The Internal Revenue Service (IRS) last week adopted a “Taxpayer Bill of Rights”. However, the IRS concedes that no new taxpayer rights or protections have actually been created through this Bill of Rights.
The newly released taxpayer Bill of Rights takes various policies embedded in the tax code and groups them into 10 broad categories, in an effort to make them more visible and easier for taxpayers to find on the IRS website. The IRS is also touting that it will post these rights conspicuously at IRS offices and send them to taxpayers facing debt collection, audit, and other tax matters.
Here are the 10 broad rights the IRS will remind you of through this version of the taxpayer Bill of Rights:
1. The Right to Be Informed
2. The Right to Quality Service
3. The Right to Pay No More than the Correct Amount of Tax
4. The Right to Challenge the IRS’s Position and Be Heard
5. The Right to Appeal an IRS Decision in an Independent Forum
6. The Right to Finality
7. The Right to Privacy
8. The Right to Confidentiality
9. The Right to Retain Representation
10. The Right to a Fair and Just Tax System
National Taxpayer Advocate Nina Olson was the catalyst behind the IRS’ adoption of this Bill of Rights. According to a 2012 Taxpayer Advocate survey of taxpayers who had filed a 2010 tax return, only 55% of taxpayers surveyed believed that they had any rights before the IRS. Olson pushed for the adoption of this Bill of Rights because taxpayers who are unaware of their rights will not avail themselves of those rights.
Interestingly however, the IRS did not adopt, or is at least not publicizing in its Bill of Rights, the taxpayer obligations that were acknowledged by Olson as part of the social contact between the government and its citizens. Here is Olson’s list of obligations that taxpayers have to the IRS:
1. The obligation to be honest
2. The obligation to be cooperative
3. The obligation to provide accurate information and documents on time
4. The obligation to keep records
5. The obligation to pay taxes on time
It is when these obligations are not fulfilled that tax problems tend to arise which require taxpayers to be cognizant of their rights. While educating the public as to its general rights is indeed important, a taxpayer’s actual rights in practice are riddled with exceptions, qualifications, and procedural hurdles which enable the IRS to enforce the Internal Revenue Code and collect revenue. I wonder how long it will take for some of the posters publicizing these rights go missing at IRS offices after taxpayers simply point to the posters repeatedly while advocating an improper tax position.
This article is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.