Taxpayer Rights

Taxpayer Bill of Rights

With the immense pow­ers that the gov­ern­ment wields over indi­vid­u­als, a Bill of Rights was estab­lished to limit the exer­cise of gov­ern­men­tal pow­ers. These rights, which have been enshrined as the first ten amend­ments to the U.S. Con­sti­tu­tion, pro­tect an individual’s nat­ural rights to life, lib­erty and property.

Aside from the Bill of Rights, tax­pay­ers have been given spe­cific rights that pro­tect them in the tax col­lec­tion process, which is a task of the Inter­nal Rev­enue Ser­vice (IRS). These rights are known as the Tax­pay­ers Bill of Rights (TBOR), which have been enacted by Con­gress in 1988. Years later, Con­gress expanded these rights by enact­ing the TBOR 2 in 1996 and TBOR 3 in 1998.

Essen­tially, the tax­pay­ers are guar­an­teed by law to:

  1. Pri­vacy and con­fi­den­tial­ity of their tax records;
  2. Pro­fes­sional and cour­te­ous ser­vice by IRS personnel;
  3. Rep­re­sen­ta­tion in deal­ing with tax prob­lems or issues;
  4. Help from the Tax­payer Advo­cate Ser­vice (TAS); and
  5. Admin­is­tra­tive and judi­cial review of deter­mi­na­tions or deci­sions by IRS.

In this first install­ment of a series of dis­cus­sions on tax­payer rights, we will focus on the rights pro­vided under the first TBOR. Inter­nal Rev­enue Code (IRC) Sec. 7521 pro­vides that every tax­payer shall have the right to an expla­na­tion on the process by which an audit of a taxpayer’s income tax return is con­ducted, how IRS col­lects taxes as a result of an audit, and how to appeal audit find­ings or reports. It also pro­vides tax­pay­ers the right to be rep­re­sented dur­ing the audit process and have the option of an audio record­ing, upon advance notice, of any inter­view by IRS personnel.

It will be seen that the orig­i­nal TBOR deals with the taxpayer’s rights dur­ing the audit process. In gen­eral, an audit is an exam­i­na­tion by the IRS of an income tax return when­ever there are dis­crep­an­cies found or ques­tion­able deduc­tions. Accord­ing to the IRS, in the vast major­ity of audits, the key issue involved is sup­port or jus­ti­fi­ca­tion on deduc­tions being claimed on the tax return.

An impor­tant aspect of the taxpayer’s rights under the first TBOR is the right of rep­re­sen­ta­tion. Despite the require­ment that tax­pay­ers be given an expla­na­tion of the whole audit process and how to appeal any audit find­ing, most peo­ple will still find the process con­fus­ing or dif­fi­cult to under­stand sim­ply because they are not famil­iar with it or don’t have the lux­ury to study and ana­lyze all the issues involved. This is where we step in. The tax pro­fes­sion­als at Tax Release Incor­po­rated and our web­site TheTaxAttorney.com will be your source for infor­ma­tion and assis­tance with your tax issue.

The law rec­og­nizes only three types of indi­vid­u­als who can rep­re­sent a tax­payer: an attor­ney, accoun­tant and an enrolled agent. Hav­ing been trained on the com­plex and intri­cate laws and reg­u­la­tions involv­ing taxes, these tax pro­fes­sion­als are in the best posi­tion to help tax­pay­ers in resolv­ing their tax problems.

One of the most impor­tant ben­e­fits of being rep­re­sented by a tax pro­fes­sional is that IRS per­son­nel will stop deal­ing directly with a tax­payer once they know he or she is being rep­re­sented. Like a mag­i­cal incan­ta­tion, tax­pay­ers can stop fur­ther ques­tion­ing by IRS per­son­nel upon inform­ing them that they would like to con­sult with a rep­re­sen­ta­tive. Any inter­view being con­ducted will gen­er­ally have to be suspended.

Finally, tax pro­fes­sion­als are bound by eth­i­cal rules and are account­able to their respec­tive licens­ing author­i­ties for any neg­li­gence or mal­prac­tice. Although this is not always a guar­an­tee against neg­li­gence or mal­prac­tice, it gives tax­pay­ers legal and admin­is­tra­tive recourse should their des­ig­nated rep­re­sen­ta­tives neglect their duties.