What Are My Rights During an IRS Audit?

The Internal Revenue Service (IRS) has gained a scary reputation over the decades. But the IRS today is not the scary monster of the past. Today, taxpayers have certain rights when filing tax returns, communicating with the IRS, and going through an IRS audit. They are designed to protect taxpayers by affording them fundamental rights. Knowing and understanding your rights will help you protect and exercise them when working with the IRS.

What Are My Rights as a Taxpayer?

Americans have several rights afforded them by enacted laws. The Taxpayer Bill of Rights (TBOR) ensures taxpayers are afforded rights when paying their taxes. It was passed in 2015 and added to the much larger Tax Code. Within the TBOR are fundamental rights when working with the IRS. 

John Pontius, a top-rated tax attorney in Rockville, Maryland, discusses the importance of hiring an attorney to advocate for your rights. “As a tax attorney, the objective with audits is to keep the scope as narrow as possible on what the auditor was initially asking for and for the tax year that they were asking for. Sometimes, if issues arise, the auditor may expand to other areas of that tax return or may open the audit up to other tax years.”

1. Right to be Informed

As a taxpayer, you have a right to know what is required of you to comply with tax laws. You are entitled to clear explanations of the law, forms, and procedures. The tax code can be lengthy and confusing, so clear explanations are a must for compliance.  In addition, you have a right to be informed of decisions that the IRS makes about you and your accounts.

2. Right to Quality Service

No one should be spoken to disrespectfully. Taxpayers have a right to be spoken to by IRS employees in a clear and courteous manner. They should receive professional and direct communication. They also have a right to speak to a supervisor if they receive offensive or inadequate service.

3. Right to Pay No More than the Correct Amount of Tax

Having an income tax liability should be a clear amount. Taxpayers have a right to only pay the amount they owe. This will include interest and penalties. The IRS cannot endlessly assign additional tax debt. If you cannot pay all of your tax debt by the due date, you have a right to request an installment plan for which you can make monthly payments.

4. Right to Challenge the IRS’s Position and Be Heard

The IRS is not an all-powerful entity that has the final say in all decisions. Taxpayers have a right to challenge the IRS by appealing its decisions. When the appropriate documentation is provided, the IRS must promptly respond to the appeal with fair consideration.

5. Right to Appeal an IRS Decision in an Independent Forum

There can be an impression of unfairness when a taxpayer appeals to an IRS decision, and another department of the IRS reviews the appeal. To address this, taxpayers have a right to appeal an IRS decision to an independent forum. This ensures a fair and impartial party hears the appeal and considers each party’s documentation and position. Taxpayers can file their appeal with the Office of Appeals and file their case in tax court.

6. Right to Finality

A taxpayer has a right to know that the IRS has a limited amount of time to pursue tax debt and perform audits. This prevents taxpayers from being at risk of an audit or later assessed debt for any year they filed a tax return for the rest of their lives. A statute of limitations puts a deadline on the IRS’s actions. While a collection due process enables a taxpayer to challenge IRS actions.

7. Right to Privacy

Experiencing an audit can feel like an invasive process. The right to privacy protects taxpayers by affording them a certain level of privacy. An IRS agent must comply with all laws while performing their audits, inquiries, examinations, and enforcement. They shouldn’t be any more intrusive than necessary. This includes due process and search and seizure rights.

8. Right to Confidentiality

Getting audited by the IRS or having tax debt problems has negative societal connotations. Taxpayers have a right to keep their matters with the IRS private unless they authorize the disclosure.

9. Right to Retain Representation

Taxpayers do not have to face the IRS on their own. They have a right to authorized representation. They can choose to have a certified public accountant (CPA), tax attorney, or enrolled agent. Low-income taxpayers can contact the Low Income Taxpayer Clinic for assistance.

10. Right to a Fair and Just Tax System

No two individuals have the same set of facts impacting their situation. Because of this, they have the right to a fair and just tax system. The IRS must consider additional liabilities and circumstances that impact their ability to pay. While there are guidelines, a taxpayer can negotiate with the IRS to come to a fair agreement.

What Are My Rights During an IRS Tax Audit?

While all taxpayers enjoy fundamental rights, they have a special set of rights when going through an audit. The IRS will be taking a closer look at the taxpayer’s returns and filings, which can feel invasive, threatening, and scary. Having rights helps taxpayers advocate for themselves.

If an IRS agent, investigator, or employee violates those rights, a taxpayer can confidentially report that misconduct to the Treasury Inspector General for Tax Administration (TIGTA).

1. Right to Representation

When working with the IRS during a tax audit, taxpayers have the right to retain representation to advocate on their behalf. One option is to represent yourself. You can also choose to have someone represent you.

