Your Taxpayer Rights if You Ever Get Audited by the IRS

There are 3 letters that strike fear into the hearts of Americans — I-R-S! And the very thought of being audited by them — usually turns into panic.

What you might not know is that back in the 1990’s, Congress passed the Taxpayer Bill of Rights Law, which places the burden of proof in tax disputes on the IRS – not the taxpayer.

However, there are some additional rights you have if you ever get that dreaded “audit notice” in the mail.

• You don’t have to meet with the IRS. You don’t have to meet with them face to face. Instead, you can conduct your “audit” through the mail. You avoid the stress of a personal meeting, the hassle of taking time off of work, or saying something that might be misconstrued by the auditor.
• You have the right to negotiate penalties. Of course, the IRS is not going to tell you this, but if you’ve filed your tax returns, acted in good faith and have not set out to deceive the IRS or dodge your tax liability, you can ask that any penalties be cancelled.
• You can appeal decisions made by the IRS. If you believe the tax liability and penalties are unfair or incorrect, you have 30 days to file an appeal. It could take years before your case is heard, but the “filing” date is the critical part of this process.
• You have the right to “installment” payments. If you do end up owing additional money, you can set up regular monthly payments with the IRS. Form 433A needs to be filed, listing your income, expenses, assets and liabilities. They will determine the monthly payment you need to make.
• You have the right to challenge IRS notices. Just a little under 50% of all IRS notices requesting more money from you are incorrect or incomplete. But they keep sending them because it has been shown that people would rather just pay the money than fight the IRS. Don’t take their word for it.
• You have the right to use a Taxpayer Advocate. If you feel you are getting the runaround or no one at the IRS is willing to help you, contact a taxpayer advocate. This is a division of the IRS to help citizens whose tax problems seem to be ignored. Visit the IRS website and you’ll find a link that says “Contact Your Advocate.” The service is free and it’s confidential.
• You have the right to make audio recordings when you meet. Yes, you can record the whole meeting, but you have to notify the IRS 10 days in advance.
• You have the right to represent yourself at an IRS audit. The tax code is complicated, and unless you are fairly competent about the specifics of your tax audit, you might want to hire an expert to help you. If you’ve had your tax returns prepared by a CPA, they will usually help with the audit meeting. If you end up in US Tax Court, hiring a tax expert is highly recommended.