IRS adopts “Taxpayer Bill of Rights”

The IRS on Tuesday released a “Taxpayer Bill of Rights” intended to better communicate to taxpayers their existing statutory and administrative protections.

Modeled after the U.S. Constitution’s Bill of Rights and a document of the Organisation for Economic Co-operation and Development, the 10 broad provisions were announced at a news conference at IRS headquarters in Washington by IRS Commissioner John Koskinen and National Taxpayer Advocate Nina Olson.
 
In meetings with the IRS’s employees nationwide since he became commissioner in December, Koskinen said, he had been impressed by their dedication to serving taxpayers and respecting their rights.

“But I also came to believe that we as an institution needed to do a better job of communicating taxpayer rights to the public and showing taxpayers how deeply we respect those rights,” Koskinen said.

For Olson, the document represents at least a seven-year-long legislative and administrative effort. Repeatedly since 2007 in her annual reports to Congress, Olson has recommended a taxpayer bill of rights. Legislation by that title has been introduced several times. A bill containing mostly the same language as that issued Tuesday, H.R. 2768, would incorporate a bill of rights into the Internal Revenue Code. It passed the House of Representatives in July 2013 but has failed so far to reach the floor of the Senate. Last year, in her annual report, Olson identified the lack of a bill of rights as the No. 1 most serious problem facing taxpayers and called upon the IRS to adopt one administratively. Her office drafted the document adopted Tuesday.

The IRS incorporated the rights into a new version of Publication 1, “Your Rights as a Taxpayer,” which accompanies IRS correspondence with taxpayers, including a large volume of notices now going out regarding tax year 2013 returns. Koskinen said the rights will also be posted in public areas of IRS offices and communicated to employees. The IRS also published a page on its website with the bill of rights. The Taxpayer Advocate Service that Olson heads also published webpages listing the rights and what Olson called “crosswalk” explanations, examples, and links to underlying provisions of the Internal Revenue Code, Internal Revenue Manual, and other source materials.
 
The rights are:

• The right to be informed;
• The right to receive quality service;
• The right to pay no more than the correct amount of tax;
• The right to challenge the IRS’s position and to be heard;
• The right to appeal an IRS decision in an independent forum;
• The right to finality (e.g., to know the maximum time for challenging an IRS position, for being audited, or when an audit is finished);
• The right to privacy (e.g., IRS compliance with laws and respect for due process in inquiries, examinations, enforcements, etc.);
• The right to confidentiality of information provided to the IRS;
• The right to retain representation; and
• The right to a fair and just tax system.

A survey by the Taxpayer Advocate Service in 2012 found that only 46% of U.S. taxpayers believed they had rights before the IRS, and only 11% knew what those rights were, Olson said.

“If you don’t know what your rights are, you will never avail yourself of those rights,” she said. On the other hand, she said, “An educated tax consumer is the most protected tax consumer.”

Koskinen and Olson said they would continue to also seek a legislative enactment of taxpayer rights. Koskinen said the document would also underscore his continuing advocacy for budgetary resources for the IRS to fulfill its protections.

—Paul Bonner (pbonner@aicpa.org) is a JofA senior editor.