Every taxpayer has a set of fundamental rights. The “Taxpayer Bill of Rights” takes the many existing rights in the tax code and groups them into ten categories. You should be aware of these rights when you interact with the IRS.
Publication 1, Your Rights as a Taxpayer, highlights a list of your rights and the agency’s obligations to protect them. Here is a summary of the first four of ten Taxpayer Bill of Rights:
- The Right to Be Informed. Taxpayers have the right to know what is required to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices and correspondence. They have the right to know about IRS decisions affecting their accounts and clear explanations of the outcomes.
- The Right to Quality Service. Taxpayers have the right to receive prompt, courteous and professional assistance in their dealings with the IRS and the freedom to speak to a supervisor about inadequate service. Communications from the IRS should be clear and easy to understand.
- The Right to Pay No More than the Correct Amount of Tax. Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties. They should also expect the IRS to apply all tax payments properly.
- The Right to Challenge the IRS’s Position and Be Heard. Taxpayers have the right to object to formal IRS actions or proposed actions and provide justification with additional documentation. They should expect that the IRS will consider their timely objections and documentation promptly and fairly. If the IRS does not agree with their position, they should expect a response.
Now, here are the problems you will confront with these in the real world.
- For 1 and 2, there is no accountability. You do not know who is sending or receiving your notice and response. And when you talk to someone on the phone, while they give you their name and ID number, unless you are taping the conversation, there is deniability. Finally, the 501(c)(3) mess demonstrates that even if you can prove it, no one will suffer any consequences from their actions.
- For 3 and 4, the problem is that the IRS does not have to give you a timely response. While you may have 2-3 weeks to answer (and if you do not, they treat you as if you have lost your rights) they can take more than 2 months to respond and seldom catch up with any subsequent responses that you may have made. You are left not knowing which of your documents they have seen or considered.
So, while you may have these rights, for all practical purposes, they are not enforceable on your behalf.
Howard Lipset, CPA
Progressive Management, Inc.