Know Your Taxpayer Bill of Rights

The first 10 amendments to the United States Constitution outline specific constitutional protections of individual liberties with specific prohibitions on governmental power.

The Bill of Rights guarantees explicit rights, and now the concept is entering other industries, including the IRS.

On June 9, the IRS announced the Taxpayer Bill of Rights that clearly lists taxpayers’ rights that are scattered throughout the 75,000-page tax code.

In a statement, the agency said “the ‘Taxpayer Bill of Rights’… will become a cornerstone document to provide the nation's taxpayers with a better understanding of their rights.”

According to the IRS, extensive discussions over the formation of the list have been held with the taxpayer advocate, Nina Olson, since 2007. Olson, is in charge of the Office of the Taxpayer Advocate, the agency that is tasked with helping taxpayers solve their problems with the IRS.

She had made the creation of the Taxpayer Bill of Rights a top priority for a long time, and mentioned it in her annual statement before Congress last summer. “Congress has passed multiple pieces of legislation with the title of ‘Taxpayer Bill of Rights’,”Olson said. “However, taxpayer surveys conducted by my office have found that most taxpayers do not believe they have rights before the IRS and even fewer can name their rights. I believe the list of core taxpayer rights the IRS is announcing today will help taxpayers better understand their rights in dealing with the tax system.”

The Taxpayer Bill of Rights contains 10 provisions:

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

IRS Commissioner John Koskinen states, “Respecting taxpayer rights continues to be a top priority for IRS employees, and the new Taxpayer Bill of Rights summarizes these important protections in a clearer, more understandable format than ever before.”

Taxpayers need to understand these concepts in order to best defend themselves against the IRS, whether they’re facing an audit, collection of unpaid liabilities or identity theft issues.

I have found that most taxpayers are so intimidated by the thought of dealing with anyone from the IRS that they are unaware of their rights and have no desire to exercise them. The stereotype that anyone from the IRS is a bad guy isn’t true. I have dealt with the agency for more than three decades, and have found almost every encounter to be productive and most employees to be reasonable, helpful and understanding.

That’s not to say there are a few bad eggs out there – there are, and I’ve run into them. But when the problem remains and the employee I’m dealing with stubbornly refuses to act properly, I’ve found a group manager or oftentimes the taxpayer advocate to step in and right the wrong.

When dealing with IRS employees, remain calm and respectful. Budget cuts in recent years have led to staff reductions and created longer-than-usual hold times resulting in frustration and anger among taxpayers. Remember that this is not the fault of the employees. They are frustrated as well, and overburdened with additional paperwork as a result of the staff reductions.

Also, remember your responsibilities as well as your rights. For example, the first right pledges the right to be informed. But it’s your responsibility to always provide the IRS with your current address so that they will be able to keep you informed. This can be accomplished by filing IRS Form 8822 for your individual tax return and IRS Form 8822B for your business tax return.

If you do not wish to deal with the IRS at any level, exercise Right No. 9, your right to representation and ask your tax pro to handle the situation for you.

And remember, if you still do not achieve a just result, the Taxpayer Advocate is there to help.