Know your rights if the IRS breaks the rules

Most people know that breaking tax rules, even accidentally, can bring serious consequences like an audit. It may seem like a one-way street, but the IRS has to follow rules, too. Here’s what three tax attorneys say you should know.

Taxpayers do have rights

The Taxpayer Bill of Rights, which the IRS adopted in 2014, summarizes taxpayer rights scattered throughout the tax code, making it easier to understand what the IRS can and can’t do. The Taxpayer Bill of Rights groups taxpayer rights into 10 basic tenets. Under them, taxpayers have the right to:

1. Be informed.
2. Quality service.
3. Pay no more than the correct amount of tax.
4. Challenge the IRS’s position and be heard.
5. Appeal an IRS decision in an independent forum.
6. Finality.
7. Privacy.
8. Confidentiality.
9. Retain representation.
10. A fair and just tax system.

It’s often helpful to reference these rights when talking with the IRS, says Glen Frost, a tax attorney in Columbia, Md. When talking with the IRS, Frost says he often points out that it’s the taxpayer’s right to be heard, for example.

You can push back

IRS disputes can be intimidating. Frost says he’s seen even certified public accountants become submissive around IRS agents. But the Taxpayer Bill of Rights provides the grounds to challenge the agency’s position.

“The first principle here is, these aren't rights that are granted by the IRS, but they're simply recognized by the IRS, and they all come down from the law that's either made by Congress or made by the courts,” says Fred Daily, a tax attorney in St. Petersburg, Fla.

Tax news and advice

Taxpayers have the right to retain representation. Taxpayers also have the right to talk to an IRS supervisor — a move that might save hours of time and frustration, Frost adds.

There are limits

The Taxpayer Bill of Rights may help you navigate disputes, but it’s not necessarily a tool for things like resolving problems with a specific employee, for example, says Alvin Brown, a tax attorney in New York City.

“The [Taxpayer] Bill of Rights is incomplete, and it needs some more backbone. It needs more structure, more specificity,” Brown says.

Other options for taxpayers include filing a complaint with the Treasury inspector general for tax administration, an IRS watchdog, or turning to the courts, he says.

MORE:

• What you should know about IRS audits
• What’s the best tax software to use?
• 7 mistakes that may result in a tax penalty

Tina Orem is a staff writer at NerdWallet, a personal finance website. Email:torem@nerdwallet.com.

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