What is
the Taxpayer Bill of Rights?
No longer
does the IRS have all the advantages in dealing with taxpayers.
Your rights as a taxpayer have been dramatically increased with
the passing of the Taxpayer Bill of Rights. Instituted in 1989,
the Taxpayer Bill of Rights specifies your rights in dealing
with the IRS. The Taxpayer Bill of Rights II, enacted in 1996,
and the Taxpayer Bill of Rights III, enacted in 1998, further
expanded those taxpayer rights. One aim of the Taxpayer Bill of
Rights is to have the IRS inform you of the effect of the tax
action the IRS is taking and how you can proceed and protect
your rights.
IRS
personnel must deal with you in a professional manner and must:
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Provide
the tax information and tax help that you need to comply
with the tax laws;
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Ensure
personal and financial confidentiality;
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Treat
you in a courteous manner;
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Provide
clear explanations in any IRS tax notice or mail inquiries,
and provide additional information if requested. If the IRS
sends you a tax notice of a tax deficiency or tax collection
action, the IRS must include a non-technical statement of
your taxpayer rights during an IRS tax audit and an
explanation of IRS collection and tax appeals procedures
within the IRS and the courts;
-
Collect
tax fairly (e. g., the IRS generally can't sell your home to
collect tax). If the IRS threatens to seize your property or
take some other tax collection measure that could cause you
significant hardship, then you may apply for a Taxpayer
Assistance Order by filing IRS Tax Form 911 with an IRS
Problem Resolution Office in the IRS district where you
live. While this is being reviewed by the IRS, tax
enforcement actions by the IRS will be suspended;
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The IRS
must agree to a three (3) year installment payment schedule
for tax if a taxpayer who owes $10,000 or less, exclusive of
interest and tax penalties, requests an installment
arrangement from the IRS and certain conditions are met;
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The tax
law generally requires an IRS supervisors approval before a
notice of tax lien or tax levy may be issued to a taxpayer.
Before the IRS may enforce a tax lien by levy, the IRS must
provide a tax notice to the taxpayer within five (5)
business days after the filing of a tax lien. The tax notice
must indicate the amount of tax owed and explain the IRS's
proposed action and the taxpayers rights to a hearing within
thirty (30) days before an IRS appeals officer. The tax
notice must also explain the IRS tax levy procedures, the
availability of IRS administrative appeals and the IRS
appeal procedures, the alternatives to the proposed tax levy
such as an installment agreement, and the tax rules for
obtaining a release of the tax lien.
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Burden
of Proof. Under certain circumstances the taxpayer may shift
the burden of proof in court to the IRS with respect to
factual issues relevant to determining tax liability.
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Certain
properties are exempt from IRS seizure. The weekly amount of
wages exempt from IRS seizure is equal to your standard tax
deduction plus allowable personal tax exemptions divided by
52. The amount of personal property exempt is $6,250 for
fuel provisions, furniture, and household effects. The
exempt amount for tools, books, machinery, or equipment used
in a business or profession is $3,125. Non-exempt business
property may not be seized unless an IRS District or IRS
Assistant District Director determines that the taxpayer's
other assets are insufficient to satisfy the tax liability
or that the collection of tax is jeopardized. A personal
residence is exempt from seizure if the unpaid tax liability
is $5,000 or less. If the unpaid tax liability exceeds
$5,000 the IRS must obtain written approval from a U.S.
District Court judge to seize the taxpayers personal
residence. Before the IRS may seize property, it must give
thirty (30) days notice so you can contest the tax levy if
it is erroneous. (The IRS can freeze the assets during the
waiting period). The tax notice must clearly describe the
tax levy procedures, your options for avoiding the tax levy,
such as beginning installment payments for overdue tax, and
steps for redeeming property if it is seized by the IRS. A
bank will hold your account for twenty-one (21) days after
receiving notice of an IRS tax levy before turning over the
money to the IRS. This freeze allows you time to contact the
IRS. If the IRS attempts to tax levy your property after you
have paid the underlying tax liability or after the statute
of limitations has expired, or if the property is exempt
under bankruptcy rules, then you should appeal to the IRS to
release the tax levy. Send a written statement to the IRS
District Director of the IRS district in which the tax lien
was filed explaining your grounds for appeal;
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Issue a
tax refund of overpaid tax;
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Provide
30 days notice prior to altering, modifying or terminating
an installment payment agreement;
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Reasonable
legal costs incurred during certain administrative
proceedings may be recovered if you prevail in court against
the IRS.
In your
interactions with the IRS, you have specific rights, too:
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Representation
- You may consult with and be represented by a tax adviser,
attorney, or other tax professional when dealing with the
IRS. The IRS must clearly inform you in IRS Publication 1, Your
Rights as a Taxpayer, of the right to be represented by
an accountant, attorney, or other tax professional. Once the
taxpayer has chosen a representative, the IRS may not
interview the taxpayer alone, unless consent is given. You
may give a written power of attorney to a lawyer, CPA, or
Enrolled Agent to represent you at an IRS tax audit. You do
not have to attend the IRS tax examination unless the IRS
issues you an administrative summons. The attorney-client
privilege has been extended under certain circumstances to
all non-attorney tax practitioners authorized to practice
before the IRS, including Certified Public Accountants,
Enrolled Agents, and Enrolled Actuaries.
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Recording
conferences with the IRS - You may record an IRS interview
at your own expense if you give 10 days notice; likewise,
the IRS may record a conference if you are informed 10 days
in advance.
-
Interruption
of an IRS tax audit - You can suspend an IRS tax audit in
progress at any time to consult with your professional
advisor.
Taxpayer Bill of Rights
II
Taxpayer Bill of Rights III
Click
here to read the IRS
Publication summary concerning Taxpayer Rights.
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