Your Rights as a Taxpayer
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Don't hold your breath waiting for the IRS to tell you this, but your rights go way beyond just "the right to remain silent!" They are rights which you should be prepared to put to use if the need ever arises. These rights can assure you that you will never become a tax collection statistic. Here are some of your most important rights.
1. The Right to Say "NO" to a Tax Auditor. Does the idea of saying "NO" to an IRS auditor terrify you? It shouldn't. The tax auditor never has any final authority over you in an audit. However as much as the auditor may huff and puff, you have the right to challenge his or her decision. When you do, the IRS' own statistics tell you will win your case about 64% of the time.
2. The Right to Eliminate Penalties. A common problem you may face is IRS penalties. The IRS has a penalty for every day of the week. In fact, they have penalties for every hour of every day of the week. There are over 150 different penalties contained in the tax law, and the IRS can find one to hit you with at every turn.
The good news is each penalty is subject to cancellation. The IRS generally "forgets" to tell you this (surprise, surprise). All penalties can be canceled when you can show you acted reasonably and in good faith and not out of an effort to deceive or mislead the IRS. In most cases, a simple letter of explanation setting out all the appropriate facts will do the job.
3. The Right to a "Correspondence" Audit. Do you dread the thought of facing the IRS in an audit? Do you crumble under pressure of when faced by an authority figure? Are you afraid you'll say something stupid or incorrect to an auditor? Our advice is simple. Don't go to the audit!
We're not telling you to hop the first plane to the Bahamas, but we are saying you have the right to a correspondence audit. That is nothing more than conducting your audit through the mail. You avoid the stress of a face-to-face meeting, the hassle, inconvenience and expense of taking time off work and the possibility you will say something that can be misconstrued by the agent. The correspondence audit involves submitting copies of your documentation to the agent via mail, together with letters of explanation on any legitimate question.
4. The Right to an "Installment" Agreement. Things can get ugly fast when you owe the IRS money. Their notices make it clear they want the money now—all of it. Unfortunately, they don't always explain your right to an installment agreement.
Get a copy of IRS Form 433-A, the Financial Statement. Complete it fully and accurately and submit it to the collection agent. The 433-A lists your income and expenses, assets and liabilities. From the statement, you can negotiate a reasonable installment payment based upon your ability to pay. Unfortunately, the IRS now charges a $43 "user fee" on installment plans. But, paying $43 is better than having to come up with money you don't have right now.
5. The Right to Challenge Notices. The IRS mails tens of millions of notices each year. They are almost always demands for more money. The good news is that you can challenge and cancel those notices if you disagree and act promptly, as we discuss later.
6. The Right to Use the Problems Resolution Office. One of the most frustrating aspects of dealing with a huge, often uncaring bureaucracy such as the IRS is it can be difficult to get even the most obvious errors corrected. If you are ever backed into a corner by the IRS and no one seems willing or able to help, contact the Problems Resolution Office (PRO). For more info go to IRS.gov.
The PRO was set up in 1988 to assist citizens whose problems seem to fall through the gaping cracks in the floor of the IRS' "We Care" Department. Simple problems, such as account statements and case status, can be handled with a phone call. Pressing problems such as improper payment demands or wage and bank levies should be addressed in writing with Form 911.
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