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Taxpayer Bill of Rights

In 2014 the IRS adopted a Taxpayer Bill of Rights as proposed by the former National Taxpayer Advocate Nina Olson. It applies to all taxpayers in their dealings with the IRS. The Taxpayer Bill of Rights groups the existing rights in the tax code into ten fundamental rights, and makes them clear, understandable, and accessible.

Taxpayer Bill of Rights

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1.

The Right to Be Informed

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
    Generally, Publication 3498, The Examination Process, or Publication 3498-A The Examination Process (Audits by Mail) is included with this letter.
  • 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.
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2.

The Right to Quality Service

Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to have a way to file complaints about inadequate service.

What This Means for You

  • The IRS must include information about your right to Taxpayer Advocate Service (TAS) assistance, and how to contact TAS, in all notices of deficiency. IRC § 6212(a)
  • When collecting tax, the IRS should treat you with courtesy. Generally, the IRS should only contact you between 8 a.m. and 9 p.m. The IRS should not contact you at your place of employment if the IRS knows or has reason to know that your employer does not allow such contacts. IRC § 6304
  • If you are an individual taxpayer eligible for Low Income Taxpayer Clinic (LITC) assistance(generally your income is at or below 250% of the federal poverty level), the IRS may provide information to you about your eligibility for assistance from an LITC. IRC § 7526
    For more information, see IRS Publication 4134, Low Income Taxpayer Clinic List. Or find an LITC near you.
  • Certain notices written by the IRS must contain the name, phone number, and identifying number of the IRS employee, and all notices must include a telephone number that the taxpayer may contact. During a phone call or in-person interview, the IRS employee must provide you with his or her name and ID number. RRA 98 § 3705(a)
  • The IRS is required to publish the local address and phone number of the IRS in local phone books. RRA 98 § 3709
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3.

The Right to Pay No More Than the Correct Amount of Tax

Taxpayers have the right to pay only the amount of tax legally due and to have the IRS apply all tax payments properly.

What This Means for You

  • 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.
  • If you are an individual taxpayer eligible for Low Income Taxpayer Clinic (LITC) assistance(generally your income is at or below 250% of the federal poverty level), the IRS may provide information to you about your eligibility for assistance from an LITC. IRC § 7526
    For more information, see IRS Publication 4134, Low Income Taxpayer Clinic List. Or find an LITC near you.
  • If you believe you have overpaid your taxes, you can file a refund claim asking for the money back, within certain time limits. IRC § 6402.
    See IRS Publication 17, Your Federal Income Tax under the heading “What if I Made a Mistake”
    See also IRC § 6511: Limitations on claim for credit or refund (statute of limitations) under the Right to Finality.
  • You may request that any amount owed be removed if it exceeds the correct amount due under the law, if the IRS has assessed it after the period allowed by law, or if the assessment was done in error or violation of the law. IRC § 6404(a)
    See also IRC § 6502: Limitations on collection after assessment (statute of limitations) under the Right to Finality.
  • You may request that the IRS remove any interest from your account that was caused by the IRS’s unreasonable errors or delays. For example, if the IRS delays issuing a statutory notice of deficiency because the assigned employee was away for several months attending training, and interest accrues during this time, the IRS may abate the interest as a result of the delay. IRC § 6404(e)
  • If you have a legitimate doubt that you owe part or all of the tax debt, you can submit a settlement offer, called an Offer in Compromise – Doubt as to Liability offer on Form 656-L. IRC § 7122
  • You will receive an annual notice from the IRS stating the amount of the tax due, which will help you check that all payments you made were received and correctly applied. IRC § 7524
  • 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)
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4.

