The Taxpayer Bill of Rights - Part 1
When you open a Self Directed IRA,
one of the great side benefits is getting educated about tax law. You find out
how retirement benefits work, the ins and outs of Prohibited Transactions, and different
applications of filing. What happens, though, when the system breaks down? We’ve
all felt general annoyance with the IRS, but what do you do when the problems
get real and specific? In a somewhat surprising turn, the IRS has made a big
push in recent years to become more transparent, user friendly, and give tax
payers workable tools. This ethos has permeated the attitude at the IRS and it
produced the Taxpayer
Bill of Rights. This is a list of rights that the IRS states all taxpayers
are entitled to. Here are the first five:
1.
The Right to be Informed
– Traditionally taxpayers have always been in a fog about tax law and
procedures. It’s a dense and confusing field that was generally left for those
with accounting backgrounds. To counter this, the IRS has placed an emphasis on
clarity and has produced a lot of user friendly content.
2.
The Right to Quality
Service – We’ve all had the experience of trying to call the IRS and quickly
getting frustrated with the lack of success. To counter this notion, the IRS
has done a lot of great work in promoting alternative points of contact and
staffing them appropriately.
3.
The Right to Pay No More
Than the Correct Amount of Tax – Mistakes happen, even by the best of bureaucrats.
Taking this as a given, the IRS has become more receptive to claims of mistaken
tax liability.
4.
The Right to Challenge
the IRS’s Position and Be Heard – In paperwork heavy environments, there is
a tendency for individual claims to get lost in the crowd. The IRS now
guarantees timely responses, a review of any submitted materials, and a
response as appropriate.
5.
The Right to Appeal an
IRS Decision in an Independent Forum – Taxpayers are given the right to
pursue their claims in the general court system. Included in this right is
access to the initial decision from the Office of Appeals.
Obviously none of these rights
will ever make paying taxes something to look forward to, but at least they give
the American public the transparency they need. Next time we’ll discuss the
next five rights, and then conclude with practical applications.