When choosing someone to represent you, they must be someone allowed and approved by the IRS. Pontius explains who can represent you during an audit. “Generally speaking, you have to be authorized to [represent someone] with the IRS. There are three main categories of professionals who would be authorized: An enrolled agent, a certified public accountant (CPA), or a tax attorney.”

If the IRS auditor requests an interview, you can have your representative there. If you start the interview without representation and decide you want it, you have a right to stop it. You can continue the interview at a later time with your chosen authorized representative. You are also able to make an audio recording of the interview. You just need to notify the IRS agent of your intentions at least ten days before the interview.

Unlimited Representation Rights

Certain professionals have unlimited representation rights granted by the IRS. Enrolled agents, certified public accountants, and tax attorneys are qualified. They have the necessary training and credentials to represent a client during payment issues, audits, and appeals.

Enrolled agents are licensed by the IRS and become certified through the Special Enrollment Examination. Certified public accountants are licensed by the state Board of Accountancy and have a degree in accounting. Tax Attorneys have earned a law degree and are licensed by the state court.

Limited Representation Rights

The IRS grants limited representation rights to some individuals who may not have the above-listed credentials. These individuals can only represent taxpayers who they assisted with the tax return preparation. They can only provide representation in front of customer service representatives, revenue agents, and similar IRS employees. They are not authorized to represent taxpayers whose tax returns they did not prepare. They also cannot represent taxpayers in audits or collection issues.

2. Right to Professional and Courteous Treatment

IRS employees should conduct themselves professionally and courteously and treat taxpayers with respect during the audit process. If an IRS employee acts unprofessionally or rudely, a taxpayer has the right to file a complaint with that employee’s supervisor. If the supervisor fails to respond adequately, a taxpayer can take their complaint further and file a complaint with the local IRS director.

3. Right to Privacy and Confidentiality

Taxpayers have a right to keep their tax matters confidential. The right to privacy ensures your private information is not shared outside of the IRS office. The only time the IRS may share private information is if the taxpayer authorizes it or if it is explicitly allowed by law.

4. Right to Know Why You Are Being Audited

Taxpayers have a right to know why they are getting audited. Whether the audit is in-person or by mail, the IRS must explain why it has decided that an audit is warranted. The audit notice you receive will explain why you are getting audited, the documents the IRS wants to inspect further, and the next steps you must take.

5. Right to Know Why the IRS is Asking for Information

A taxpayer has the right to ask the IRS why they are asking for information. You have a right to ask questions about what is going on with you and get answers. Generally, the IRS will include this information in its notices to give you the answer before you have to ask. For example, audit notice letters will include why a taxpayer is being audited and the information the IRS seeks.

6. Right to Appeal the IRS’s Decisions

The IRS will issue an examination report containing a determination, and if the taxpayer doesn’t agree, they have a right to appeal. This can be done through the Office of Appeals or in Tax Court. Taxpayers can appeal the amount of tax liability or the collection process related to the audit. An appeal must be done within 30 days of the official determination. While you have the right to appeal straight to the Tax Court, you may have more recovery rights if you go through the Office of Appeals process first. If the Office of Appeals cannot resolve the issue, you still have the right to file in Tax Court later.

Pontius highlights the importance of considering the potential consequences of pursuing an appeal of your audit. “Generally, the penalties are going to continue to accumulate. So, the best thing would be to try to substantiate as many positions as possible so that the audit goes as smoothly as possible. Another thing to think about is that once you have a tax bill, it’s going to go over to collection.”

Using the Taxpayer Advocate Service

Separate from the IRS is the Taxpayer Advocate Service (TAS). This independent organization helps taxpayers protect their rights and helps individuals who experience hardship due to their tax issues. For taxpayers who qualify, the TAS helps resolve issues that the taxpayer couldn’t resolve on their own.

How Do I Exercise My Rights in the Audit Process?

While it is good to know your rights, it is more important to know how to exercise those rights. At the beginning stages of the audit process, make your request for explanation and information in writing. If you are not treated professionally, don’t be afraid to request to speak with a supervisor.

During the audit process, retain representation from your chosen tax attorney or professional. Ask to record meetings, interviews, and sessions. This ensures you have an accurate record of statements.

After the audit, if you disagree with the IRS determination, file an appeal in writing. Attempt to resolve any disagreement through the appeals process. If you were unable to reach a settlement, then consider pursuing a legal case in one of these forums.

• United States Tax Court
• United States Court of Federal Claims
• United States District Court in the judicial district where you reside or have your principal place of business

Finding Experienced Legal Help

Taxpayers have fundamental rights when working with the IRS. These rights ensure they are able to file taxes, participate in the audit process, and appeal IRS decisions. Unfortunately, many taxpayers don’t know they have rights. Working with a tax attorney can help them protect their rights and advocate for themselves. Tax attorneys help their clients resolve tax issues with the IRS office.

Visit the Super Lawyers directory to begin your search for an experienced tax attorney. For more information, read our guides on tax law.