Keith Jones, CPA Newsletter
Empowering Taxpayers: An In-Depth Look at the Taxpayer Bill of Rights
Dealing with the IRS can be stressful due to complicated forms and confusing information.
To help make things fair and clear for everyone, the IRS created the Taxpayer Bill of Rights (TBOR) in 2014.
This list of ten rights is designed to protect you and ensure you are treated fairly when handling tax matters.
These rights were already part of various tax laws and policies, but now they are all in one place, making them easier to find and understand.
Thus, sit tight because we'll explain each of these rights in simple terms, so you know what protections and responsibilities you have as a taxpayer.
Taxpayer Bill of Rights
- The Right to Be Informed
You have the right to know what's going on with your tax matters.
The IRS is obligated to provide clear explanations of the tax laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence.
This ensures that you can understand how to comply with the tax laws. If you ever receive communication from the IRS, it should clearly explain why you’re being contacted and what you need to do next.
- The Right to Quality Service
When dealing with the IRS, you are entitled to prompt, courteous, and professional assistance.
This means that you should be able to expect timely responses to your questions and issues.
The IRS must also provide clear and easy-to-understand information.
If you feel you have not received quality service, you can file a complaint and expect it to be handled properly.
- The Right to Pay No More Than the Correct Amount of Tax
You are only required to pay the amount of tax that is legally due.
The IRS must apply all tax payments correctly.
If you believe there’s an error, you can ask for a correction.
For instance, if you've been incorrectly charged interest or penalties, you have the right to request that the IRS correct these mistakes.
- The Right to Challenge the IRS’s Position and Be Heard
If you disagree with the IRS, you have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions.
The IRS is required to consider your objections and documentation promptly and fairly.
This right ensures that taxpayers can dispute IRS decisions without fear of retaliation.
- The Right to Appeal an IRS Decision in an Independent Forum
You can appeal most IRS decisions to an independent forum, such as the IRS Office of Appeals, which is separate from the IRS office taking the action you disagree with.
If you are unsatisfied with the appeal, you can take your case to court.
This process ensures that disputes are reviewed objectively.
- The Right to Finality
This right means you should know the maximum amount of time you have to challenge the IRS’s position, as well as the amount of time the IRS has to audit a particular tax year or to collect a tax debt.
Knowing these time limits can help you plan and manage your tax responsibilities more effectively.
- The Right to Privacy
The IRS must comply with the law and respect all due process rights, including search and seizure protections, when conducting an examination or collection.
This right ensures that any IRS inquiry, examination, or enforcement action will be no more intrusive than necessary and will respect all due process rights.
- The Right to Confidentiality
Your tax information is confidential.
Unless you or the law authorize it, the IRS is not permitted to disclose it.
This right ensures that your personal and financial information remains private and protected.
Unauthorized disclosure can result in severe penalties for those responsible.
- The Right to Retain Representation
You can retain an authorized representative of your choice to represent you in dealing with the IRS.
This could be an attorney, a certified public accountant (CPA), or an enrolled agent. If you cannot afford representation, you have the right to seek assistance from a low-income tax clinic.
- The Right to a Fair and Just Tax System
This right ensures that the tax system considers facts and circumstances that might affect your ability to pay or provide information promptly.
For example, if you’re facing significant hardship, the IRS is obligated to consider your situation.
This right also includes the ability to seek assistance from the Taxpayer Advocate Service, an independent organization within the IRS that helps taxpayers resolve problems with the IRS and ensure that taxpayers are treated fairly.
Practical Applications of the Taxpayer Bill of Rights Understanding your rights as a taxpayer is crucial, but knowing how to apply them can make a significant difference.
Here are some practical scenarios where these rights come into play:
Filing Your Taxes When you file your taxes, the right to be informed and the right to quality service ensure that the IRS provides clear instructions and resources.
If you have questions, you can expect courteous and helpful responses.
Receiving an IRS Notice If you receive a notice from the IRS, it should clearly explain why you’re being contacted, which ties back to the right to be informed.
If you believe the notice is incorrect, the right to challenge the IRS’s position and be heard allows you to dispute the notice.
Facing an Audit During an audit, the right to privacy and the right to confidentiality ensure that the IRS respects your personal and financial information.
You can also exercise the right to retain representation to help navigate the audit process.
Disputing a Decision If you disagree with an IRS decision, you can appeal to an independent forum, leveraging your right to appeal an IRS decision in an independent forum.
If the dispute affects your financial stability, the right to a fair and just tax system ensures that the IRS considers your circumstances.
Tips for Exercising Your Rights
Understanding the effective use of your rights can significantly impact your situation.
Here are some practical tips to help you exercise your taxpayer rights:
Stay Informed: Regularly check the IRS website and other reliable sources for updates and information about your rights.
Document Everything: Keep detailed records of all your tax documents, correspondence with the IRS, and any actions you take.
Seek Professional Help: If you’re unsure about your situation, consider consulting a tax professional. They can provide guidance and represent you if needed.
Utilize IRS Resources: Take advantage of the resources offered by the IRS, such as publications, forms, and the Taxpayer Advocate Service.
Know Your Deadlines: Be aware of the time limits for filing returns, making payments, and disputing IRS decisions to ensure you don’t miss any critical deadlines.
Bottom Line The Taxpayer Bill of Rights is a powerful tool that ensures you are treated fairly and with respect throughout the tax process.
By understanding and exercising these rights, you can confidently manage your tax responsibilities.
Remember, the IRS is there to enforce the law, but they are also there to help you understand and meet your tax obligations.
Knowing your rights is the first step toward a fair and just tax experience.
End your tax worries now! Book your discovery call with Keith L. Jones, CPA—your first step towards effective tax relief.
Let's solve your tax issues together and secure your financial peace of mind. Don't wait; schedule today and regain control!
Keith L. Jones, CPA TheCPATaxProblemSolver