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Taxpayer Rights: Understanding Your Options with IRS Notices

Feb 12, 2024

The Internal Revenue Service (IRS) plays an integral role in administering the United States’ tax system. As the nation’s tax collection agency, the IRS routinely interacts with taxpayers by sending notices that communicate needed actions, request additional information, or convey adjustments made to tax returns. Receiving correspondence from the IRS can feel daunting, but being informed about your rights and options can help you address any tax issues efficiently.

Your Taxpayer Bill of Rights

In 2014, the IRS adopted the Taxpayer Bill of Rights to enumerate ten fundamental rights afforded to all taxpayers. Understanding these constitutionally-based protections is essential to managing IRS matters effectively. Key rights include:

  • The Right to Quality Service: Taxpayers are entitled to prompt and courteous assistance from IRS representatives who adhere to tax law competency standards and ethical codes of conduct.
  • The Right to Pay No More than the Correct Amount of Tax: Taxpayers are not obligated to pay more tax than legally required, including interest and penalties. The IRS must properly apply payments made.
  • The Right to Appeal an IRS Decision: Taxpayers can bring disputes before an independent forum, like the U.S. Tax Court, providing critical oversight of IRS rulings.

Navigating IRS Notices

Don’t panic. While receiving IRS correspondence can feel jolting, avoid reacting hastily. Carefully read notices to understand specifics. Seek clarification if unsure. Meet deadlines to halt escalations. Below are best practices when handling notices:

  • Thoroughly Read the Notice: IRS notices explain reasons requests are being made and how information will be utilized. Understand implications of non-compliance.
  • Leverage Available IRS Resources: Contact IRS hotlines or visit local offices to discuss concerns, access your records or request penalty abatement or payment plans.
  • Seek Expert Assistance When Needed: For complex tax matters, leverage IRS services like the Taxpayer Advocate Service. Hire tax professionals to represent your case.

Common IRS Notices

While the variety of IRS notices is vast, some common notices include:

  • Notice of Deficiency: Indicates the IRS has determined a tax deficiency which allows the taxpayer to petition the U.S. Tax Court or pay and file a claim.
  • Notice of Underreported Income: Signals a discrepancy between income amounts reported by the taxpayer versus third party reports like W-2s. Requires the taxpayer to reconcile or face examination.
  • Notice of Intent to Levy: Warns the IRS may seize assets like wages or bank accounts if unpaid liabilities are not addressed by a specified date.

Navigating Complex Tax Matters

For intricate tax disputes, understanding available procedural avenues is vital. Options include:

  • Filing an Appeal: Taxpayers can administratively appeal some IRS findings or collection actions to the IRS Office of Appeals for review.
  • Litigating in U.S. Tax Court: Taxpayers have the right to impartial judicial oversight by filing petitions in U.S. Tax Court in response to notices of deficiency or lien filings.
  • Requesting Settlement Options: In some cases, taxpayers can settle tax debts for lesser amounts through Offer-in-Compromise requests based on doubt over liability or inability to fully pay amounts owed.

Partnering with Representation

Seeking qualified tax representation provides significant advantages when managing sophisticated IRS interactions. Key benefits include:

  • Expertise Interpreting Complex Rules: Representatives have extensive knowledge in specialty disciplines like business taxation, trusts, and international matters.
  • Objective Guidance on Resolution Options: Experts educate taxpayers on risks/benefits of remedies like filing appeals, requesting settlements, or going to court.
  • Direct Negotiations with the IRS: By law, enrolled agents, CPAs and tax attorneys can correspond with the IRS, advocate for the taxpayer and help achieve optimal outcomes.

Receiving notices from the IRS can undoubtedly feel intimidating. However, understanding your fundamental rights as a taxpayer along with proactively leveraging IRS resources and qualified representation helps remedy such situations effectively. Addressing requests soberly while utilizing informed counsel reduces stress. With the proper perspective and partnerships, taxpayers can navigate IRS interactions knowledgeably.

At Sareen & Associates, Inc., our team of highly qualified tax attorneys and CPAs has over 30+ years of experience successfully representing clients in complex tax disputes with the IRS. If you have received a concerning notice from the IRS or are currently entangled in a tax controversy, contact our professionals today for a free initial consultation. Our experts will review your situation, explain your rights and options, and provide skilled guidance tailored to your circumstances. With extensive expertise in negotiation and litigation, we help clients facing audits, appeals, liens and levies to achieve optimal outcomes. Don’t delay – call 703-366-3444 now to schedule a risk-free meeting with our attorneys so we can start developing an action plan to resolve your IRS tax matter.

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