Category: Taxpayer Bill of Rights

You might be wondering if the IRS can, with impunity, just keep after you year after year about every little detail of a single year's return. That's where the Right to Finality comes in. One aspect of the right to finality is the right to know the maximum time the IRS has to audit a particular tax year. You also have the right to know how much time you have to challenge an IRS decision, how long the IRS can come after you for a tax debt, and when the IRS is finished with an audit.

The IRS generally can go back three years to audit a return. If they find a substantial error, they can go back 6 years. The IRS is not in the business of trying to force taxpayers to pay more taxes, but the tax law has to be applied and administered correctly. That IS their job. Once they come to a decision, the IRS will inform you in most correspondence how long you have to respond, how long you have to pay any additional tax, and how long you have to challenge their decision. Those deadlines are hard and fast so don't put anything off. If you miss a deadline, you may lose all chance of challenging the IRS's decision.

In most of the correspondence that i have seen, the IRS gives you thirty (30) to ninety (90) days to respond or file with the Tax Court. Read your correspondence carefully. As I said before, deadlines are hard and fast so take note of them. Once a decision or tax amount is determined, the IRS will inform you about how and when to pay. You can even, in most cases, set up a payment plan to make it easier for you to fulfill your tax obligation.

The notices you receive from the IRS will always be written and not by phone or email. Once you have been audited and the IRS is complete they WILL send you a final letter letting you know the final decision. They will not "leave you hanging." The IRS does not want cases to be unresolved or in limbo due to tax being uncollectable. The IRS has procedures for almost every case.

Rest assured, once you start working with the IRS, they do and want to end each and every audit or collection. It may seem as if there is no end in sight, but the IRS does want to bring an end to to each case and you, as a taxpayer, have the Right to Finality when it comes to the IRS. If you are not satisfied with the pace or the constant back and forth, talk to a supervisor.They will work with you to get the issue or issues resolved.

The next right enumerated on the Taxpayer Bill of Rights is the Right to Appeal an IRS decision. You have to right to hold that appeal in an independent forum.  That appeal will be handled by the independent Office of Appeals which is independent of the IRS but located within the IRS. The Office of Appeals was set up to help taxpayers and the government resolve the tax issues and disagreements that may come up during the administration of the complex US tax system.You are entitled to a fair and impartial administrative appeal of the IRS's decision, including many penalty decisions, and the right to have a written response regarding the Office of Appeals' decisions.

Once the IRS makes a decision, you can appeal it. The Office of Appeals takes no sides in the disputes that come to them. You can present information that supports your request for a different decision and you will get a written response from the Office of Appeals.  Once the Office of Appeals comes out with a decision, you can either accept their decision or appeal it further. That would bring you to the US Tax Court. You can find out more information of how to bring a case to this court via its website at www.ustaxcourt.gov.

The US Tax Court is a Federal trial court. It is here in order that taxpayers can bring various cases to be decided regarding decisions of the IRS. It is a specialized court but not a court of final decision. Many taxpayers have brought cases to the US Tax Court but later appealed its decisions, including up to the US Supreme Court.

No matter what level your decision is at, be it at the IRS, the Office of Appeals, the US Tax Court,  or even the US Supreme Court, your tax dispute will be adjudicated and a final decision will be rendered. More on that in our next blog post regarding the Right to Finality.

You have the right to challange the IRS and to be heard. If you've gotten a notice from the IRS and they say you owe them money, don't rush out and pay them because that is not the end of the discussion. You have a right to challenge what they say in their notice. They do give you a limited amount of time to respond, but you should respond. Carefully read over the notice, get advice if you need to, and then respond in the manner they ask. You can't just call them and say, "You got it wrong", because the IRS usually needs documentation to show why you believe the way you do. You need to substantiate the view you have taken.

You can get copies of records and written info on the tax code and fax or mail it to them. The IRS will consider your objections in a prompt and fair manner. Don't expect a fast response,  but you will get a response. The IRS will respond either indicating they agree with you or that they disagree with your argument and why. There is a limited amount of time that you can argue with the IRS and they will always give you deadlines. DO NOT IGNORE THOSE DEADLINES!

The IRS is not there to "get you" or "steal your money". There is a tax code they must follow and you can disagree and point out where you think they are wrong. They will listen. Eventually there will be a final decision, one way or another. But that still isn't the end of your rights. The next "Taxpayer's Rights" post has to do with appealing the "final notice" of the IRS.

Continuing on with the rights that all taxpayer's in the US have, we now get to the area of payment. The IRS states in the Tax Payers Bill of Rights that all taxpayers have the Right to Pay No More than the Correct Amount of Tax which means that taxpayers only need pay the amount of tax legally due, including all legal interest and penalties, and to have the IRS apply all payments properly.

Most people don't agree with the amount of tax they owe or how much they need to pay, but those tax due amounts are determined by applying the somewhat convoluted US Tax Code. It's not an easy system to understand or administer. There are constant challenges and questions being asked of the IRS to explain why a certain amount is owed or to help determine what might be owed. One thing that must be remembered is that the IRS is there to administer the Tax Code, not write it. The Tax Code is written via legislation that is discussed, argued about, fought over, and ultimately passed by the US Congress and signed into law by the President of the United States.

No matter how much you owe, you have the right to only pay what is legally owed. But the request for payment doesn't end with a one-time statement from the IRS. My next post will be about the Right to challenge the IRS's position on tax owed, what the law says, and to the right to have your challenge heard.

This second installment on Taxpayer's Rights is about the second Right listed in the Taxpayer Bill of Rights, the Right to Quality Service. The IRS is supposed to provide prompt, courteous, and professional service to all taxpayers. The IRS representatives are supposed to speak to taxpayers in ways that the taxpayer can easily understand, to provide understandable info and be able to speak to a supervisor about inadequate service. If you feel you haven't gotten good service, don't hesitate to speak to a supervisor.

I have had many dealings with the IRS over the phone and have always had staff members be professional with my requests. The only issue I have is with the length of time it takes to get to speak to someone. Due to the lack of staff or an overwhelming amount of calls, I have had to wait one-half hour for a customer service rep, at times, and once spent an hour and forty-five minutes waiting. I think that Congress needs to increase the IRS funding instead of decreasing it.

We taxpayers need to remember that the IRS is working for us, the American People, by administering the tax laws to provide funding for the U.S. government. When we have an issue or are told we didn't fill out our tax forms correctly, we should be treated professionally, not have to either wait too long to talk with someone, or have the issue explained in legalese which makes us even more confused after the explanation. I have seen many a letter from the IRS that taxpayers can't understand. I hope that the IRS learns to write clearer, more understandable letters or at least provide a "translation" into everyday language. That would be part of the Right to Quality Service that we are being promised by the IRS.