July 07, 2019

Federal tax law is complicated, to put it lightly. Taxpayers routinely find themselves having difficulty understanding various provisions of tax laws and regulations. Congress has tried to help by creating the Taxpayer Bill of Rights (TABOR), which identifies ten key rights, and which serves as a directive to the Internal Revenue Service (IRS) Commissioner and all IRS employees.

The Taxpayer Bill of Rights

1. Information

Taxpayers have a right to know what tax laws and regulations affect them. To the greatest extent possible, the IRS has a duty to explain the Internal Revenue Code (IRC) and IRS regulations. It has met this duty through a truly impressive volume of publications, including instructions for every tax form.

2. Quality Service

This involves the right to prompt, polite, and helpful interactions with the IRS.

3. Paying the Correct Amount of Tax, and No More

Taxpayers have the right to a refund of any and all over-payments, and the IRS may not unreasonably delay paying those amounts back to taxpayers.

4. Challenges to IRS Positions and Actions

The IRS must consider any timely objection raised by a taxpayer, and must inform the taxpayer of any further decisions that it makes.

5. Appeal to an Independent Forum

Most IRS decision are subject to an appeal by an impartial administrative body. The Office of Appeals is an independent organization within the IRS, and the United States Tax Court is a tribunal established by Congress that exists separate from the IRS.

6. Finality

Taxpayers have a right to know the deadlines for challenging an IRS finding or appealing a decision, as well as the IRS’ deadline to complete an audit.

7. Privacy

Audits, collections, and other IRS actions must respect taxpayers’ due process rights and may only be as intrusive as is absolutely necessary.

8. Confidentiality

The IRS may not disclose personal information received from taxpayers to anyone, unless the taxpayer expressly authorizes it, or disclosure is allowed by law.

9. Representation

Taxpayers may choose a representative to advocate for their rights with the IRS.

10. A Fair and Just Tax System

The IRS and other tax authorities should consider equitable circumstances affecting individual taxpayers, such as financial or medical hardship, when determining how to proceed.

Legislation Establishing a Taxpayer Bill of Rights

Congress first attempted to create a TABOR in the Technical and Miscellaneous Revenue Act (TAMRA) of 1988. The final bill that was passed and signed into law did not have a full “bill of rights,” but it added several protections for taxpayers that would become part of the TABOR. For example, TAMRA created a cause of action for damages when the IRS pursues an unlawful collection action against a taxpayer, or wrongfully refuses or fails to release a lien.

In 1996, Congress passed a bill known as the “Taxpayer Bill of Rights 2.” It created the Office of the Taxpayer Advocate, which is charged with helping taxpayers resolve tax problems with the IRS, identifying tax laws and regulations that cause problems for taxpayers, and proposing legislative and administrative solutions to those problems.

The TABOR became an official part of U.S. law when Congress included it in the Consolidated Appropriations Act of 2016. The bill added the ten items that comprise the TABOR in § 7803(a)(3) of the IRC.

If you have tax-related questions in California, the tax advisors at Enterprise Consultants Group are available to help you understand your options. Please contact us online or at (800) 575-9284 today to discuss your case.