YOUR RIGHTS AS A TAXPAYER
As a taxpayer, you have the right to be treated fairly, professionally, promptly, and courteously by Internal Revenue Service employees. Our goal at the IRS is to make sure that your rights are protected, so that you will have the highest confidence in the integrity, efficiency, and fairness of our tax system. To ensure that you always receive such treatment, you should know about the many rights you have at each step of the tax process.

 

Free Information and Help in Preparing Returns:

You have the right to information and help in complying with the tax laws. In addition to the basic instructions, IRS will provide you with the tax forms, and make available a great deal of other information.

 

Taxpayer Publications:

The IRS publishes over 100 free taxpayer information publications on various subjects. One of these, Publication 910, Guide to Free Tax Services, is a catalog of the free services we offer. You can order these publications and any tax forms or instructions you need by calling us toll-free at 1-800-424-FORM (3676).

 

Other Assistance:

We also provide walk-in tax help at many IRS offices, and recorded telephone information on many topics (through our Tele-Tax system). The telephone numbers for Tele-Tax, and the topics covered, are in the tax forms instructions. We make many of our materials available in Braille (at regional libraries for the handicapped) and in Spanish. We also provide assistance for the hearing impaired via special telephone equipment.

 

We have produced informational videotapes that you can borrow. In addition, you may want to attend our educational programs for specific groups of taxpayers, such as farmers and those with small businesses. In cooperation with local volunteers, we offer free tax return preparation assistance to low-income and elderly taxpayers through Volunteer Income Tax Assistance (VITA), and Tax Counseling for the Elderly (TCE) Programs.

 

Copies of Tax Returns:

If you need a copy of your tax return for an earlier year, you can get one by filling out Form 4506, Request for Copy of Tax Form, and paying a small fee. However, we often only need certain information, such as the amount of your reported income, the number of your exemptions, and the tax shown on the return. There is a nominal charge for this information.

 

Privacy and Confidentiality:

You have the right to have your personal and financial information kept confidential. You also have the right to know why we are asking you for information, exactly how any information you give will be used, and what might happen if you do not give the information.

 

Information Sharing:

Under the law, we may share your tax information with State tax agencies with which we have information exchange agreements, the Department of Justice and other federal agencies under strict legal guidelines, and certain foreign governments under tax treaty provisions.

 

Courtesy and Consideration:

You are entitled to courteous and considerate treatment from IRS employees at all times. If you ever feel that you are not being treated with fairness, courtesy, and consideration by an IRS employee, you should tell the employee's supervisor.

 

Payment of Only The Required Tax:

You have the right to plan your business and personal finances in such a way that you will pay the least tax that is due under the law. You are liable only for the correct amount of tax. Our purpose is to apply the law consistently and fairly to all taxpayers.

 

Fairness If Your Return Is Examined:

Most taxpayers' returns are accepted as filed, but if your return is selected for examination it does not suggest that you are dishonest, and the examination may or may not result in more tax. Your case may be closed without change, or you may receive a refund.

 

Arranging the Examination:

Many examinations are handled entirely by mail. For information on this, get Publication 1383, The Correspondence Process (Income Tax Accounts), available free by calling 1-800-424-FORM (3676). If we notify you that

your examination is to be conducted through a face-to-face interview,

you have the right to ask that the examination take place at a

reasonable time and place that is convenient for both you and the IRS.

If the time or place suggested by the IRS is not convenient, the

examiner will try to work out something more suitable. However, the IRS

makes the final determination of how, when and where the examination

will take place.

 

Representation:

Throughout the examination, you may represent yourself, have someone

else accompany you, or, with proper written authorization, have someone

represent you in your absence.

 

Recordings:

You may make a sound (tape) recording of the examination if you wish,

provided you let the examiner know in advance so that he or she can do

the same (Ten days is sufficient notice).

 

Repeat Examinations:

We try to avoid repeat examinations of the same items, however, this

sometimes happens. If we examined your tax return for the same items in

either of the 2 previous years and proposed no change to your tax

liability, please contact us as soon as possible so that we can see if

we should discontinue the repeat examination.

 

Explanation of Changes:

If we propose any changes to your return, we will explain the reasons

for the changes. It is important that you understand the reasons for any

proposed change. You should not hesitate to ask about anything that is

unclear to you.

 

Interest:

You must pay interest on additional tax that you owe, interest is

figured from the due date of the return. However, if our error caused a

delay in your case, and this was grossly unfair, you may be entitled to

a reduction in the interest. ( Only delays caused by procedural or

mechanical acts that do not involve the exercise of judgment or

discretion qualify). If you think we caused such a delay, please discuss

it with the examiner and file a claim.

 

Business Taxpayers:

If you are in an individual business, the rights covered in this

publication generally apply to you. If you are a member of a partnership

or a shareholder in a small business corporation, special rules (which

may be different from those described here) may apply to the examination

of your partnership or corporation items.

