Unmasking Your Taxpayer Rights in the Battle with the IRS

Unmasking Your Taxpayer Rights in the Battle with the IRS

Let’s dive into a topic today that might seem as exciting as watching paint dry, but bear with me. It’s about our rights—taxpayer rights, to be precise. Picture this: you’re a superhero, and these are your superpowers when dealing with a certain nemesis we like to call the IRS.

Let’s take a deep breath and jump into the Taxpayer Bill of Rights. This is a list of ten superpowers… I mean, rights, that you have when you’re going mano-a-mano with the IRS. One of these is the ‘right to challenge the IRS’s position and be heard’. This is like your ‘freedom of speech’ in the world of taxation.

So, what exactly does this superpower entail? It means you can:

  1. Raise objections like a star defense lawyer in a courtroom drama.
  2. Provide additional documentation, kind of like surprise evidence in the aforementioned drama.
  3. Expect the IRS to consider your objections, just like a fair and just judge.
  4. Anticipate that the IRS will review your supporting documentation promptly and fairly.
  5. Get a response if the IRS doesn’t agree with your position. They can’t just ghost you!

Let’s paint a scenario. The IRS might send you a note saying there’s a math or clerical error on your tax return (a bit like a school teacher marking your homework). If this happens, you:

  1. Have 60 days to tell the IRS that you disagree. This is like asking the teacher for a re-check.
  2. Should provide copies of any records that may help correct the error, similar to showing your workings on a math problem.
  3. Can call the number listed on the letter or bill for assistance. It’s like having a private tutor!
  4. Can expect the agency to adjust your account and send a correction if they agree with you.

But what if the IRS sticks to their guns and doesn’t agree with your position? They’ll send you a notice proposing a tax adjustment (kind of like a “let’s break up” text). You then have the right to challenge this proposed adjustment by filing a petition in the U.S. Tax Court within 90 days (or 150 days if you’re overseas).

And, let’s say you’re being audited (like your tax return got selected for the finals). You can submit documentation and raise objections during this process. If the IRS still doesn’t agree, they’ll explain why they’re increasing your tax. But, you can still challenge their decision in the U.S. Tax Court before paying the additional tax.

In certain circumstances, the IRS must offer you a chance to have a hearing with the Office of Appeals before taking any enforcement actions to collect tax debt (like levying your bank account). If you don’t agree with the Appeals Office’s decision, you can petition the U.S. Tax Court.

For more information, you might want to check out Publication 556, ‘Examination of Returns, Appeal Rights, and Claims for Refund’.

So, remember, you’ve got rights. Use them wisely, and make sure you keep Uncle Sam on his toes!

[Source: IRS Tax Tip 2023-64]

***Disclaimer: This communication is not intended as tax advice, and no tax accountant -client relationship results**

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