Taxpayer Bill of Rights

The Taxpayer Bill of Rights (TBOR) was enacted to help protect taxpayers from abuses by the Internal Revenue Service (IRS) and to ensure that taxpayers are treated fairly and with respect in their dealings with the IRS.

The TBOR was introduced by the IRS in 2014 as part of a broader effort to improve the agency’s relationship with taxpayers and to address concerns about the agency’s practices and procedures. The TBOR provides a set of 10 basic rights that taxpayers can expect when dealing with the IRS, including the right to be informed, the right to quality service, the right to privacy, and the right to challenge the IRS’s position and be heard.

The TBOR is designed to provide greater transparency and accountability in the IRS’s operations and to help taxpayers better understand their rights and responsibilities under the tax laws. The TBOR also helps to ensure that the IRS is held to a high standard of fairness and professionalism in its dealings with taxpayers, and that taxpayers have access to the information and resources they need to comply with their tax obligations.

What are the Rights?

The Taxpayer Bill of Rights is a set of 10 rights that the IRS (Internal Revenue Service) must abide by when dealing with taxpayers. These rights are as follows:

1. The Right to Be Informed: Taxpayers have the right to know what they need to do to comply with tax laws.
2. The Right to Quality Service: Taxpayers have the right to receive prompt, courteous, and professional assistance from the IRS.
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.
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.
5. The Right to Appeal an IRS Decision in an Independent Forum: Taxpayers have the right to appeal most IRS decisions to an independent forum, such as the Office of Appeals.
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.
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.
8. The Right to Confidentiality: Taxpayers have the right to expect that their tax information will be kept confidential.
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.
10. The Right to a Fair and Just Tax System: Taxpayers have the right to expect the tax system to consider all facts and circumstances that might affect their tax liabilities, ability to pay, or ability to provide information timely.

Remedies Under TBOR

If a taxpayer’s rights have been violated by the IRS, the taxpayer has several remedies available to them.

Firstly, the taxpayer can file a complaint with the IRS’s Office of Appeals or the Treasury Inspector General for Tax Administration (TIGTA) and seek a resolution to the issue.

Additionally, if the taxpayer has suffered financially due to the IRS’s violation of their rights, they may be eligible for damages. In such cases, the taxpayer may file a lawsuit against the IRS in the U.S. District Court, seeking monetary compensation.

Moreover, the taxpayer can also seek assistance from taxpayer advocacy groups or a tax professional who can represent them in their dealings with the IRS and help them protect their rights.

It is crucial to note that the IRS has established the Taxpayer Advocate Service (TAS), an independent organization within the IRS that provides free assistance to taxpayers facing financial difficulties, experiencing systemic IRS issues, or seeking assistance in resolving tax-related problems. The TAS can also help taxpayers whose rights have been violated by the IRS.

Court Cases Involving the TBOR

There have been court cases where taxpayers have successfully used the Taxpayer Bill of Rights (TBOR) to challenge the IRS’s actions.

For example, in the case of Bobrow v. Commissioner, the taxpayer used the TBOR to argue that the IRS had violated his right to be informed when it disallowed his IRA contribution based on an interpretation of the tax code that was contrary to the IRS’s own published guidance. The taxpayer argued that he had relied on the IRS’s published guidance in making his contribution, and therefore the IRS’s actions were arbitrary and capricious. The Tax Court agreed with the taxpayer and ruled in his favor.

In another case, Kasper v. Commissioner, the taxpayer successfully argued that the IRS had violated his right to a fair and just tax system by failing to consider his financial hardship in assessing his tax liability. The taxpayer had provided evidence of his inability to pay the full amount of tax owed, but the IRS had failed to consider his financial circumstances in making its determination. The Tax Court agreed with the taxpayer and ordered the IRS to consider his financial circumstances in reassessing his tax liability.

These cases demonstrate that the TBOR can be a powerful tool for taxpayers to protect their rights and challenge the IRS’s actions when those rights have been violated. However, it is important to note that the success of a case will depend on the specific facts and circumstances involved, as well as the legal arguments presented.