 

The examination of partnership items are discussed in Publication 556,

Examination of Returns, Appeal Rights, and Claims for Refund. The rules

for regular corporations are covered in Publication 542, Tax Information

on Corporations. The rules for 'S' corporations are described in

Publication 589, Tax Information on 'S' Corporations. You can get these

publications free by calling us at 1-800-424-FORM (3676).

 

An Appeal of the Examination Findings:

If you do not agree with the examiner's report, you may meet with the examiner's supervisor to discuss your case further. If you still don't agree with the examiner's findings, you have the right to appeal them. The examiner will explain your appeal rights and will give you a copy of Publication 5, Appeal Rights and Preparation of Protests for Un-agreed Cases. This publication explains your appeal rights in detail and tells you exactly what to do if you want to appeal. You can get it by calling us toll free at 1-800-424-FORM (3676).

 

Appeals Office:

You can appeal the findings of an examination within the IRS through our

Appeals Office. Most differences can be settled through this appeals

system without expensive and time-consuming court trials. If the matter

cannot be settled to your satisfaction in Appeals, you can take your

case to court.

 

Appeal to The Courts:

Depending on whether you first pay (in some cases) the disputed tax,

you can take your case to the U.S. Tax Court, the U.S. Claims Court, or

your U.S. District Court. These courts are entirely independent of the

IRS. As always, you can represent yourself or have someone admitted to

practice before the court represent you. If you disagree about whether

you owe additional tax, you have the right to take your case to the Tax

Court if you have not yet **paid the tax.

 

Statutorily you have 90 days from the time we mail you a formal notice

(called a "notice of deficiency") telling you that you owe additional

tax. You can pay the tax or file a petition with the Tax Court

disagreeing with the Notice of Deficiency.

 

If you have already paid the disputed tax in full and filed a claim for

refund for the tax that we disallowed (or on which we did not take

action within 6 months), then you may take your case to the U.S.

District Court or U.S. Claims Court, recovering litigation expenses.

 

If the court agrees with you on most issues in your case, and finds the

IRS's position to be largely unjustified, you may be able to recover

some of your litigation expenses from us. But to do this, you must have

used up all the administrative remedies available to you within the IRS,

(This applies only if IRS has also used up/complied with the

Administrative Procedures Act) including going through our Appeals

system.

 

Publication 556, Examination of Returns, Appeals Rights, and Claims for

Refund, will help you more fully understand your appeal rights. You can

get it free by calling us at 1-800-424- FORM (3676).

 

Fair Collection of Tax:

Whenever you owe tax, we will send you a bill. Be sure to check any bill

you receive to make sure it is correct. You have the right to have your

bill adjusted if it is incorrect, so you should let us know about an

incorrect bill right away. If we tell you that you owe tax because of a

math or clerical error on your return, you have the right to ask us to

send you a formal notice (a "notice of deficiency") (the taxpayer should

not need to ask for a Notice of Deficiency, IRS in following proper

procedure should send one when required). so that you can dispute the

tax. You do not have to pay the additional tax when you ask us for the

formal notice, if you ask for it within 60 days of the time we tell you

of the error.

 

If the tax is correct, we will give you a specific period of time to pay

the bill in full. If you pay the bill within the time allowed, we will

not have to take any further action.

 

Payment Arrangements:

You should make every effort to pay your bill in full. However, if you

can not, you should pay as much as you can and contact us right away.

(sometimes following this suggestion is not prudent. We suggest making

contact with IRS prior to any payments being made, not after) In order

to make other payment arrangements with you, we may ask you for a

complete financial statement (Form 556) to determine how you can pay the

amount due. You may qualify for an installment agreement based on your

financial condition, or we may arrange for your employer (you need to

agree with this procedure) to deduct amounts from your pay to be sent to

us.

 

We will give you copies of all agreements you make with us. (be very

careful to get all agreements signed by a supervisory IRS person, most

collection agents cannot give the taxpayer any guarantee that the

agreement signed will be valid) Only after we have tried to contact you

and given you the chance to pay any tax due voluntarily, do we take any

enforcement action (such as recording a tax lien, or levying on or

seizing property).

 

Therefore, it is very important for you to respond right away to our

attempts to contact you (by mail, telephone, or personal visit). If you

do not respond, we may have no choice but to begin enforcement

proceedings. (We highly recommend you always answer all IRS mail)

 

(If you visit or call on the telephone,be sure to record the date of the

visit or call, and be sure to write as well, getting a receipt for

mailing!)

