IRS Adopts Taxpayer Bill of Rights

After years of discussion in Washington about the need for a document that formally enumerates the rights of taxpayers, the IRS announced on June 10, 2014, that it is adopting a "Taxpayer Bill of Rights." According to the IRS, the document will provide the nation's taxpayers with a better understanding of their rights that are already embedded in the tax code, including the right to confidentiality, the right to retain representation, and the right to challenge the agency's position.

Modeled on the U.S. Constitution's Bill of Rights, the Taxpayer Bill of Rights brings together 10 broad categories of rights scattered throughout the tax code. Thus, it builds on previous efforts to identify and specify these rights, making them more visible and easier for taxpayers to call upon when needed. Although the Taxpayer Bill of Rights is not legally enforceable, the IRS has said taxpayers can rely on it with confidence, as the rights listed are already statutorily guaranteed.

The Taxpayer Bill of Rights contains the following 10 provisions:

  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. (This means that taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.)
  5. The Right to Appeal an IRS Decision in an Independent Forum. (This means that taxpayers are entitled to the following: a fair and impartial administrative appeal of most IRS decisions, including many penalties; the right to receive a written response regarding an Office of Appeals's decision; and the right to take their cases to court.)
  6. The Right to Finality. (This means that taxpayers have the right to know the maximum amount of time they have to challenge the IRS's position and the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt, and they have the right to know when the IRS has finished an audit.)
  7. The Right to Privacy.
  8. The Right to Confidentiality.
  9. The Right to Retain Representation. (This means that taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS, and the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.)
  10. The Right to a Fair and Just Tax System. (This means that taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information in a timely fashion. And they have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulties or if the IRS has not resolved their tax issues properly and in a timely manner through its normal channels.)

The IRS said it released the document following extensive discussions with the Taxpayer Advocate Service, an independent office within the IRS that represents the interests of U.S. taxpayers. Adopting a Taxpayer Bill of Rights has been a goal of National Taxpayer Advocate Nina E. Olson since 2007, and it was listed as the Advocate's top priority in her most recent annual report to Congress.

Commenting on the adoption of the rights, Olson noted that a survey by the Taxpayer Advocate Service in 2012 found that only 46% of U.S. taxpayers believed they had rights in relation to the IRS, and only 11% knew what those rights were.

"Congress has passed multiple pieces of legislation with the title of 'Taxpayer Bill of Rights,'" Olson said. "However, taxpayer surveys conducted by my office have found that most taxpayers do not believe they have rights before the IRS and even fewer can name their rights. I believe the list of core taxpayer rights the IRS is announcing today will help taxpayers better understand their rights in dealing with the tax system."

Olson and IRS Commissioner John A. Koskinen added that they would continue to seek a formal enactment of taxpayer rights by Congress. Koskinen further emphasized that the document would be used to support his continuing advocacy for budgetary resources for the IRS to fulfill its commitments to protect taxpayers.

The IRS reported that starting in 2014 a printed version of the document will appear in Publication 1, "Your Rights as a Taxpayer," which will be sent to taxpayers when they receive IRS notices on issues ranging from audits to collection, and the rights will also be publicly visible on and in all IRS facilities. Publication 1 is available in English, Spanish, Chinese, Korean, Russian, and Vietnamese.