Rights as a Taxpayer
Most taxpayers are only concerned with getting through the filing process as quickly and painlessly as possible. We have built our software around that idea. With that said, when it comes to answering each question we implore you to think through each answer you provide us to ensure it is accurate. Doing this will help to insulate you from issues between yourself and the IRS.
Should an issue arise, you should be aware that you are endowed with certain rights. The hope in doing this is that by treating each person in a fair, prompt, courteous, and professional manner they will continue to believe in the integrity, efficiency, and fairness of the American tax system.
The IRS gives taxpayers the right to information and assistance in the act of complying with tax law. This goes beyond just providing you instructions on forms. They have also published over 100 free information publications; like Pub. 910, which is a catalogue of all the free services that they offer.
You may have to pay a small fee to access copies of prior returns. However, if you only need certain information like the amount of your income reported, number of exemptions, or the taxes owed, the IRS is required to release this over the telephone or with a written request.
The taxpayer celebrates the right to have all of his or her financial and personal information kept confidential. Whenever you are asked to provide information, you also have the right to ask why, who will see it, how it will be utilized and what will happen if it isn't given. Under law, the information you provide can be shared with state agencies, the Department of Justice and other federal agencies under strict legal guidelines. In certain instances, it may also be shared with foreign governments under specific treaty provisions but this is not commonplace.
Fairness in Return
Computer programs are now utilized to try and distinguish discrepancies, inconsistencies, and flat out incorrect amounts. Besides expediting the turnaround time, these are also supposed to help remove any human bias.
You can represent yourself or, by supplying written authorization, have someone else represent you in your place. The representative needs to be a person who is allowed to practice before the IRS (i.e. attorney, certified public accountant, or enrolled agent). If you are asked to be interviewed, you may request to consult this person. You can have someone not representing you accompany you to the interview. You are also permited to make audio recordings of any meetings in regards to an examination, appeal, or collection.
When the IRS decides to make any changes to your return, they must explain said reasons for the changes in full. Do not hesitate to ask about anything that is unclear to you.
Interest in the Event of Error
The IRS must waive any penalties and interest when you relied on the incorrect information of one of their employees, and you can show you acted in a reasonable and good faith manner.
Refund of Overpaid Tax
You must pay your bill on time, but if you believe you overpaid, you have the right to file a claim for a refund of that which you believe to have been overpaid. To collect refund for overpayment you must file a claim on the return in question before 3 years from the date you filed or 2 years from the time you paid.With this, you will have the same rights as you did during the original examination.
Interest on Refund
When the refund is delayed by procedural or mechanical acts that do not involve the exercise of judgment for more than 45 days after the date you filed or date the return was due (whichever is the latest), you have a right to interest accrued. The same is true if an examination finds you owe additional tax. In this case you will be required to pay the interest on the amount from when it was originally due.
You have the right to appeal any action that is taken against you. To do so you must contact the Appeals Office of the IRS. Appeal rights are explained in depth in Publication 5, here. In the event you do not wish to use the Appeals Office or disagree with its stance, you may be able to take your case to U.S. Tax Court, U.S. Court of Federal Claims, or the U.S. District Court where you live.
If you take your case to court, the IRS will have the burden of proof, meaning they must prove certain facts. NEVER use the appeal system in an attempt to cause a delay, if your position is believed “frivolous” and “groundless” you could be hit with a penalty up to $25,000.
If the court sides with you on most of the issues in the case, you may be able to recover some of your administrative and litigation costs. You cannot be free of these costs unless you tried to resolve your case administratively, which means you attempted to use the appeals system, and it could not be resolved despite providing the IRS the necessary information to do so.
If you owe taxes, the IRS will send you a bill. You have the right to have that adjusted if the amount is incorrect. If you are told that you owe because of an error in math on your part, you have the right to request that they send a “notice of deficiency” so that you can start to file a dispute (as discussed earlier). The additional tax doesn't have to be paid immediately, if you ask for the notice within 60 days of being made aware of the error.
The IRS is also required to offer payment arrangements to qualifying individuals. Only after every avenue has been exhausted or if a filer refuses to comply , can they use enforcement action.
As with every government entity, the IRS holds equal rights policy and doesn't tolerate discrimination. This includes its employees, grantees, contractors, and/or subcontractors, regardless of race, sex, nationality, age or any other segmentation.
It is always best to understand your rights and what is afforded to all taxpayers should an issue arise and you have to resolve it with the IRS.