The IRS has grouped all Taxpayer rights under the law into the Taxpayer Bill of Rights (Publication 1). Within this bill of rights includes the right to retain IRS representation if audited or contacted by the IRS. However, the majority of taxpayers have never been audited or even contacted by the IRS so what does this mean? What does it mean to you – unaudited taxpayers – and what do you need to know if and when you are contacted or audited by the IRS in the upcoming tax years?
In this, we will outline certain materially important things you need to know if contacted and or notified of an audit by the IRS with the most important tenant being the knowledge that every Taxpayer has the right to elect representation in the form of a CPA, Attorney and/or Enrolled Agent on top of whom might have prepared your tax return for the audit.
Every Taxpayer has the right to retain an authorized representative of their choice to represent them in their dealings – calls, interviews, e-mails, faxes, correspondence, etc. – with the IRS no matter the division. Taxpayers can submit Form 2848 or Form 8821 to notify the IRS that you are electing to be represented by the selected tax professional listed and that you authorize and more importantly explicitly direct the IRS to contact and interact with the outlined tax professional in all tax matters involved. You can request Form 2848 or Form 8821 from your return preparer or your local tax professional. Or you can also secure a copy for your files or planned submission to the IRS here and/or here. And a copy of Publication 1 here.
In summary, you have the following Taxpayer rights:
- Right to be Informed
- Right to Quality Service
- Right to Pay No More than the Correct Amount of Tax
- Right to Challenge the IRS Position
- Right to Appeal an IRS Decision
- Right to Finality
- Right to Privacy
- Right to Confidentiality
- Right to Retain Representation
- Right to Fair and Just Tax System
For this edition, let’s focus on the Right to Retain Representation. The IRS summarizes the right to elect or retain representation this way, “Taxpayers have the right to retain an authorized representative of their choice to represent them in (all) their (taxpayer) dealings with the IRS.” Let’s better highlight what this means in effect:
- Taxpayers have the right to have an authorized representative interview with the IRS in place of the Taxpayer.
- Taxpayers, if interviewing with the IRS in person or over the phone, have the right to end the interview and further notify the IRS the Taxpayer is stopping the interview in good faith and electing tax representation. With this, the IRS has no basis to immediately penalize or financially harm, fine the Taxpayer at stoppage.
- Any authorized representative being a CPA, Enrolled Agent, Tax Attorney, etc., who is not disbarred or suspended from representing in front of the IRS, may submit a written Power of Attorney to represent the Taxpayer.
- Taxpayers have the right to seek assistance from the Low Income Taxpayer Clinic (“LITC”) if they cannot afford to elect representation; moreover, Taxpayers can also consult with the Taxpayer Advocate, generally located in every local IRS office, before and/or during an ongoing audit on top of the right to appeals. Of note, the LITC is independent of the IRS and the Taxpayer Advocate Service. See Publication 1, further.
- Lastly, and importantly, Taxpayers have the right to a Fair and Just Tax System as outlined by the IRS, in summary, by stating, “Taxpayer have right to expect the tax system (the IRS) to consider facts and circumstances that might affect their underlying (tax) liabilities, ability to pay, or ability to provide information timely.” If you have been contacted or audited by the IRS and feel you have not been granted the right of a timely and or just tax system via an IRS audit or IRS tax deficiency notice(s), please feel free to contact us. We would love to help.
I hope anyone reading this never has to go through an IRS audit which, in my experience, tends to happen at the most inopportune and lowest-of-lowest times in taxpayers’ lives, unfortunately. However, as we have outlined here, it is only best that if contacted by the IRS for audit or otherwise you should fully understand your rights. Moreover, the impression I get with the upcoming years is that IRS audits in the form of tax deficiency letters and other correspondence will be more substantial due to the financially unfortunate tax year. Therefore, more and more Taxpayers will be receiving IRS letters, notices, and should be fully aware of their rights.
I hope these general tenants of your rights as an American Taxpayer has made you more astute in this matter. For a more comprehensive list and more detailed explanations of the Taxpayer Bill of Rights, you can utilize this resource to further explore those rights, if ever needed. Moreover, if you’ve been contacted by the IRS and your CPA or return preparer or you self-prepared your tax return(s) and do not have a good understanding of what has raised the IRS suspicion(s) of your tax return, please feel free to call us directly at Strothman and Company, ask for me and I will be more than willing to confer or assist in any way I can, no matter if you are a current client or not. Please call if you need help!
Dustin Wells, EA
Strothman and Company