 

Release of Liens:

If we have to place a lien on your property (to secure the amount of tax

due), you can expect us to release the lien promptly when you pay the

tax and certain charges. (this action becomes valid only after the

taxpayer has been procedurally and correctly notified of a lien having

been recorded)

 

Property Exempt From Levy:

If we must seize (levy on) ( this only applies if a proper notice of

lien has been recorded) your property, you have the legal right to keep:

 

1) A limited amount of personal belongings, clothing, furniture and

business or professional books and tools.

 

2) Unemployment, worker's compensation, and certain pension benefits.

 

3) Court-ordered child support payments.

 

4) Mail.

 

5) An amount of wages, salary, and other income ($75 per week, plus $25

for each legal dependent).

 

If at any time during the collection process you do not agree with the

collection employee, you can discuss your case with his or her

supervisor.

 

Access to Your Private Premises:

A court order is not generally needed for a IRS collection employee to

seize your property. (This procedure cannot happen unless the lien and

levy notices have been properly accomplished) However, you do not have

to allow the IRS employee access to your private premises, such as your

home or the non-public area of your business, if the employee does not

have court authorization to be there.

 

Withheld Taxes:

If we believe that you were responsible for seeing that a corporation

paid us income and social security taxes withheld from its employees,

and the taxes were not paid, we may look to you to personally pay an

amount based on the unpaid taxes. ( you must however be as stated in IRC

§6672 a person required for 940 taxes due and owing) If you feel that

you don't owe this, you have the right to discuss the case with the

collection employee's supervisor.

 

You as a corporate employee/officer, have the same IRS appeal rights as

other taxpayers, if you are not a person required under IRC §6672.

Because the Tax Court has no jurisdiction in this situation, you must

pay at least part of the withheld taxes (this is only true if you are

determined under IRC §6672 to be a person required)and file a claim for

refund in order to take the matter to the U.S. District Court or U.S.

Claims Court.

 

Publication 586A, The Collection Process (Income Tax Accounts), and 594,

The Collection Process (Employment Tax Accounts), will help you

understand your rights during the collection process. You can get these

publications free by calling us at 1-800-424-FORM (3676).

 

The Collection Process:

(A) To stop the process at any stage, you should pay the tax in full. If

you cannot pay the tax in full, contact us right away to discuss

possible ways to pay the tax. (look under the Fair Collection Process

above)

 

(B) First Notice and Demand For Unpaid Tax: (Enforcement Authority

arises 10 days after first notice).

 

(C) Up to 3 more notices are to be sent over a required period of time

asking for payment. (call IRS for the specific required time periods)

 

(D) Notice of intent to levy is sent by certified mail (final notice).

(this is of course based on the fact, that one of the 3 notices cited

above is a notice of lien) (Enforcement action to collect the tax begins

(lien, levy, seizure, etc. after having been procedurally sent to the

taxpayer) 20 days from last notice given). (where is the notice of

deficiency that is to be issued?)

 

Refund of Overpaid Tax:

Once you have paid all your tax, you have the right to file a claim for

a refund if you think the tax is incorrect. Generally, you have 3 years

from the date you filed the return or 2 years from the date you paid the

tax (whichever is later) to file a claim. (If we examine your claim for

any reason, you have the same rights that you would have during an

examination of your return).

 

Interest on Refunds:

You will receive interest on any income tax refund delayed more than 45

days after the later of either the date you filed your return or the

date your return was due.

 

Checking on Your Refund:

Normally, you will receive your refund about six weeks after you file

your return. If you have not received your refund in 8 weeks after

mailing your return, you may check on it by calling the toll-free

Tele-Tax number in the tax forms (1040, 1041, 940, & 941)instructions.

 

If your refund is reduced because of a debt you owe another Federal

agency or because you owe child support, we must notify you that this

has occurred. However, if you have a question about the debt that caused

the reduction, you should contact the other agency.

 

Cancellation of Penalties:

You have the right to ask that certain penalties (but not interest) be

canceled (abated) if you can show reasonable cause for the failure that

led to the penalty (or can show that you exercised due diligence, if

that is the applicable standard for that penalty).

 

If you relied on wrong advice given to you by IRS employees on the

toll-free telephone system, we will cancel certain penalties that may

result, however, you need to show that your reliance on the advice was

reasonable.

 

Special Help to Resolve Your Problems:

We have a Problem Resolution Program for taxpayers who have been unable

to resolve their problems with the IRS. If you have a tax problem that

you cannot clear up through normal channels, write to the Problem

Resolution Office in the district or Service Center with which you have

the problem. You may also reach the Problem Resolution Office by calling

the IRS.

 

If the tax problem is causing or will cause you significant hardship,

the Problem Resolution Officer will arrange for an immediate review of

your problem. (During the review, we will not take any collection

actions)

1.) What The IRS Must Tell All Taxpayers

 

Right To Representation:

The IRS is now required to Clearly inform you in the re-written IRS

Publication 1, Your Rights As A Taxpayer. This gives information to YOU

that YOU have the RIGHT to be represented by an Accountant, Attorney, or

Other Tax Professional.

