More Thoughts on Taxpayer Rights

Second article in a series on taxpayer rights

In a prior edition, I had promised (or threatened, depending on your perspective) a series of blog posts on the Taxpayer Bill of Rights (TBOR). The Service’s own words highlight the central position taxpayer rights hold (or ought to hold).

The Taxpayer Bill of Rights is a cornerstone document that highlights the 10 fundamental right taxpayers have when dealing with the Internal Revenue Service…The IRS… expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

Taxpayer rights are so central, IRS memorializes TBOR as Publication 1, Your Rights as a Taxpayer. Publication 1, for newer practitioners, is a two-page official IRS publication that explains one’s rights as a taxpayer and the processes for both enforcement actions (exam, collection, and appeals) and refunds.

The Taxpayer Advocate Service (TAS) has created a video TBOR overview.

The fourth of the ten rights — the right to challenge the IRS’ position and be heard — is described in Publication 1 as follows:

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.

Publication 1 includes only the broad description above. The TAS website includes a list of what a taxpayer can expect. For instance:

If you submit documentation or raise objections during an examination, and the IRS does not agree with your position, it will issue a statutory notice of deficiency…

If you are notified by the IRS that it has adjusted your return because of a mathematical or clerical error, you have 60 days to tell the IRS that you disagree. If IRS does not agree, it will issue you a statutory notice of deficiency proposing a tax adjustment…

This all seems so promising. Though at this point in the conversation (or monologue, I suppose), I must admit two things occur to me:

  1. The math error notice statement is much more benign in theory than it is in practice.

  2. What if IRS violates a taxpayer’s rights—for instance, by failing to provide the second right (the right to quality service, in case you haven’t yet memorized the list)?

We’ll take those in reverse order. My next post will focus on the rights practically as opposed to theoretically. And (spoiler alert), I have some concerns about how well IRS is doing and what recourse taxpayers and their representatives have.

As to math error notices, well as it turns out I’m leading a course this Wednesday for the New York State Society of Enrolled Agents (NYSSEA) on that very issue. I’d be pleased as punch if you joined us.

Click here or look on NYSSEA’s website (www.nyssea.org) if that doesn’t do the trick.