What Are Your Rights as a Taxpayer?

For some, the perception they have of the IRS is that they govern with martial law. It's the IRS way or no other way at all. Pay your taxes, pay on time, and hope that you never hear from them again.

This archaic opinion not only colors the IRS incorrectly, but it also takes away from the hard work and enormous efforts made by the agency to educate taxpayers as to exactly why they need to file their taxes, how to do so, and what to do if they cannot pay their taxes in a timely manner.

With the latter in mind, the IRS has established a set of taxpayer rights. All taxpaying citizens need to be aware of what their rights are before the IRS.

These eight rights are known as the Declaration of Taxpayer Rights, and are set out in IRS Publication 1, Your Rights as a Taxpayer.

1. Protection of your rights

In the last twenty years, Congress has passed three Taxpayer Rights bills. These rights cover everything from legal representation to shifting the burden of proof to the IRS in Tax Court cases. Protection of all of these rights is paramount to the way the IRS conducts business.

2. Right to privacy and confidentiality

The IRS releases tax information only after an individual has acceptably proved their identity via a series of disclosure questions. Additionally, the IRS notifies taxpayers who have a delinquent tax debt that third parties may be contacted in an effort to collect the debt. As a taxpayer, you have a right to see the list of all third parties who have been contacted.

The IRS is also governed by the Fair Debt Collection Act. They must follow this at all times when it comes to, among other things, making outcalls, the time a call can be made, the hours a tax agent may visit you, making threats (not to be confused with the obligation that the IRS has to warn you of potential enforcement actions), and not contacting you directly after you have hired legal representation.

3. Right to professional and courteous service

When you contact the IRS, you should be treated in a professional and courteous way. Remember though, the IRS holds all the cards. In other words, don't call up the IRS with a chip on your shoulder the size of a cinder block, use abusive speech or a sardonic tone, and then expect the IRS to coo and purr on the other end. Respect the agent and the extremely difficult job they do.

4. Right to representation

The IRS is more than willing to work with any individual you appoint to handle a tax matter on your behalf.

According to the IRS, your representative must be a person allowed to practice before the Service, such as an attorney, certified public accountant, or enrolled agent. If you are in an interview and ask to consult such a person, then the IRS must stop and reschedule the interview in most cases.

You can have someone accompany you at an interview. You may make sound recordings of any meetings with IRS examination, appeal, or collection personnel, provided you tell them in writing 10 days before the meeting. The same is true for recording phone contacts.

5. Right to pay only what is owed

This should go without saying, but the IRS will not demand that you pay an amount that has not been lawfully assessed. You may not understand why you owe, and or you may not agree with the tax balance, but if it was legally established and you cannot or will not show evidence that it is incorrect, it must be paid.

There are many options however if you cannot make a full payment. Monthly payment plans are available. You may be eligible to offer a reduced amount. Your balance could be considered currently not collectible due to financial hardship. Contact the IRS for these and other options.

6. Right to be assisted with unresolved tax problems

In addition to the options the IRS makes available for tax relief, the Office of the Taxpayer Advocate is available for specialized assistance with complex or unresolved tax problems.

Your local Taxpayer Advocate can offer you special help if you have a significant hardship as a result of a tax problem. For more information, call toll free at 1'"877'"777'"4778.

7. Right to appeals and judicial review

The IRS has multiple levels of appeals available. The two main appeal programs of the IRS are Collection Due Process and the Collection Appeals Program. These levels of appeal cover everything from the IRS intent to take collection action, to the filing of levies and liens, to the termination of installment plans.

8. Right to relief from certain penalties and interest

If a balance was caused by IRS error or if you show it was the result of direct IRS advice, penalties and interest will be waived. Additionally, if your tax is refigured, all penalty and interest must be reduced and refigured based on the lower amount of tax owed.

If extenuating circumstances like a fire, flood or severe medical issue have prevented you from filing or paying on time, you may be eligible for relief.

More from this Contributor:

Do I qualify for Taxpayer Advocate assistance?

What is an IRS Collection Due Process appeal?

How to appeal an IRS notice