The tax code is complicated, and can even be overwhelming, especially if you run into problems with your taxes. The IRS unquestionably has greater knowledge of the tax code, so it is important to be aware of your rights as a taxpayer.
Congress, in the last two decades, passed the Taxpayer Bill of Rights. This legislation sets out all of the rights and remedies available to a taxpayer when dealing with the IRS. The IRS has also tried to simplify these rights in Publication 1, “Your Rights as a Taxpayer.”
1. The Right to Privacy and Confidentiality
The IRS will not disclose your information to third parties except as authorized by law. For a designated representation to contact the IRS on your behalf, Form 2848 Power of Attorney, must be on file before an IRS agent can disclose any confidential information.
The IRS is obligated to follow proper debt collection procedures, set forth in the Fair Debt Collection Act, just like any other creditor. You have a right to know why the IRS is asking for information, how it will be used, and what will happen if you choose not to provide the requested information.
2. The Right to Professional and Courteous Service
The IRS employees are required to treat you in a professional and courteous manner. This applies even if you have not filed your taxes or owe the IRS money. If you believe that the employee was not respectful, you should request to speak with the employee’s supervisor. If the supervisor does not provide an adequate response, you can write directly to the IRS director in your area.
3. The Right to Representation
You may represent yourself before the IRS, or you may elect to have someone else represent your interests on your behalf. The person you hire must be a tax professional, who is certified to practice before the IRS. These individuals consist of attorneys, certified public accountants (CPA’s), or enrolled agents.
There are significant benefits to hiring a professional to act of your behalf. These individuals have greater knowledge of the tax code than the average citizen, and are professionally trained to handle tax issues. If you are faced with a tax problem, it is important to exercise your right to representation.
4. The Right to Pay only the Correct Amount of Tax Owed
You have an obligation as a taxpayer to file your return on time and pay the amount of tax owed in full. If you are unable to pay all of the tax when it is due, the IRS can work with you to place you on a payment plan.
However, you are only responsible for paying the correct amount due under the law. If you later find an error or find out that you missed out on a credit or deduction, you are given three years to amend your return to make sure that it is accurate. In the event that your return is the subject of an audit, the IRS can make changes that require you to pay more tax, but can also issue you a refund if you over paid. The goal of the audit is to make sure the you, the taxpayer, is paid the full amount owed to the IRS, and nothing more.
Lastly, if you are assessed penalties and interest for filing your return late or for not paying your taxes on time, the IRS is willing to remove those penalties and interest charges if certain circumstances were the cause of the issue. For example, if you were the victim of a natural disasters and severe medical conditions, the IRS may remove any penalties inequitably assigned to your account.
5. The Right to Assistance for Unresolved Tax Problems
While you have a right to professional representation, hiring a professional is often expensive. The Taxpayer Advocate is an independent division within the IRS, established to assist taxpayers with complex or unresolved issues free of charge.
To find a Taxpayer Advocate office near you, follow the link below:
6. The Right to Appeal and Judicial Review
If you do not agree with the calculation or assessment of taxes owed, you have the right to appeal the decision through the Office of Appeals within the IRS. If you are unable to reach an agreement with the Office of Appeals, you may be able to take your case to Tax Court, Federal District Court, or the Court of Federal Claims.
An appeals matter at the court level is conducted similar to any other type of trial, where you will be required to submit proof that you kept adequate records, cooperated with the IRS, and also meet other specific criteria. If you wish to utilize your appeal rights in court, it is highly suggested that you hire professional representation to properly handle your matter.
The best thing you can do if you find yourself faced with a tax problem is to know your rights and consult a licensed tax professional near you.
Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.