As a responsible taxpayer, you may be prepared to pay your fair share, but not more. This law says you shouldn't pay more than you really should. For example, if the IRS decides that you owe additional taxes, it can challenge your tax court assessment without paying the additional tax first. However, remember that deadlines apply, and you have to have your case heard in the tax court within those limits.

  • The Right to a Just and Fair Tax System: This right essentially ensures that you are not just a number or tax account when it comes to the IRS. This means that the IRS must consider all of the circumstances in your life, including factors such as your ability to pay or provide timely information, your mental and physical health, and any financial difficulties you are having. This right prohibits the IRS from seizing your entire salary if you have tax debts; it must leave you enough to cover your daily living expenses.

  • The right to be informed: Ignorance of the law may not get you into trouble if you break tax laws. But having access to information on what to do to comply with tax laws can help you avoid problems. This right is intended to ensure that you have the information you need to be a legal taxpayer and information about IRS rulings and your tax account results.

  • The right to challenge an IRS Decision in an independent forum: The right to challenge an IRS decision extends beyond service. This right ensures that you can challenge an IRS decision with an independent IRS appeals office outside of the IRS that first reviewed your case. In some cases, the IRS Appeal Board has full authority to resolve your case, and you can challenge an IRS decision in court.

  • The right to dispute the IRS position and to be heard: If the IRS takes action against you or informs you that it intends to take action against you, you have the right to challenge and plead your case with documents to support your disagreement. The IRS should review your objection as long as it is timely, prompt, correct, and explain in writing if it decides you still owe more tax.

  • The Right to Quality Service: It may seem that customer service is not what it used to be in many industries, but this right requires that IRS employees treat you with courtesy, promptness, and professionalism. . This means that they need to speak to you in a way that you can understand and be reasonable where and when they contact you. For example, they don't have to call you before 8 a.m. or after 9:00 p.m. or contact you at work if they know your employer does not allow personal calls.

  • Your right to privacy: Unless you or the law allows it, the IRS cannot share your tax data with third parties. This right also pertains to your communication with tax preparers, who may face criminal and penal fines if they disclose or misuse your information for any purpose other than tax return preparation unless authorized by the taxpayer or the law. This right allows confidential communications between you and any tax professional licensed to practice with the IRS if you have hired someone to represent you.


What is the taxpayer's advocate service?

The Taxpayer Advocate Service is an independent IRS organization. TAS helps taxpayers resolve tax issues with the IRS and makes sure they are treated fairly and know and understand their rights. 


Bottom Line

The Taxpayer Bill of Rights ensures that American taxpayers are not helpless in the face of the IRS. That being said, the IRS can ask you to pay taxes if you can, and if you can't, collect fines, penalties, and taxes, or even confiscate your property and sell it.

To get the most out of taxpayer rights, it's important to always be proactive and responsive to the IRS. Demonstrating to the IRS that you are willing to work with them can encourage the agency and its representatives to be more than willing to work with you to resolve any tax issues you may have.


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Karen Munoz, EA
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