If you earn income, you already know that you must pay taxes to the IRS. Filing and paying taxes is such a critical issue that taxpayers spend billions of dollars and countless hours each year to make sure tax returns are prepared accurately. With so much emphasis on our tax liabilities, it can be easy to forget that we have IRS rights too.
The Taxpayer Bill of Rights was created to ensure we know what to expect when dealing with the IRS.
What Is the IRS Taxpayer Bill of Rights?
Although the IRS is responsible for enforcing the tax code and ensuring we each pay our fair share of taxes each year, the department also has guidelines it must follow to protect taxpayers. The Taxpayer Bill of Rights lays out these guidelines clearly, giving us an overview of our IRS rights and the IRS’s commitment to taxpayers when resolving a tax issue. It defines our expectations when working with the IRS and the recourse we have at our disposal if one of these IRS rights is infringed upon.
How Many IRS Rights are Included in the Taxpayer Bill of Rights?
There are ten taxpayer rights that make up the Taxpayer Bill of Rights. These IRS rights cover a variety of tax-related situations that require discretion, from IRS correspondence and tax obligations to confidentiality and corrective action.
What Are Your IRS Rights as a Taxpayer?
The Taxpayer Bill of Rights was adopted in 2014 as proposed by Nina Olson, a former National Taxpayer Advocate. The following ten IRS rights are granted to every American taxpayer:
1. The Right to Be Informed
Tax laws can be complex, and it is important for taxpayers to know what is needed to comply and avoid penalties. For this reason, the IRS is obligated to clearly display procedures and tax laws on every printed item, including tax forms, correspondence, instructions, notices, and publications. Any decision made by the IRS must be clearly communicated and outcomes must be explained in detail.
A few examples of this are:
- Any amounts owed must be disclosed and justified
- Withheld refunds must include reasoning
- Payment plans require an annual statement that shows payments and balances
2. The Right to Quality Service
Taxpayers who have questions or need assistance have the right to contact an IRS representative and expect a professional and courteous interaction. Information should be delivered clearly and escalation to a supervisor must be an option when needed. Calls from the IRS should be between the hours of 8 AM and 9 PM and calls to your place of business should be avoided if your employer forbids such contact.
3. The Right to Pay No More Than the Correct Amount of Tax
As a taxpayer, you should not have to pay more than what you legally owe in taxes. The IRS is required to address any suspected errors and all tax payments must be applied properly to avoid unnecessary penalties and fees. Accidental overpayments, errors in tax bills, and interest caused by IRS delays can be appealed within a certain period and the IRS must review the suspected issue. Refunds and adjustments must be made if an investigation into the complaint shows validity.
4. The Right to Challenge the IRS’s Position and Be Heard
Taxpayers have the right to object to IRS decisions and provide documentation as evidence that an outcome should be changed. The IRS is obligated to investigate these claims, provided they are filed by the response deadline, and must consider the evidence fairly. Final decisions must be communicated clearly.
A few examples of possible challenges include:
- The IRS claims your return has an error that results in you having to pay additional taxes. You have 60 days to respond if you disagree with this assessment and begin the process of proving your accuracy.
- IRS proposals to file a federal tax lien can be appealed before action is taken.
- A notice of tax increase resulting from an audit can be challenged through the U.S. Tax Court before making payments.
5. The Right to Appeal an IRS Decision in an Independent Forum
The IRS Commissioner ensures there is an office, known as the IRS Office of Appeals, that independently reviews appeals. This office will review the issue impartially, without input from the IRS beyond information gathering. Not only do taxpayers have the right to have their cases heard by this independent office, but they also have the right to take many of their tax cases to court for resolution.
6. The Right to Finality
Timelines are an important aspect of tax-related issues and taxpayers should have a clear idea of the maximum time allowed for challenging a decision or for the IRS to audit their taxes or collect back taxes.
A few of these set timelines include:
- The IRS has three years to assess additional taxes from the date your return is filed.
- Unpaid taxes can be collected for ten years from the assessment date.
- Refund claims for overpayment must be submitted within three years from the original return’s filing date.
7. The Right to Privacy
Any action taken by the IRS must be compliant with current privacy laws and be minimally invasive when executing. Due process rights, including search and seizures, must be respected and audit investigations are limited without evidence of additional income. The IRS is limited in the amount of wages it can seize to pay taxes owed.
8. The Right to Confidentiality
The IRS has a duty to protect your information and must take swift action against anyone who uses that information outside the scope of its intended purpose. Only the taxpayer and certain legal orders can justify the release of confidential information shared with the IRS. Communications with the IRS and those who professionally handle your tax preparation fall under the same confidentiality rules as an attorney.
Examples of confidential communications include:
- Tax advice
- Noncriminal tax matters brought before the IRS
- Noncriminal tax matters brought before the federal court
- Any communications that would normally be confidential if made with an attorney
9. The Right to Retain Representation
When dealing with the IRS, taxpayers have the right to retain an attorney to represent them. Those who are unable to afford representation have the right to contact the Low Income Taxpayer Clinic (LITC) for assistance. Representation can also be an enrolled agent or certified public accountant.
10. The Right to a Fair and Just Tax System
Taxpayer rights include the expectation that the IRS will fairly consider their inability to pay tax liabilities or submit information in a timely fashion due to uncontrolled circumstances. Taxpayer Advocate Services are available to assist those who are experiencing hardship or to help resolve a tax issue that is being delayed through the IRS.
A few of the provisions within this IRS right include:
- Limits on wage garnishment
- Payment plan options
- Access to an advocate service or Low Income Taxpayer Clinic
- Use of guidelines on basic costs of living to determine reasonable payments
- Reduction of excessive or illegal interest, or a portion of unpaid taxes when necessary
How Can Wiztax Help?
The rights above provide you with many options when it comes to back tax help and tax relief. We can tell you exactly what you qualify for and what can be done to resolve your IRS tax issues. Call us today at (866) 568-4593 to learn more about how we can help, or start here to take our free online evaluation.
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