Taxpayers Have a Right to Challenge IRS Positions

While getting ahold of the IRS right now might seem like an impossible challenge, the customer service issues caused by the COVID-19 pandemic don’t change the fundamental rights that all taxpayers have. Today, the IRS issued Tax Tip 2020-171, reminding taxpayers of their rights to challenge any position the IRS takes in regards to their tax matters. In addition, the IRS reminds Americans that they have the right to be heard. Again, it may not quite feel like it right now, with the increased difficulty in getting through to the IRS and actually be heard, but it is still a right that all taxpayers have.

As outlined in the Taxpayer Bill of Rights, taxpayers have the right to:

  • Raise objections.
  • Provide additional documentation in response to formal or proposed IRS actions.
  • Expect the IRS to consider their objections timely.
  • Have the IRS consider any supporting documentation promptly.
  • Receive a response if the IRS does not agree with their position.

With the current mail backlog running an estimated 3 million pieces of mail, and phone line hold times exceeding two hours on many days, it’s more difficult than ever for the IRS to meet the customer service expectations they’ve set, and that you expect. This issue is not falling on deaf ears at the Service, nor has it gone unnoticed by Congress. Over the past few months, the IRS has hired a few hundred new customer service agents, and has a couple hundred openings right now for seasonal/temporary positions in an effort to resolve some of these issues.

Challenging IRS Positions

Here are some specific examples illustrating a taxpayer’s right to challenge the IRS’s position.

In some cases, the IRS will notify a taxpayer that their tax return has a mathematical or clerical error. If this happens, the taxpayer will be provided a 60 day period in which to tell the IRS that they disagree. In response, the taxpayer should provide copies of any record that may assist the IRS in correcting the error. The taxpayer may call the number listed on the IRS notice for assistance, and also has the right to retain representation to act on their behalf. If the IRS upholds the taxpayer’s assertion, taxpayers should expect the Service to make timely corrections to their accounts.

But what happens if the IRS doesn’t agree with your challenge?

In such a situation, the IRS will send another notice that proposes a specific adjustment to the tax bill. This will always come in the mail, as IRS always initiates such actions with mail (not by phone at first). You have a right to again challenge the change, which may involve going to Tax Court. You must file a tax court petition within 90 days of the notice date, or 150 days if it is addressed to a foreign address.

In addition, taxpayers can submit documentation and raise objections during an audit. If the IRS does not agree with the taxpayer’s position, the agency issues a notice explaining why it is increasing the tax. Prior to paying the tax, the taxpayer again has the right to take the case to Tax Court and challenge the government’s decision.

Depending upon the situation, the IRS may also be legally required to provide you with a hearing in front of the Independent Office of Appeals. This most commonly occurs before enforcement action can be taken to collect on a tax debt, such as the filing of a tax lien, garnishment of wages, and seizure of funds in a bank account. If Appeals doesn’t get you anywhere, you again have the opportunity to take your case to Tax Court.

Regardless of the situation, always remember that you have rights, and the IRS is required to respect them. When in doubt, obtain professional representation to protect yourself.