Back in the day the idea that taxpayers had any rights where the IRS was concerned would have been laughable. But in recent years, the collection arm of the Treasury Department has developed a new attitude of cooperation and willingness to work with taxpayers rather than intimidating them into compliance. The recent issuing of a Taxpayers’ Bill of Rights by the IRS is designed to provide legal assurances to taxpayers as they navigate the complexities of the US Tax Code.
1. The Right to Be Informed
It is the responsibility of taxpayers to conform to tax laws, but it is their right to have as clear an understanding as possible of those laws. Taxpayers are also entitled to timely information about general changers in the law. The IRS also has a duty to a clear explanation of any actions taken concerning individual taxpayers.
2. The Right to Quality Service
The bad old days of IRS harassment are long gone. Today’s IRS recognizes its responsibility to treat taxpayers with courtesy and respect. Taxpayers also have the right to file a complaint with a supervisor if the IRS fails in meeting this duty.
3. The Right to Pay No More than the Correct Amount of Tax
Taxpayers have the right to employ any and all legitimate means at their disposal to reduce their tax burdens, including credits and deductions. The IRS also has a duty to apply tax payments, credits and deductions properly.
4. The Right to Challenge the IRS’s Position and Be Heard
Taxpayers have the right to raise legitimate disputes and to present documentation to support their positions. The IRS has an obligation to consider documentation from taxpayers in a timely manner, and to provide reasonable explanations for decisions.
5. The Right to Appeal an IRS Decision in an Independent Forum
Taxpayers have the right to file disputes of IRS decisions including penalties, as well as the right to receive written responses to their appeals from the Office of Appeals. Taxpayers also have the right to take their cases to open court if they disagree with decisions made by the Office of Appeals.
6. The Right to Finality
Even though it may seem as though an audit will go on forever, taxpayers have the right to know when an audit is over. They also have the right to know how much time they have to challenge decisions made by the IRS.
7. The Right to Privacy
The right against unreasonable search and seizure does not end when the IRS enters the scene. The IRS must comply with due process in its inquiries, enforcement and examinations. Taxpayers are also entitled to due process hearings about collection actions.
8. The Right to Confidentiality
Taxpayers have the right to reassurance that information collected by the IRS will be disclosed only to authorized agents of the IRS unless they give their consent for disclosure, which is required by law. The IRS has a duty to take proper action against employees and agents of the IRS such as tax preparers who improperly disclose taxpayer information.
9. The Right to Representation
When dealing with the IRS, taxpayers have the right to have a tax professional of their choice provide representation. Further, taxpayers who cannot afford representation have the right to request the services of the Low Income Taxpayer Clinic.
10. The Right to a Fair and Just Tax System
Taxpayers have the right to expect the IRS to consider circumstances and information that have a bearing on their financial obligations as well as the ability of taxpayers to pay what they owe. Taxpayers also have the right to request the services of the Taxpayer Advocate to resolve financial problems or to settle disputes that are not resolved through normal IRS procedures.
The Taxpayers’ Bill of Rights serves as one of the best indicators that the bad old days of the IRS a strictly a vestige of the past. The statement of these rights illustrates the IRS’s present-day emphasis on accountability and transparency. Paying taxes may not be fun, but the process should no longer be torturous – at least for honest taxpayers. For more information about the new IRS Taxpayers Bill of Rights, visit the IRS.gov.