The Right to Challenge the IRS’s Position and Be Heard

Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

What This Means for You

  • If you submit documentation or raise objections during an examination, and the IRS does not agree with your position, it will issue a statutory notice of deficiency explaining why it is increasing your tax, which gives you the right to petition the U.S. Tax Court prior to paying the tax. IRC § 6212
  • If you are an individual taxpayer eligible for Low Income Taxpayer Clinic (LITC) assistance(generally your income is at or below 250% of the federal poverty level), the IRS may provide information to you about your eligibility for assistance from an LITC. IRC § 7526
    For more information, see IRS Publication 4134, Low Income Taxpayer Clinic List. Or find an LITC near you.
  • If you are notified by the IRS that it has adjusted your return because of a mathematical or clerical error, you have 60 days to tell the IRS that you disagree. If the IRS is not persuaded, it will issue you a Statutory Notice of Deficiency proposing a tax adjustment. This notice provides you with a right to challenge the proposed adjustment in Tax Court by filing a petition within 90 days of the date of the notice (150 days if the notice is addressed to a person outside the United States), without first paying the proposed adjustment. IRC § 6213(b)
    For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • Immediately after the IRS files a notice of federal tax lien in the appropriate state filing location, the IRS must generally provide you with an opportunity for a hearing before an independent IRS Appeals/Settlement Officer. At that hearing, you can raise alternatives to the IRS’s collection action and may even be able to challenge whether you actually owe the tax. If you disagree with Appeals’ determination, you can go to Tax Court. IRC § 6320
    For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • Before the IRS takes its first enforcement action to collect a tax debt by levying, for example, your bank account, the IRS must generally provide you with an opportunity for a hearing before an independent IRS Appeals/Settlement Officer. At that hearing, you can raise alternatives to the IRS’s collection action and may even be able to challenge whether you actually owe the tax. If you disagree with Appeals’ determination, you can go to Tax Court. IRC § 6330
    For more information about the United States Tax Court, see the Court’s taxpayer information page.
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5.

The Right to Appeal an IRS Decision in an Independent Forum

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

What This Means for You

  • The Commissioner must ensure an independent IRS Office of Appeals that is separate from the IRS Office that initially reviewed your case. Generally, Appeals cannot discuss a case with the IRS unless you or your representative is given the opportunity to be present. RRA 98 § 1001(a)(4), Rev. Proc. 2012-18
    See IRS Publication 4227, Overview of the Appeals Process.
  • The IRS must ensure that an appeals officer is regularly available within each State.
    For more information on this provision, see the National Taxpayer Advocate’s 2014 Annual Report to Congress.
    Most Serious Problem: APPEALS: The IRS Lacks a Permanent Appeals Presence in 12 States and Puerto Rico, Thereby Making It Difficult for Some Taxpayers to Obtain Timely and Equitable Face-to-Face Hearings with an Appeals Officer or Settlement Officer in Each State
    Legislative Recommendation: ACCESS TO APPEALS: Require that Appeals Have At Least One Appeals Officer and Settlement Officer Located and Permanently Available within Every State, the District of Columbia, and Puerto Rico
  • If you do not agree with the proposed adjustment as a result of an examination (audit), you have the right to an administrative appeal. Statement of Procedural Rules, 26 C.F.R. § 601.103(b)
  • In certain situations, a taxpayer has the opportunity to request a conference with the Office of Appeals. Statement of Procedural Rules, 26 C.F.R. § 601.103(c)(1)
  • You have the right to request an independent review conducted by the Office of Appeals prior to the termination of your installment agreement. IRC § 6159(e)
  • 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. Thus, the statutory notice of deficiency is your ticket to Tax Court. IRC § 6212
    For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • To exercise your right to challenge the proposed adjustment in Tax Court without first paying the proposed adjustment, 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). IRC § 6213
    For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • In certain circumstances, the Office of Appeals has exclusive authority to settle your case. Generally, for the four months after you petition Tax Court, Appeals will be the only office within the IRS who can settle your case as long as the statutory notice of deficiency or other notice of determination was not issued by Appeals. Statement of Procedural Rules, 26 C.F.R. § 601.106
  • Generally, you are entitled to request a Collection Due Process hearing to dispute the first proposed levy action relating to a particular tax liability. The independent IRS Appeals/Settlement Officer conducting your hearing must have no prior involvement with the taxes the IRS is attempting to collect. If you disagree with the hearing officer’s determination, you can challenge it in Tax Court. IRC § 6330
    For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • If the IRS rejects your request for an offer in compromise asking the IRS to settle your tax debt for less than the amount owed, or a payment plan, called an installment agreement, then you may seek an independent review of the rejection with the IRS Office of Appeals. IRC § 6159(f) / IRC § 7122(e).
  • You can generally request that an issue you have not been able to resolve with the IRS examination or collection division be transferred to the Office of Appeals. For issues that are unresolved after working with Appeals, you may request non-binding mediation (where a neutral third party will help you try to reach a settlement) or binding arbitration (where you and the IRS will be bound by a third party’s decision). You may also request non-binding mediation or arbitration after unsuccessfully trying to enter into a closing agreement or offer in compromise. IRC § 7123
  • Generally, if you have fully paid the tax and your tax refund claim is denied or if no action is taken on the claim within six months, then you may file a refund suit in a United States District Court or the United States Court of Federal Claims. IRC § 7422
  • In very limited circumstances, you can ask a court to make a determination on certain tax issues prior to there being an actual dispute between you and the IRS. For example, a court may be able to determine whether an organization is tax-exempt or if a retirement plan is valid. IRC §§ 7428, 7476-7479
  • A jeopardy levy or assessment allows the IRS, in very limited circumstances, to bypass normal administrative safeguards and protections. For example, the IRS may issue a jeopardy levy if the IRS has knowledge that the taxpayer is fleeing the country. If the IRS makes such a jeopardy levy or assessment, you have the right to file a law suit and the court will determine whether the levy or assessment was reasonable under the circumstances and whether the amount is appropriate. IRC § 7429
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The Right to Finality