 

NO Solo Interviews

If you have chosen a representative, YOU cannot be interviewed ALONE by the IRS without YOUR consent.

 

Right To A Clear Explanation Of The Process:

With the first notice/letter you receive from IRS of a proposed tax

deficiency, you MUST be given a Clear explanation of what the

Administrative processes are, from Audit through Appeals to the

Collection of Taxes.

 

Right To Assistance From Taxpayer:

You MUST be informed that you can receive assistance form an IRS

Taxpayer Advocate.

 

Right To Know Why A Refund Was Disallowed:

If your request for a refund is denied, you MUST be given a proper and

Clear explanation of the reason/s for the disallowance. (In whole or in

part)

 

Right To Continuity Of Contacts:

To the extent practicable, the IRS is to assign one person to your case

so that there is continuity of contact in the resolving of the issues

addressed.

 

Right To Have The Name Of An IRS Contact:

All personal notices and/or correspondence from IRS, MUST contain name,

phone, number, and ID number of IRS person making the contact.

 

Right To An Annual Statement Of Balance Due:

If you have made an installment agreement with IRS, IRS MUST send you an

annual statement of the balance owed, and show payments made during the

year.

2.) Audits And Collection

 

Right To Adequate Notice Of Levy:

Taxpayers MUST be given sufficient notice of levy of property so that

the taxpayer has ample opportunity to contest the levy.

 

Right Not To Face 'Economic Reality Audits':

Audits using financial status or economic reality techniques are BARRED.

IRS can only audit in this manner if there is a reasonable likelihood

that income was under reported.

 

Right To Know Beforehand That IRS Is Contacting Third Parties:

Reasonable ADVANCE Notice of IRS contact with third parties MUST be give

to taxpayer. (Other than criminal or jeopardy situations, or if taxpayer

has consented to such contact).

 

Right To Prevent A Levy During A Refund Lawsuit:

Levying property is BARRED during refund proceedings. This applies where

a refund lawsuit could be brought without the full payment of tax.

 

Right To Keep A Roof Over Your Head:

The IRS may NOT seize real property used as a residence to satisfy an

unpaid liability of $5,000 or less (including interest and penalties).

BEFORE a home or business assets can be seized, the IRS MUST First

exhaust ALL other payment options. Further, before a home can be LEVIED

upon, a Judge or Magistrate of a U S District Court MUST approve the

levy in writing.

 

Right To Pay In Installments:

IRS MUST consent installment agreement if the liability is $10,000 or

less (excluding interest and penalties), full payment is made within

three years, and other requirements are met. New Rules now make it

easier to make An Offer In Compromise.

 

3.) Taking The IRS To Court

(If you believe you are right and the IRS is wrong, you do not have to

settle. You may take your case to Court)

 

You Now Have Greater Access To Procedures Of Tax Court:

 

Small Tax Court cases just got bigger. The ceiling on small cases was

raised from $10,000 to $50,000. This means swifter resolution of your

case. Additionally, You do not need an attorney to represent you. The

down side is there are no appeals available.

 

Recover Damages In Cases Of IRS Abuse:

Civil damages up to $100,000 can be recovered where an IRS Officer or

Employee was negligent in the dis-regarding IRS Code or Treasury

Regulations in connection with the collection of taxes. The amount

escalates to $1,000,000 if damages are caused by a WILLFUL violation of

The Bankruptcy Code relating to automatic stays or discharges.

 

Bigger Recovery Of Legal Fees:

If the IRS was NOT substantially justified pursuing you, and you win,

you will be able to recover more attorney fees. The attorney hourly fee

was raised to $125.00 per hour from $115.00 per hour. In determining if

the IRS was substantially justified the fact that IRS lost in other

cases will be taken into account.

 

Tax Court can review decisions by IRS Appeals Division that are adverse

to taxpayers protest of IRS levies. Additionally, taxes improperly

collected during any period when it is BARRED for assessment or

collection, can be ORDERED as a refund by the Tax Court.

 

4.) Penalties And Interest

 

Equalization Of Interest Rates:

The interest rate paid by IRS is the now the same rate taxpayers must

pay (except corporations).

 

Reduced Penalties And Suspension Of Penalties And Interest In Certain Cases:

Penalties and Interest MUST be suspended after 18 months if the IRS has

failed to send a Notice of Deficiency within 18 months following the

original due date of a timely filed return. The 18 month period will be

reduced to 1 year in 2004.

 

Right To Have Penalty/Interest Calculations Explained:

After year 2000, the IRS is REQUIRED to explain to taxpayers how

penalties are computed along with the name of the penalty and the Tax

Code Section which authorized it. A similar rule applies also to

interest.