Taxpayer Bill of Rights: What is it and why should you care?

When dealing with the Internal Revenue Service, a list of the protections are made available to all taxpayers called the Taxpayer Bill of Rights. The bill was passed by the Congress in 1988 and have updated it in 1996 with the passage of the Taxpayer Bill of Rights II.

The Taxpayer Bill of Rights II states that taxpayers are entitled to the following:

• The IRS must provide an explanation to the taxpayer and send a 30 days’ notice before the agency alters, modifies, or terminates an agreement taxpayers have to their taxes in installments.
• Taxpayers must receive an abatement of interest if the IRS delays your case or unreasonable errors are made as a result of records loss, transferring personnel or working with IRS personnel who leave for extended illnesses, training, or time off.
• Depending on the amount owed, taxpayers have the right to receive 10 business days to 21 calendar years to meet any demands for tax payment by the IRS without needing to pay interest penalties.
• In order to switch from married filing separately to married filing jointly, taxpayers can postpone making a full-time payment of tax. The IRS is required to disclose whether it has attempted to collect from the spouse, how it has tried to collect and what it has collected if the IRS has tried to collect taxes from an estranged spouse.
• If the IRS filed the IRS liens prematurely, not according to a procedure or after the taxpayer has entered into an installment agreement, taxpayers can have them withdrawn. To facilitate the collection of tax or “would be in the best interests of both the taxpayer (as determined by the Taxpayer Advocate) and the Government”, the IRS must also withdraw a lien.
• Under the Bill of Rights, taxpayers have the right to get their property back such as their money if the IRS finds out that the levy was premature, the procedure wasn’t done accordingly or placed after the taxpayer in order to satisfy the levy entered into an installment agreement. The IRS must also facilitate collection of tax or "would be in the best interests of both the taxpayer (as determined by the Taxpayer Advocate) and the Government”, by returning the property. 
• You no longer need written approval from the IRS Chief Counsel if you want to get an office in compromise as long as the amount is under $50,000.
• If a person filed fraudulent W-2, 1099s, or other information returns about payments made to that person, taxpayers now have the right to sue under the Bill of Rights.
• If the IRS cannot prove its case against you, they are required to pay your attorneys’ fees.
• Another right taxpayers have is to collect up to $1 million from the IRS in any civil suits won by the taxpayer that shows "reckless or intentional disregard for guidelines by IRS employees in connection with the collection of a taxpayer's Federal tax."
• If a taxpayer is a volunteer, unpaid member of the board of trustees or board of directors, he can avoid most penalties imposed by the IRS on tax-exempt organizations. It is however required that you’re not participating in day-to-day financial activities of the charity.
• If the person is an enrolled agent, you can challenge a summon issued to your tax preparer. The summons must first be reviewed by the IRS Regional Counsel.
• If an IRS employee compromised the “determination of or collection of tax liability" in return for information about you, you may receive $500,000 from the IRS in a civil suit.
• If the IRS is not able to associate a payment you made with a balance you owe, they must do a reasonable effort to contact you within 60 days to discuss the matter.
• If you are a delinquent taxpayer, you have the right to receive an annual reminder notice of liability.
• Although verbal requests are still unacceptable, you can make non- written requests to the IRS.

To learn more about the Bill of Rights, you may download this file from the IRS:  http://www.irs.gov/pub/irs-utl/doc7394.pdf 

The Importance of Bill of Rights

When the IRS attempts to assess or collect taxes, the Taxpayer Bill of Rights ensures that taxpayers know what the IRS can and cannot do when doing so. Do not be among those people who do know what their rights are. You need to know your rights if you want to be protected yourself against possible abuse. This document is a guideline for all taxpayers and must be read with utmost diligence.