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year. Taxpayers have the right to know when the IRS has finished an audit.

What This Means for You

  • In order to timely challenge a statutory notice of deficiency in Tax Court, you must file your petition within 90 days of the date of the statutory notice of deficiency 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. If you do not timely file a petition, the amount proposed in the statutory notice will be assessed and you will receive a bill. IRC § 6213
    For more information about filing a petition, see the United States Tax Court’s taxpayer information page.
  • If you receive a notice proposing additional tax (statutory notice of deficiency), the notice must include the deadline for filing a petition with the Tax Court to challenge the amount proposed. IRC § 6213(a)
  • The IRS generally has three years from the date your return was filed to assess the tax. There are some limited exceptions to the 3-year rule, such as not filing a return or filing a fraudulent return. IRC § 6501
  • The IRS generally has ten years from the assessment date to collect unpaid taxes from you. However, there are a number of circumstances where the ten year collection period may be suspended, such as during the period when the IRS cannot collect, e.g., bankruptcy or a collection due process proceeding, or an offer in compromise is pending. IRC § 6502
  • If you believe you have overpaid your taxes, you can file a refund claim asking for the money back. Generally, you must file a refund claim within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. IRC § 6511
    See also IRC § 6402: Administrative claim for refund under the Right to Pay No More than the correct amount of tax.
  • If you or the IRS does not file a timely appeal, the decision of the U.S. Tax Court is final. IRC § 7481
  • Generally, you will only be subject to one examination per taxable year. However, the IRS may reopen a taxable year that has been previously examined if the IRS finds it necessary (e.g., there is evidence of fraud). IRC § 7605(b)
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The Right to Privacy

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and a collection due process hearing where applicable.

What This Means for You

  • During a Collection Due Process hearing, an independent IRS Appeals/Settlement Officer must consider whether the IRS’s lien filing balances the government’s need for the efficient collection of taxes with your legitimate concern that the IRS’s collection actions are no more intrusive than necessary. IRC § 6320
  • During a Collection Due Process hearing, an independent IRS Appeals/Settlement Officer must consider whether the IRS’s proposed levy action balances the government’s need for the efficient collection of taxes with your legitimate concern that the IRS’s collection actions are no more intrusive than necessary. IRC § 6330
  • The IRS cannot levy any of your personal property in the following situations: before it sends you a notice of demand, while you have a request for a payment plan pending, and if the IRS will not recover any money from seizing and selling your property. IRC § 6331
  • The IRS cannot seize certain personal items, such as necessary schoolbooks, clothing, undelivered mail, certain amounts of furniture and household items, and tools of a trade. IRC § 6334(a)
  • There are limits on the amount of wages that the IRS can levy (seize) in order to collect tax that you owe. A portion of wages equivalent to the standard deduction combined with any deductions for personal exemptions is protected from levy. IRC § 6334(d)
  • The IRS cannot seize your personal residence, including a residence used as a principal residence by your spouse, former spouse, or minor child, without first getting court approval, and it must show there is no reasonable alternative for collecting the tax debt from you. IRC § 6334(e) Treas. Reg. § 301.6334-1(d)(1)
    The revenue officer must attempt to personally contact you and if you indicate the seizure would cause a hardship, he or she must assist you in contacting the Taxpayer Advocate Service if not providing the requested relief. IRM 5.10.1.7.2
    The IRS issued interim guidance that extends these protections to suits to foreclose a lien on a principal residence. According to this guidance, the IRS should not pursue a suit to foreclose a lien on your principal residence unless it has considered hardship issues and there are no reasonable administrative remedies. See IRS Interim Guidance Memo SBSE-05-0414-0032.
  • As soon as practicable after seizure, the IRS must provide written notice to the owner of the property that the property will be put up for sale. Before the sale of the property, the IRS shall determine a minimum bid price. Before the property is sold, if the owner of the property pays the amount of the tax liability plus the expenses associated with the seizure, the IRS will return the property to the owner. Within 180 days after the sale, any person having an interest in the property may redeem the property sold by paying the amount the purchaser paid plus interest.IRC §§ 6335, 6337
  • If the IRS sells your property, you will receive a breakdown of how the money received from the sale of your property was applied to your tax debt. IRC § 6340
  • Under § 3421 of the Restructuring and Reform Act of1998 IRS employees are required “where appropriate,” to seek approval by a supervisor prior to filing a Notice of Federal Tax Lien. Section 3421 further requires that disciplinary actions be taken when such approval is not obtained. RRA § 98 3421
  • The IRS should not seek intrusive and extraneous information about your lifestyle during an audit if there is no reasonable indication that you have unreported income. IRC § 7602(e)
  • If you submit an offer to settle your tax debt, and the offer relates only to how much you owe (known as a Doubt as to Liability Offer in Compromise), you do not need to submit any financial documentation. IRC § 7122(d)(3)(B)
    For information, see Form 656-L, Offer in Compromise (Doubt as to Liability).
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The Right to Confidentiality

Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect the IRS to investigate and take appropriate action against its employees, return preparers, and others who wrongfully use or disclose taxpayer return information.

What This Means for You

  • In general, the IRS may not disclose your tax information to third parties unless you give it permission, e.g., you request that we disclose information in connection with a mortgage or student loan application. IRC § 6103
  • If a tax return preparer discloses or uses your tax information for any purpose other than for tax preparation, the preparer may be subject to civil penalties. If the disclosure or improper use is done knowingly or recklessly, the preparer may also be subject to criminal fines and imprisonment. IRC §§ 6713, 7216
  • Communications between you and an attorney with respect to legal advice the attorney gives you are generally privileged. A similar privilege applies to tax advice you receive from an individual who is authorized to practice before the IRS (e.g., certified public accountant, enrolled agent, and enrolled actuary), but only to the extent that the communication between you and that individual would be privileged if it had been between you and an attorney. For example, communication between you and an individual authorized to practice before the IRS regarding the preparation of a tax return is not privileged because there would be no similar privilege between a taxpayer and an attorney. The privilege relating to taxpayer communications with an individual authorized to practice before the IRS only applies in the context of noncriminal tax matters before the IRS, and noncriminal tax proceedings in Federal court where the United States is a party. IRC § 7525
  • In general, the IRS cannot contact third parties, e.g., your employer, neighbors, or bank, to obtain information about adjusting or collecting your tax liability unless it provides you with reasonable notice in advance. Subject to some exceptions, the IRS is required to periodically provide you a list of the third party contacts and upon request. IRC § 7602(c)
  • The National Taxpayer Advocate and Local Taxpayer Advocates may decide whether to share with the IRS any information you (or your representative) provide them regarding your tax matter, including the fact that you’ve contacted the Taxpayer Advocate Service. IRC § 7803(c)(4)(A)(iv)
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9.

The Right to Retain Representation

Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to be told that if they cannot afford to hire a representative they may be eligible for assistance from a Low Income Taxpayer Clinic.

What This Means for You

  • If you have won your case in court, under certain conditions, you may be entitled to recover certain reasonable administrative and litigation costs related to your dispute with the IRS. IRC § 7430
  • In most situations the IRS must suspend an interview if you request to consult with a representative, such as an attorney, CPA, or enrolled agent. IRC § 7521(b)(2)
  • You may select a person, such as an attorney, CPA, or enrolled agent to represent you in an interview with the IRS. The IRS cannot require that you attend with your representative, unless it formally summons you to appear. IRC § 7521(c)
  • If you are an individual taxpayer eligible for Low Income Taxpayer Clinic (LITC) assistance (generally your income must be at or below 250 percent of the federal poverty level), you may ask an LITC to represent you (for free or a minimal fee) in your tax dispute before the IRS or federal court. IRC § 7526
    For more information, see Publication 4134, Low Income Taxpayer Clinic List.
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10.

The Right to a Fair and Just Tax System

Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.

