Taxpayers Bill of Rights
Monday , August 18, 2014 - 12:54 PM
Did you know that as a taxpayer you have rights? Just as the Constitution protects the rights of its citizens, taxpayers also have rights that must be protected by the IRS. Most taxpayers believe that they do not have any rights when it comes to dealing with the IRS. However, this is not true. Congress has incorporated many rights for taxpayers within the tax code. Knowing and understanding your rights as a taxpayer can help make sure you are treated fairly.
The tax code includes numerous taxpayer rights, but they are scattered throughout the code, making it difficult for people to track and understand. Similar to the U.S. Constitution’s Bill of Rights, the Taxpayer Bill of Rights contains 10 provisions. They are:
1. The Right to Be Informed
2. The Right to Quality Service
3. The Right to Pay No More than the Correct Amount of Tax
4. The Right to Challenge the IRS’s Position and Be Heard
5. The Right to Appeal an IRS Decision in an Independent Forum
6. The Right to Finality
7. The Right to Privacy
8. The Right to Confidentiality
9. The Right to Retain Representation
10. The Right to a Fair and Just Tax System
The IRS must inform the taxpayer of its activities. It cannot assess additional taxes on a return without notifying the taxpayer of its intent to assess additional taxes. The IRS must offer quality service. Quality service means that the IRS has followed the tax code when taking action. Quality service is not equivalent to quick service when dealing with the IRS.
A taxpayer has the right to pay no more than the correct amount of tax due. When a taxpayer receives a notice regarding an error with the tax return (CP2000 Notice), if additional tax is due it is because the return was not correct when submitted. This is often the case when a taxpayer forgets to add a W2 or 1099 to the return.
A taxpayer has the right to challenge the IRS ‘s position and be heard. Just receiving a notice that additional tax is assessed does not mean the taxpayer can’t provide information that would adjust the additional tax. When a taxpayer does not file a return and the IRS has information that the taxpayer should have filed a return a substitute return is filed by the IRS. Usually, this return is based on only the income information the IRS has on hand. The substitute return will be filed as a Single taxpayer with no dependents and the standard deduction. When the taxpayer submits an actual return, the IRS must accept this return as a replacement for the substitute return.
A taxpayer has the right to appeal a decision made by the IRS to an independent and neutral forum. There are times that a taxpayer may not agree with the IRS or feels the information submitted during an audit was not correctly handled by the IRS agent. In this regard, a taxpayer may appeal the decision. Appealing takes the audit or decision out of the hands of the office reviewing the return and places all of the information to an independent area that will review the information without conversing with the original office or agent. This allows the information to be objectively reviewed.
The right to finality allows the taxpayer to know that once a decision is made there is no fear of the issue being raised in a future year. This is similar to the US Constitution’s Fifth Amendment of double jeopardy, in that once a decision is final with the IRS it cannot bring up this issue again in future years.