Taxpayer Rights

Yes, you actually do have them.

And you’d better know them before you try to deal with the IRS because it is highly likely that the IRS official you will be dealing with either, a) doesn’t know them; or b) isn’t particularly enthusiastic about your exercise of them.

There have been three Taxpayer Rights bills passed by Congress in the last twenty years.

Here are some of the more critical provisions of each bill:

Taxpayer Bill of Rights I

  • Taxpayers have the right to legal representation similar to that of a criminal defendant
  • Taxpayers have the right to have the IRS processes explained to them
  • Taxpayers have the right to sue the government for damages caused by IRS officials
  • The IRS cannot evaluate collection employees based on their collection results

Taxpayer Bill of Rights II

  • Established the position of Taxpayer Advocate with higher level of independence and authority to assist taxpayers
  • Required IRS to give taxpayers 30 days written notice before altering, modifying or terminating an Installment Agreement
  • Expands IRS authority to abate interest accruals on delinquent tax liabilities
  • Granted Tax Court jurisdiction to review for abuse of discretion the IRS’s denial of interest abatement
  • Shifted the Burden of Proof to the IRS to show substantial justification for its position against a taxpayer
  • Allowed taxpayers to recover a civil penalty up to $500,000 for IRS misconduct

Taxpayer Bill of Rights III

  • Shifted the Burden of Proof to the IRS in Tax Court cases (upon certain conditions)
  • Expanded Innocent Spouse Relief
  • Expanded taxpayer due process rights in collection actions
  • Expanded taxpayer right to file a Motion to Quash an IRS third party summons
  • Required IRS supervisory approval for all liens, levies and seizures
  • Limited IRS ability to seize a taxpayer’s primary residence
  • Expanded IRS authority to accept an Offer in Compromise