1. The Right to Be Informed. Taxpayers have the right to know what they need to do 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 be informed of IRS decisions about their tax accounts and to receive 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, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.
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, and to have the IRS apply all tax payments properly.
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.
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.
6. 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 or collect a tax debt. Taxpayers have the right to know when the IRS has finished 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, and will respect all due process rights, including search and seizure protections, and will provide, where applicable, a collection due process hearing.
8. 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 appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer 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 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.
The Coronavirus Aid, Relief and Economic Security Act (The CARES Act) includes several temporary tax law changes to help charities. This includes the special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing their deductions.
This change allows individual taxpayers to claim a deduction of up to $300 for cash donations made to charity during 2020. This deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.
Before making a donation, taxpayers should check the Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax deductible donations.
Cash donations include those made by check, credit card or debit card. They don’t include securities, household items or other property. Though cash contributions to most charitable organizations qualify, some don’t. People should review Publication 526, Charitable Contributions for details. Cash contributions made to supporting organizations are not tax deductible.
IRS Tax Tip 2017-53, October 3, 2017
Taxpayers who get an unexpected or unsolicited phone call from the IRS should be wary – it’s probably a scam. Phone calls continue to be one of the most common ways that thieves try to get taxpayers to provide personal information. These scammers then use that information to gain access to the victim’s bank or other account.
When a taxpayer answers the phone, it might be a recording or an actual person claiming to be from the IRS. Sometimes the scammer tells the taxpayer they owe money and must pay right away. They might also say the person has a refund waiting, and then they ask for bank account information over the phone.
Taxpayers should not take the bait and fall for this trick. Here are several tips that will help taxpayers avoid becoming a scam victim.
The real IRS will not:
- Call to demand immediate payment
- Call someone if they owe taxes without first sending a bill in the mail
- Demand tax payment and not allow the taxpayer to question or appeal the amount owed
- Require that someone pay their taxes a certain way, such as with a prepaid debit card
- Ask for credit or debit card numbers over the phone
- Threaten to bring in local police or other agencies to arrest a taxpayer who doesn’t pay
- Threaten a lawsuit
Taxpayers who don’t owe taxes or who have no reason to think they do should follow these steps:
Taxpayers who think they might actually owe taxes should follow these steps:
- Ask for a call back number and an employee badge number.
- Call the IRS at 1-800-829-1040.
Every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are the Taxpayer Bill of Rights. Taxpayers can visit IRS.gov to explore their rights and the agency’s obligations to protect them.
As most taxpayers know, the IRS generally does not have unlimited time to assess income tax against them. In most cases, section 6501(a) establishes a three-year limitations period for assessment. However, there are several exceptions to this general rule. Section 6501(c)(1), for example, provides an exception for ‘‘false or fraudulent return[s] with the intent to evade tax.’’ For those returns, the assessment period remains open indefinitely and the IRS can assess tax at any time.
…the IRS has recently taken the position that the intent can be either that of the taxpayer or the preparer.
Court decisions have created a divide on whether the requisite intent to evade tax under section 6501(c)(1) is that of the taxpayer, the preparer, or, oddly enough, the return itself.1 Although the statute is silent about whose intent controls, the IRS has recently taken the position that the intent can be either that of the taxpayer or the preparer.2 Not surprisingly, taxpayers with no knowledge that their preparers made fraudulent returns with the intent to evade tax have argued that they should not be subject to open-ended assessments for wrongful acts committed by the preparers.3
This report details the history of the unlimited assessment period for false or fraudulent returns and examines the code’s definition of fraud since 1918. It analyzes recent and not-so-recent IRS chief counsel advice and court decisions on the issue of whose fraud is relevant for the application of section 6501(c)(1). It also looks at the fairness and due process concerns that arise when taxpayers are penalized for acts committed by their return preparers.4 Finally, it concludes that taxpayers should not bear responsibility for fraudulent acts of their preparers absent evidence of actual involvement or knowledge on the part of the taxpayer.5
Kelly A. McGinnity is a partner at Schlack & McGinnity PC. This report was adapted from a research paper prepared for the tax LLM seminar at Loyola University Chicago School of Law.