What This Means for You

  • If you cannot pay your tax debt in full and you meet certain conditions, you can enter into a payment plan with the IRS where you pay a set amount over time, generally on a monthly basis. IRC § 6159
    See TAS Toolkit, Installment Agreements.
  • You may request that any amount owed be eliminated if it exceeds the correct amount due under the law, if the IRS has assessed it after the period allowed by law, or if the assessment was done in error or violation of the law. IRC § 6404(a)
    See also IRC § 6502: Limitations on collection after assessment (statute of limitations) under the Right to Finality
  • You may request that the IRS remove any interest from your account that was caused by the IRS’s unreasonable errors or delays. For example, if the IRS delays issuing a statutory notice of deficiency because the assigned employee was away for several months attending training, and interest accrues during this time, the IRS may abate the interest as a result of the delay. IRC § 6404(e)
  • The time limit for asking for the taxes you paid to be refunded may be suspended during the time you are unable to manage your financial affairs due to a mental or physical health problem. IRC § 6511(h)
  • If you have acted with reasonable care you may be entitled to relief from certain penalties. Additionally, if you have a reasonable basis for taking a particular tax position, such as a position on your return or a claim for refund, you may be entitled to relief from certain penalties. Reliance on the advice of a tax professional can in certain circumstances represent reasonable cause for the abatement of certain penalties. IRC §§ 6651, 6656, 6694, 6662, 6676
  • If you use a return preparer who takes an unreasonable or reckless position that results in underreporting your tax, that preparer may be subject to penalties. IRC § 6694
  • You can submit an offer in compromise asking the IRS to settle your tax debt for less than the full amount if you believe (1) you do not owe all or part of the tax debt, (2) if you are unable to pay all of the tax debt within the time permitted by law to collect, or (3) there are factors such as equity, hardship, or public policy that you think the IRS should consider in determining whether to compromise your liability. IRC § 7122
    See page 289 of the RRA 98 Conference Report, H.R. Rep. No. 105-599 (Conf. Rep.).
  • If you have are experiencing a significant hardship because of IRS action or inaction, tax you may be eligible for assistance from the Taxpayer Advocate Service (TAS). A significant hardship occurs when a tax problem causes you financial difficulties or you have been unable to resolve your problem through normal IRS channels. You may also be eligible if you believe an IRS system or procedure isn’t working as it should. IRC § 7803(c)
  • You have the right to request that the Taxpayer Advocate Service issue a Taxpayer Assistance Order (TAO) on your behalf if you are experiencing a significant hardship. TAS can issue a TAO ordering the IRS to take certain actions, cease certain actions or refrain from taking certain actions, and it can also order the IRS to reconsider, raise to a higher level, or speed up an action. IRC § 7811
  • If you are trying to settle your tax debt with an offer in compromise based on your inability to pay, the IRS considers your income, assets, and expenses in deciding whether to accept your offer. Generally, the IRS uses guidelines for standard allowances for cost of living expenses, unless you will not able to pay your basic living expenses. Then, the IRS must consider your actual expenses. If you are offering to settle because you believe you don’t owe the tax liability, you will not need to submit financial information. IRC § 7122(d)(2)
  • If you are a low income taxpayer trying to settle your tax debt with an offer in compromise, the IRS cannot reject your offer solely on the basis of the amount offer. For example, it cannot reject an offer solely because the amount offered is so low it does not cover the IRS costs for processing the offer. IRC § 7122(d)(3)(A)
  • If you submit an offer to settle your tax debt, and the offer relates only to how much you owe (known as a Doubt as to Liability Offer in Compromise), the IRS cannot reject your offer solely because it cannot locate your tax return to verify how much you owe. IRC § 7122(d)(3)(B)
  • The IRS cannot levy (seize) all of your wages to collect your unpaid tax. A portion will be exempt from levy to allow you to pay basic living expenses. IRC § 6334
  • The IRS must release all or part of a levy and notify the person upon whom the levy was made if one of the following situations exist: 1) the underlying liability is satisfied or becomes unenforceable due to the lapse of time, 2) the taxpayer enters into an installment agreement, unless the agreement specifies otherwise, 3) the release of the levy will facilitate collection of liability, 4) the IRS determines the levy is creating an economic hardship for the taxpayer, or 5) the fair market value of the property levied is greater than the liability and releasing the levy on part of the property would not impair collection of the underlying liability. IRC § 6343(a)(1)
  • If you are an individual taxpayer eligible for Low Income Taxpayer Clinic (LITC) assistance (generally your income must be at or below 250 percent of the federal poverty level guidelines), you have the right to seek assistance from an LITC to ensure that your particular facts and circumstances are being considered by the IRS. IRC § 7526
    For more information, see Publication 4134, Low Income Taxpayer Clinic List.
  • 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.

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