Most taxpayers have never interacted with the IRS outside of tax season, much less considered their taxpayer rights.
And that makes sense! For most people, the whole process rarely contains more than a couple parts. File your return, maybe cut the IRS a check, and wait for the tax refund to hit your account.
But once in a while, there may be a few extra steps. A tax audit, a tax bill, or an amended return can really throw your relationship with the IRS into question. And that can frighten even the most confident taxpayer.
The truth of the matter is that very few people actually know how to deal with the IRS—and what their rights and responsibilities are when they do so. If you’re not working with a full service tax firm who can stand at your side and defend you through tax audits or answer your most pertinent tax questions, you can feel overwhelmed and alone should you ever receive a letter from the IRS.
At Edge Financial, we don’t believe you should ever feel overwhelmed when dealing with the IRS. You should feel empowered.
With that in mind, we wanted to go over your rights—as outlined by the IRS.
Introducing the Taxpayer Bill of Rights. Did you know that was a thing?
Most people don’t! It’s a shame, because the Taxpayer Bill of Rights outlines your full rights as a taxpayer. It says exactly what you can and should expect from the IRS as well as every entitlement and service to which you’re entitled.
The IRS outlines 10 rights on their website. We’ll break each one down into two parts: What the IRS says and what it means.
The IRS Says: “Taxpayers have the right to know what they need to do to comply with the tax laws.”
What That Means: You’re entitled to thorough and complete information, whether it may be about filing your taxes, IRS tax codes, or anything else. The IRS should make understanding your responsibilities as a taxpayer clear.
The IRS Says: “Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS…”
What That Means: The IRS should treat you fairly and courteously, and it should always give you the clear explanations and answers you seek. If you receive anything less than great customer service, you’re entitled to speak to a supervisor.
The IRS Says: “Taxpayers have the right to pay only the amount of tax legally due…”
What That Means: You only need to pay exactly what you owe, including penalties and interest. And the IRS needs to properly apply any payments you make to your account.
The IRS Says: “Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions…”
What That Means: You can defend yourself and challenge any tax situation you find yourself in. The outcome may not always change, but an IRS decision isn’t set in stone. You can object and provide additional documents.
The IRS Says: “Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions…”
What That Means: You have the right to appeal any decision the IRS may make, and you’re entitled to receive any communication or decision in writing. In most cases, you can take your case to court, if need be.
The IRS Says: “Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position.”
What That Means: Whether it comes to an audit or debt collection, you’re entitled to know how long IRS processes can take. If the IRS makes some decision regarding your accounts, you deserve to know how long you have to contest it.
The IRS Says: “Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will…be no more intrusive than necessary…”
What That Means: The IRS can’t intrude in your life more than it needs to, and they can’t break the law. They’ll always have to follow due process, even if they’re seizing an asset.
The IRS Says: “Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law.”
What That Means: Your private info should remain private—full stop. If any tax prep company, an employee of the IRS, or literally anyone uses or shares your tax return information, they’ll be held accountable.
The IRS Says: “Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS.”
What That Means: In the case you need to deal with the IRS beyond filing taxes, you’re entitled to representation. That right extends from audits all the way to the most serious IRS actions, like tax liens or wage garnishment.
The IRS Says: “Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely.”
What That Means: Life happens, and the IRS must be empathetic about that. The IRS needs to take into financial hardship, key family events, and even natural disasters when it comes to determining payment plans or even deadlines.
We hope you never have to deal with the IRS outside of tax season. But for many, that day will come at one point or another. In our experience, the first step to staying confident and in control with the IRS is to know exactly what rights you’ve been afforded in the first pace.
Hey, it feels good to be in control, doesn’t it? We think so!