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Representation Before the IRS and the Taxpayer Bill of Rights

Updated: Feb 13, 2021

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The Taxpayer Bill of Rights remains a cornerstone document that provides the taxpayers of the nation with fundamental rights pertaining to IRS dealings. Concurrently, the IRS would always want all taxpayers – young or old – to be conscious of these rights whenever they’re dealing with the agency.

There exists the right for taxpayers to retain an authorized representative of their choice to represent them before the IRS. Taxpayers have every right to request assistance from a Low-Income Taxpayer Clinic if they cannot afford representation.

I do tax resolution and IRS representation. I live in Orlando, and our main office is located here. I have a client in Miami who is being audited by the IRS. Miami is a four-hour drive from Orlando. Because of the particulars of the case, I couldn’t get the venue of the audit changed to Orlando. The revenue agent has to physically go through files that are located in my client’s office.

In early March, I was retained, and I called the revenue agent. I told the revenue agent that I had just gotten on the case and I needed time to prepare for our meeting. Verbally, she and I agreed to meet on March 29 and March 30 in Miami. The revenue agent stated that she would follow up our conversation with written confirmation, and she would also send me all of the information that my client provided her during their initial meeting.

The days went by, and I waited to receive confirmation from the revenue agent. On Friday, March 18, I received the information that my client provided the revenue agent at their initial meeting. On Monday, March 21, I called the revenue agent and left a message asking if the meeting in Miami was still happening, as I never received written confirmation. The revenue agent is a part-time employee and only works Monday through Wednesday. I didn’t hear anything from the revenue agent on Monday or Tuesday, so on Wednesday, I called again and left the same message. I told her that if I didn’t hear from her by the end of the day, I would cancel my trip to Miami. I didn’t hear from her, so I instructed my assistant to cancel my hotel reservations. The revenue agent is in the Tampa area, which is also about a four-hour drive to Miami.

On Monday, at 12:30 p.m., the revenue agent called my office and talked to my assistant. She stated that she had just gotten my messages and she was on her way to Miami, and wanted me to call her back. When I called her, I stated that she never gave me written notice of the appointment, which she was supposed to do. She stated that she didn’t have to notify me in writing of an appointment and told me, in no uncertain terms, that I had to be in Miami the following day at 9 a.m. I tried to meet her halfway by saying I could cancel my other appointments and meet with her on Wednesday or Thursday. She told me this was my fault, and I made the decision to cancel the appointment.

I did some research and came across Internal Revenue Code (IRC) §7603 that states I was to be notified in writing of the time and place of the examination. I called the revenue agent back and asked for her manager’s number. The revenue agent started looking up the number and said they had just changed numbers and she would have to call me right back with the new number. Forty-five minutes later, she called me with the name and number.

Obviously, she had called her manager and got reamed for not notifying me in writing. I called the manager, and his message stated that he was out in the field working and to leave a message. So, I left a message on his voicemail explaining the whole situation to him. I quoted IRC §7603 and asked for him to return my call.

At 8:30 p.m., I received a phone call from the Tampa area. I was talking with my son and thought I should probably listen to this message. The message was the manager stating that he, too, was in Miami and was very disappointed that I wouldn’t be there. I promptly called back, and when I told the manager who I was, he began yelling at me, stating that I was impeding an investigation. I stated that I was never notified in writing of the time or place of the examination, and I quoted IRC §7603. I then asked what he would do in the same situation. He told me that he would be down in Miami. The last thing he asked was if my client knew the appointment was never confirmed, and I told him that she did. He stated that he had called her and confirmed it himself. I said, “So, you went over my POA? You’re not supposed to do that either.” There was a long silence, and he said, “Have a great night, Mr. Smalley,” and hung up.

The 10 Rights of a Taxpayer

I am mentoring an intern as all of this is going on, and I asked the intern a question that we should all know the answer to: “Why are we ever hired to represent a client before the IRS?” My intern said, “So that they can get away with deducting things that might be questionable.” My answer to the intern was, “To protect our client’s rights.”

Anytime a taxpayer gets a notice of an audit, he or she will get Publication 1 with the notice. Publication 1 is entitled, Your Rights as a Taxpayer. If you’ve never read this publication, I suggest you take a look at it. Basically, your client has rights. 

From Publication 1, here are your client’s rights:

1. The right to be informed. Taxpayers have the right to know what is required to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to know about IRS decisions affecting their accounts and clear explanations of the outcomes.

2.The right to quality service. Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, and the freedom to speak to a supervisor about inadequate service. Communications from the IRS should be clear and easy to understand.

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, including interest and penalties. They should also expect the IRS to apply for all tax payments properly.

4.The right to challenge the IRS’s position and be heard. Taxpayers have the right to object to formal IRS actions or proposed actions and provide justification with additional documentation. They should expect that the IRS will consider their timely objections and documentation promptly and fairly. If the IRS does not agree with their position, they should expect a response.

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 certain penalties. Taxpayers have the right to receive a written response regarding a decision from the IRS Office of Appeals. Taxpayers generally have the right to take their cases to court.

6. The right to finality. Taxpayers have the right to know the maximum amount of time they have to challenge an IRS position and the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS concludes an audit.

7. 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. They should expect such proceedings to respect all due process rights, including search and seizure protections. The IRS will provide, where applicable, a collection due process hearing.

8. The right to confidentiality. Taxpayers have the right to expect that their tax information will remain confidential. The IRS will not disclose information unless authorized by the taxpayer or by law. Taxpayers should expect the IRS to take appropriate action against employees, return preparers, and others who wrongfully use or disclose their return information.

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 seek assistance from a Low-Income Taxpayer Clinic if they cannot afford representation.

10. The right to a fair and just tax system. Taxpayers have the right to expect fairness from the tax system. This includes considering all 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.

In her January address to Congress, National Taxpayer Advocate Nina Olson highlighted these rights and told Congress that taxpayers had to be more informed about their rights. The IRS responded with IRS Special Edition Tax Tip 2016-01, issued on Jan. 13, 2016.

Now that filing season is wrapping up, we’ll probably respond to a few IRS notices or maybe even do some representation. Don’t forget your client’s rights. It is important to know what the IRS can and cannot do.

Which brings me back to the story that I shared. The problem with the IRS is that it tries to exert itself over a taxpayer. My partner and I own our business, but my partner is not licensed and doesn’t have the years of experience that I have. When the revenue agent called, she started making arrangements, until I told her that I had to be notified in writing and I never was. She went right to work and found the IRC section. Had the agency done that to a taxpayer, that person would have been running all around trying to comply with something that he or she didn’t need to. That is why we are hired, for situations like the one I explained. I knew that I was right, and I wasn’t going to drive four hours and disrupt an entire week of my life because a revenue agent doesn’t know to confirm in writing.

Now that tax season is almost over, take some time and go over these rights. And make sure you are protecting your client.

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