31 May Understanding Taxpayer Rights: What You Need to Know

Understanding Taxpayer Rights: What You Need to Know

Navigating the complexities of the tax system can be daunting, but knowing your rights as a taxpayer can empower you and ensure that you are treated fairly. The IRS and state tax authorities are obligated to respect and uphold these rights, which are designed to protect you from unfair treatment and to ensure transparency in the tax process. In this blog, we will explore the fundamental rights every taxpayer should be aware of and how these rights can help you manage your tax obligations more effectively.

What Are Taxpayer Rights?

Taxpayer rights are the legal entitlements provided to individuals and businesses in their interactions with the IRS and other tax authorities. These rights are enshrined in the Taxpayer Bill of Rights, which outlines ten key protections that the IRS must observe when dealing with taxpayers. Understanding these rights can help you navigate tax issues more confidently and ensure that you receive fair treatment.

The Ten Key Taxpayer Rights

1. The Right to Be Informed
   • You have the right to know what you need to do to comply with the tax laws. This includes receiving clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. You also have the right to be informed of IRS decisions about your tax accounts and to receive clear explanations of the outcomes.
2. The Right to Quality Service
   • You have the right to receive prompt, courteous, and professional assistance in your dealings with the IRS. This includes the right to speak to a supervisor about inadequate service and to expect that tax professionals will be appropriately trained to handle your issues.
3. The Right to Pay No More than the Correct Amount of Tax
   • You are entitled to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.
4. The Right to Challenge the IRS’s Position and Be Heard
   • You have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions. You also have the right to expect that the IRS will consider your timely objections and documentation promptly and fairly.
5. The Right to Appeal an IRS Decision in an Independent Forum
   • You are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties. You also have the right to take your case to court.
6. The Right to Finality
   • You have the right to know the maximum amount of time you have to challenge the IRS’s position, as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. You also have the right to know when the IRS has finished an audit.
7. The Right to Privacy
   • You have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary. The IRS must respect all due process rights, including search and seizure protections, and provide, where applicable, a collection due process hearing.
8. The Right to Confidentiality
   • You have the right to expect that any information you provide to the IRS will not be disclosed unless authorized by you or by law. The IRS cannot disclose your information to third parties without your permission, except as provided by law.
9. The Right to Retain Representation
   • You have the right to retain an authorized representative of your choice to represent you in your dealings with the IRS. If you cannot afford representation, you have the right to seek assistance from a Low Income Taxpayer Clinic.
10. The Right to a Fair and Just Tax System

• You have the right to expect the tax system to consider facts and circumstances that might affect your underlying liabilities, ability to pay, or ability to provide information timely. You are also entitled to receive assistance from the Taxpayer Advocate Service if you are experiencing financial difficulty or if the IRS has not resolved your tax issues properly and timely through its normal channels.

How to Exercise Your Taxpayer Rights

1. Stay Informed
   • Regularly review IRS publications, notices, and your personal tax information to ensure you are fully informed about your tax obligations and any actions the IRS has taken regarding your tax accounts.
2. Seek Professional Assistance
   • If you encounter difficulties understanding your rights or dealing with the IRS, consider hiring a tax professional or attorney who specializes in tax law. They can provide guidance, represent you in disputes, and ensure your rights are protected.
3. Use the Taxpayer Advocate Service
   • The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers resolve problems with the IRS and ensures that taxpayers are treated fairly. If you have unresolved issues with the IRS or are facing financial difficulties due to tax issues, TAS can provide free assistance.
4. File Appeals and Requests Promptly
   • If you disagree with an IRS decision, file an appeal or request for review promptly. Timeliness is crucial in ensuring that your objections are considered and that you retain all your rights to challenge IRS actions.
5. Maintain Detailed Records
   • Keep thorough records of all communications with the IRS, as well as copies of all tax returns, notices, and supporting documents. This documentation can be vital if you need to challenge the IRS’s actions or appeal a decision.

Conclusion

Understanding your taxpayer rights is essential for navigating the complexities of the tax system and ensuring you are treated fairly. By staying informed, seeking professional help when needed, and actively exercising your rights, you can better manage your tax obligations and resolve any issues that arise. At REZOTAX, we are committed to helping you protect your taxpayer rights and achieve the best possible outcomes in your dealings with the IRS. Contact us today to learn more about how we can assist you in safeguarding your rights and resolving your tax issues.