Have Tax Issues? Know Your Taxpayer Rights

When you’re dealing with an IRS audit or threatening letters and collections based on outstanding tax liability, it’s easy to feel powerless. What can you do when a federal agency has it out for you?

One of the great things about living in the United States is that our government recognizes that people have certain rights that can never be taken away. Our Constitution describes these rights in the Bill of Rights, which are the first 10 amendments to the Constitution. So, no matter how bad your tax situation seems, no matter the amount of tax debt, and no matter how aggressive the IRS’ tactics feel, remember: you have rights!

Your strategies to deal with your tax problems should begin with that knowledge. In this article, we’ll outline some of your key legal rights when you’re dealing with a tax issue.

The Taxpayer Bill of Rights

Did you know that the IRS maintains a taxpayers’ “Bill of Rights”? Congress created the Bill of Rights in the U.S. Constitution in 1791. On the other hand, the IRS implemented its bill of rights in… 2014. (For reference, income tax has been around in the United States since 1861.) So, yes, the IRS took plenty of time to recognize the rights of individual taxpayers — but better late than never.

Just like the Constitution’s Bill of Rights, the Taxpayer Bill of Rights describes 10 rights taxpayers have that the IRS should never violate. Let’s go over these rights and figure out what they mean.

1. The Right to Be Informed

You have the right to clear explanations of all relevant tax laws and IRS procedures, and you have the right to know exactly what you need to do to comply with the law. You also have the right to receive notice of any IRS decisions and get an explanation of the outcome.

Unfortunately, a “clear explanation” of tax law might not help you very much. The United States Tax Code is so complicated that only specially trained tax professionals can understand it, no matter how much an IRS agent tries to simplify the language.

2. The Right to Quality Service

This is where we start to see that some parts of the Taxpayer Bill of Rights are more about helping the IRS’ public image. The IRS says every taxpayer has the right to receive “prompt, courteous, and professional assistance in their dealings with the IRS.”

However, we can tell you from decades of experience that many taxpayers experience service no one would describe as “quality.” IRS agents sometimes harass, threaten, bully, and misinform taxpayers. Hopefully, this will change over time.

3. The Right to Pay No More Than the Correct Amount of Tax

You have the right to pay only the amount of tax you legally owe, and the IRS must apply all your tax payments properly. However, don’t expect the IRS to spot its own mistakes. You’ll want to keep track of how much you’ve paid and how the IRS has applied your payments so you can verify that everything is correct.

4. The Right to Challenge the IRS’ Position and Be Heard

Far too many people receive a decision from the IRS and take it as the final word. When the IRS says you owe a certain amount of taxes and penalties, you have the right to object and provide additional evidence. However, the IRS can and does make mistakes.

If you’re not sure whether the IRS correctly calculated the taxes you owe (or if you are sure they got it wrong), you should contact an experienced tax representative as soon as possible. You can challenge the IRS and succeed, but the process will be much easier with the help of a professional.

5. The Right to Appeal an IRS Decision in an Independent Forum

This right closely relates to your right to challenge the IRS’ decisions. You also have the right to a fair, impartial administrative appeal of most IRS decisions, including many penalties. In most cases, you can take your case to court, and you should do so if you and your tax attorney feel that the IRS is wrong and you have a good chance to win.

6. The Right to Finality

You have the right to know when the IRS has finished an audit, and you have the right to know all deadlines and timelines for challenging an IRS decision.

7. The Right to Privacy

The IRS must observe the law and respect your rights throughout any audit or enforcement action. An audit or investigation shouldn’t intrude on your privacy any more than necessary for the IRS to gather the relevant information.

8. The Right to Confidentiality

The IRS can’t disclose your confidential tax information unless you authorize them. Any IRS employee who violates taxpayer confidentiality is subject to discipline.

9. The Right to Retain Representation

This critical right helps you make sure all the other rights are protected. You always have the right to retain an experienced tax lawyer or another authorized representative for any dealings with the IRS.

10. The Right to a Fair and Just Tax System

This is a vague statement that’s difficult to apply. Any experienced tax professional will tell you that our current tax system is not always fair and just, even though it should be. Many taxpayers end up with worse outcomes than they should simply because they don’t have anyone to educate them, protect them, and look out for their rights.

Don’t Expect the IRS to Protect Your Rights

While knowing the Taxpayer Bill of Rights can help you during an audit or collections process, you can’t rely on IRS agents to watch out for you and respect your rights. The Taxpayer Bill of Rights is a relatively new concept, and so far, it hasn’t resulted in significant changes to the way the IRS operates. Some revenue officers still engage in bullying, threats, and harassment against taxpayers, no matter what the IRS says.

The best way to preserve your rights, fight back against unreasonable behavior from IRS agents, and resolve your tax issues is to work with an experienced tax attorney. A good tax lawyer will not only know your rights but use their legal training and experience to make sure the IRS respects those rights at all times. Your attorney will also handle the work required to resolve your tax issues, which means communicating with the IRS, finding the best solution for your unique situation, and negotiating to try and reduce your liability.

RELATED: Why Hire a Tax Attorney?

Need Help With a Tax Issue? Contact S.H. Block Tax Services

If you have any questions or concerns about an outstanding tax debt or any other tax matters, please contact the experienced tax lawyers at S.H. Block Tax Services. Our skilled attorneys have experience working with the IRS to resolve tax issues and protect taxpayers’ rights.

Schedule your free consultation today by calling (410) 872-8376 or completing the brief contact form on this page.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject. Please read our full disclaimer here.