IRS Complaint? Know Your Taxpayer Rights
by Justin Moyer, Tax Controversy Attorney based in Raleigh, NC
When you receive correspondence from the IRS and feel that you are not being treated with professionalism and respect, you may want to initiate an IRS complaint. To know how to do this correctly, it is important that you understand your rights as an American taxpayer.
Within the IRS agency is an independent organization founded to assist taxpayers and advocate on their behalf. This organization, called the Taxpayer Advocate Service, helps taxpayers with common issues like identity theft, incorrect tax returns and even the inability to pay. This organization helped create the Taxpayers Bill of Rights which was adopted by the IRS.
The rights outlined in the Bill of Rights protect taxpayers on many levels and will be instrumental in helping you prevail with any type of IRS complaint.
The Right to Information
First, you have the right to access general information that explains tax laws, audit processes and collection procedures in plain and clear language. You also have the right to specific information relating to you personally such as IRS decisions about your tax accounts and clear explanations of any outcomes. You have the right to understand the assessment method of any penalties and the corresponding tax code that authorizes the penalty.
Taxpayers who have entered into a payment plan, known as an installment agreement, should receive an annual accounting that shows the amount owed at the beginning of the year, records of payments made throughout the year and the balance owed at the end of the year. The Taxpayer Bill of Rights requires that all IRS correspondence be accessible, consistent and written in plain, easy-to-understand language.
The Right to Professionalism
Anyone dealing with the IRS, whether regarding an IRS complaint or some other type of matter, should receive prompt responses to any inquiries and be treated with the utmost professionalism by any IRS correspondence whether written or verbal. The IRS should only contact you during business hours, defined as 8am-9pm, and only directly, never through employers or third parties. The IRS agent or employee should always identify themselves and provide accurate contact information.
The Right to a Fair Accounting
Taxpayers have the right to see all accounting, challenge discrepancies or inaccuracies and only pay the amount owed. Taxpayers who determine they have overpaid are entitled to file a refund claim. Taxpayers may also request that the IRS remove any interest charged if it was determined to be a result of unreasonable delays caused by the agency.
The Taxpayer Bill of Rights also understand the taxpayer’s need for finality in tax matters and imposes time limits on actions the IRS may take to collect taxes. For example, the IRS generally has three years from the date the tax return was filed to assess the tax. There are some exceptions to the three-year rule such as when a return was not filed at all or when a fraudulent return was filed. Also, the IRS generally has ten years from the assessment date to collect unpaid taxes. There are many exceptions to this time constraint as well such as extending the collection period because of bankruptcy or a pending offer in compromise. [internal link]
The Right to Confidentiality
You have the right to expect that any information provided to the IRS, whether through the initiation of an IRS complaint or through any of type of tax controversy, will remain confidential. Any IRS employees who wrongfully use or disclose that information should have appropriate disciplinary actions taken and reparations should be made. Generally speaking, the IRS may not disclose tax information to third parties without permission and they may not contact third parties to obtain information without providing the taxpayer with advance notice. The IRS must provide taxpayers with a list of third-party contacts, both periodically and upon request.
Communications between a taxpayer and an attorney with respect to legal advice given is considered privileged and confidential. The IRS cannot require disclosure of privileged communications.
The Right to Retain Representation
Taxpayers have the right to hire an experienced tax attorney to represent them on tax controversies even though the matters are considered noncriminal. The IRS must inform taxpayers that if they cannot afford to hire a representative they may be eligible to receive assistance from the Low Income Taxpayer Clinic (income restrictions apply to qualify).
It is essential that you choose an experienced tax attorney who understands the complexities of the tax laws and the many different solutions available to resolve all types of tax controversies. Having a representative with the right knowledge, a supportive attitude and unparalleled advocacy in your corner makes the biggest difference in the outcome of your case. Learn more about the experienced tax attorneys at Murray Moyer, PLLC.
The Right to Challenge and Appeal
And finally, if you still do not get the tax resolution you were seeking, you have the right to challenge decisions throughout the process and appeal certain outcomes. IRS decisions may be appealed for a fair, independent assessment. The procedure and timelines to appeal vary depending on the type of matter you intend to appeal. For instance, appealing the rejection of an Offer in Compromise is a different process than appealing the amount of a penalty assessed. If the IRS rejects your request for an offer in compromise asking the IRS to settle your tax debt for less than the amount owed, or a payment plan, called an installment agreement, then you may seek an independent review of the rejection with the IRS Office of Appeals.
In many circumstances, the Office of Appeals has exclusive authority to settle your case. Generally, after you petition the Tax Court, the Office of Appeals will be the only office within the IRS who can settle your case as long as the statutory notice of deficiency or other notice of determination was not issued by the Office of Appeals. Refer to the IRS publication, Overview of the Appeals Process, for more information.
At Murray Moyer, PLLC, our tax attorneys help clients when they run afoul of the IRS or NCDOR. We make sure the agency treats taxpayers fairly and abides by the Taxpayers Bill of Rights. If you cannot pay what is owed, failed to file tax returns or face any other type of tax controversy issue, contact Murray Moyer, PLLC for a consultation.