Taxpayer Bill of Rights

Did you know that as a taxpayer, you have a Bill of Rights?  Most taxpayers mumble and grumble about the IRS but they don’t realize that there is a published Bill of Taxpayer Rights which can be used to the advantage of the taxpayers.

For the next few blogs, we will share these Rights.  The first Right is…

THE RIGHT TO BE INFORMED.  Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes. As a taxpayer, you can expect:

  • Certain notices must include the amount (if any) of the tax, interest, and certain penalties you owe. It must explain why you owe these amounts. (If you don’t understand how these amounts are calculated, you can call the IRS for an explanation.)
  • When the IRS fully or partially disallows your claim for a refund, it must explain the specific reasons why. (Here again, if you don’t understand the reasoning or have information which may be helpful, call the IRS.)
  • Help with Understanding Your IRS Notice or Letter is available online at IRS.gov.
  • If the IRS proposes to assess tax against you, it must explain the process – from examination (audit) through collection – in its first letter. This letter should explain your options for a review by an independent Office of Appeals and how the Taxpayer Advocate Service may be able to help you. (In the event you do not wish to go through this process alone, you can engage a tax professional to assist.)
  • If you enter a payment plan, known as an installment agreement, the IRS must send you an annual statement. This gives you a record of balances and payments. (If you enter a payment arrangement, the best advice is to make certain your payments are made in a timely fashion.  Failing to timely make the agreed upon payments will not be to your advantage and you could face additional interest and penalties on the outstanding balance.)

In the upcoming weeks, we will share the remaining nine Rights.  In the meantime, happy Spring.

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Kay Sowa

About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent as well as a Certified Trust and Financial Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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