Last week we started a discussion about the Taxpayer’s Bill of Rights. This is an official IRS document that outlines what taxpayers can expect in the way of fair treatment. The first half of the list focused on elements of the product and the system. Now we’ll jump into the second half of the list which covers some more fundamental rights, as well as one that functions as an obvious olive branch.
6. The Right to Finality - This right has to do with timetables. Often with bureaucracies, one of the most frustrating elements is the open-endedness of interactions. You can send in a document or make a claim and you have no idea when it has any chance of being addressed. Similarly, sometimes an institution will come back years later about an item that you thought was already over and done with. To help alleviate this frustration, the IRS has placed time frames on many of its core processes. These include:
· 3 years – The normal time limit for the IRS to assess any additional taxes.
· 3 years – How long a taxpayer has to make a refund claim.
· 10 years – The amount of time the IRS can collect unpaid taxes.
7. The Right to Privacy - This right covers basic constitutional rights such as due process and search and seizure protections. However, it goes beyond them with limitations on how the IRS may interact with you. These limitations include limits on what can be levied for owed taxes and no unnecessarily intrusive investigations into your lifestyle.
8. The Right to Confidentiality - Similar to many of the permissions found on various websites, this right limits the way that your personal information may be utilized. Examples include:
· No IRS disclosure of tax information to outside parties unless you give explicit permission.
· No IRS contact with third parties close to you (e.g. an employer or bank) without permission.
· Applying confidentiality laws to accountants and others who may practice before the IRS.
9. The Right to Retain Representation - Like in a general court of law, a taxpayer has the right to choose their own representation. This could be a lawyer, CPA, or other qualified agent. For low income taxpayers, there is the availability of representation from a Low Income Tax Clinic. This service will be provided for free or at a minimal fee.
10. The Right to a Fair and Just Trial System - This sounds like an open-ended kind of statement, and indeed the IRS uses it as a catchall for many different elements. Here are some of the more intriguing:
· You can ask for a reduction in your tax bill if you think you will not be able to pay it or if it would cause financial hardship.
· If your salary is levied, the IRS must leave you enough for basic living expenses.
· Payment plans are available for most tax debt.
To find out more about your rights as a taxpayer please visit the Taxpayer Advocate service.
One Paragon Drive
Montvale, NJ 07645
Phone: (800) 395-5200
Mondays – Thursdays: 8:00 am – 6:00 pm EST
Fridays – 10:00 am – 4:00 pm EST