We have all heard the horror stories about what the IRS has done to taxpayers. There are stories of people being thrown out of their homes into the streets. Bank accounts are seized, businesses are shuttered, cars and homes sold to pay the debt.
While it is true that the IRS has the power to seize property including bank accounts and garnish paychecks. They are the world’s biggest, most powerful and most efficient collection agency. They have an army of agents armed with lawyers and even armed agents. However, they also have limitations placed on them by law and policy.
Many people don’t know that taxpayers have a specific Bill of Rights when it comes to dealing with the service. This Bill of Rights was proposed by National Taxpayer Advocate Nina Olsen and came about after years of abuse. The rights are written an IRS Publication (Pub 5170). So, what are these rights that protect taxpayers?
You have the right to be informed. You are entitled to clear explanations and directions for complying with tax law. Further, you have the right to know their decisions in a timely manner and know what to expect next. This sounds wonderful, but it can be still be confusing. The best way to protect this right is to have a competent professional to represent you throughout the process.
You have the right to quality service. This one is a subject to interpretation. While the service may strive to give prompt, courteous, and professional assistance, it is hard to accomplish when dealing with so many diverse people. One key part of this right is the right to speak to a supervisor about inadequate service. While a taxpayer can make the request, many will be too intimidated to ask. If a subject is too confusing, get a professional to help you.
You have the right to pay no more than the correct amount due. This is common sense, but sometimes we need to demonstrate to the service that what we say is the right number is the right number. It can be a fight, but it is worth the fight.
You have the right to appeal an IRS Decision in an independent forum. There is an appeals process and there are times when a taxpayer has not received a palatable decision. In those cases, there are multiple levels of appeal. Much of the arguments used in defending a taxpayer’s position come from these cases.
You have the right to finality. This statement means that taxpayers have a right to know how long the fight can last. All these timelines are in the Internal Revenue Code or IRC. They limit taxpayers as much or more than the service. Knowing these timelines really points to the urgency of resolving the situation.
You have the right to privacy. The service has really dropped the ball on this one in the past several years. In their defense, they did get the memo and are working to fix the problem. They have tightened access to transcripts eliminating faxed transcripts. It has become even harder for representatives to validate who they are on the phone. This is a good thing. The information that the IRS handles can ruin lives if mishandled. I applaud the newer efforts by the service in this case.
You have the right to confidentiality. It is critical that taxpayer’s information be only available to the minimum people required to perform the functions of the IRS. Identity theft often happens when confidentiality is compromised.
You have the right to retain representation. Most would agree it is a bad idea to go to court without a lawyer and it is equally a bad idea to talk to the IRS without a professional representative to guide you through the labyrinth that is the IRS system.
Finally, you have a right to a fair and just tax system. Many people would say that the tax system is anything but fair. The wording in Publication 5170 is focused on the idea that every taxpayer who has the same set of facts and circumstances will be treated the same.
The rights described here are lofty goals for the Internal Revenue Service. When a taxpayer is dealing with what is, at best, an unpleasant and intimidating situation, and at worst, a horrible and terrible nightmare, it may seem that these rights don’t exist. We must remember the Internal Revenue Service is a collection agency. They are the federal government’s accounts receivable department. Their first priority is and must be collecting the taxes used to run the government.
Avoiding a nightmarish experience is doable. File an accurate and truthful return every year by the deadline. If you need help, ask for it. There are thousands of Enrolled Agents in this country. Enrolled Agents are specifically licensed by the IRS to represent taxpayers nationwide. We are the nation’s tax experts.