Taxpayers have the right to know what they need to do to comply with tax laws. They are entitled to clear explanations of the law and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.
What This Means for You
If you receive a notice fully or partially disallowing your refund claim, including a refund you claim on your income tax return, it must explain the specific reasons why the claim is being disallowed. IRC § 6402(l)
Generally, if you owe a penalty, each written notice of such penalty must provide an explanation of the penalty, including the name of the penalty, the authority under the Internal Revenue Code, and how it is calculated. IRC § 6751(a)
During an in-person interview with the IRS as part of an audit, the IRS employee must explain the audit process and your rights under that process. Likewise, during an in-person interview with the IRS concerning the collection of your tax, the IRS employee must explain the collection process and your rights under that process. IRC § 7521(b)(1)
Generally, the IRS uses Publication 1, Your Rights as a Taxpayer to meet this requirement.
The IRS must include on certain notices the amount (if any) of the tax, interest, and certain penalties you owe and must explain why you owe these amounts. IRC § 7522
The IRS must inform you in certain publications and instructions that when you file a joint income tax return with your spouse, both of you are responsible for all tax due and any additional amounts due for that tax year, unless “innocent spouse” relief applies. RRA 98 § 3501(a)
The IRS must inform you in Publication 1 Your Rights as a Taxpayer and all collection related notices that in certain circumstances you may be relieved of all or part of the tax owed with your joint return. This is sometimes referred to as “innocent spouse relief.” RRA 98 § 3501(b)
The IRS must explain in Publication 1 Your Rights as a Taxpayer how it selects which taxpayers will be audited. RRA 98 § 3503
If the IRS proposes to assess tax against you, it will send you a letter providing the examination report, stating the proposed changes, and providing you with the opportunity for a review by an Appeals Officer if you respond generally within 30 days. This letter, which in some cases is the first communication from the examiner, must provide an explanation of the entire process from examination (audit) through collection and explain that the Taxpayer Advocate Service may be able to assist you. RRA § 3504
If you enter into a payment plan, known as an installment agreement, the IRS must send you an annual statement that provides how much you owe at the beginning of the year, how much you paid during the year, and how much you still owe at the end of the year. RRA § 98 3506, Treas. Reg. § 301.6159-1(h)
You have the right to access certain IRS records, including instructions and manuals to staff, unless such records are required or permitted to be withheld under the Internal Revenue Code, the Freedom of Information Act, or the Privacy Act. Certain IRS records must be available to you electronically.
If the IRS is proposing to adjust the amount of tax you owe, you will typically be sent a statutory notice of deficiency, which informs you of the proposed change. This notice provides you with a right to challenge the proposed adjustment in Tax Court without first paying the proposed adjustment. To exercise this right, you must file a petition with the Tax Court within 90 days of the date of the notice being sent (or 150 days if the taxpayer’s address on the notice is outside the United States or if the taxpayer is out of the country at the time the notice is mailed). Thus, the statutory notice of deficiency is your ticket to Tax Court. IRC §§ 6212; 6213(b)
For more information about the United States Tax Court, see the Court’s taxpayer information page.
The IRS should ensure that its written guidance and correspondence is accessible, consistent, written in plain language, and easy to understand.
If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.