Across Texas and other states, individuals and businesses face tax audits each year. Facing an audit, and the possibly resulting levies or other collection activity, can be frightening. Despite the power of the Internal Revenue Service, taxpayers have rights when it comes to an audit. In fact, a list of those rights and a document explaining those rights are published by the Internal Revenue Service.
Two of the first items on the taxpayer’s rights list relate to the way the IRS and its agents treat you and your case. First, IRS employees must treat taxpayers in a courteous, professional way. Employees must also hold information about each taxpayer confidential and work to protect taxpayer privacy. Given these rights, IRS agents aren’t allowed to phone employers, relatives or friends and discuss details regarding your tax account.
Taxpayers also have a right to understand why the IRS is seeking information from them and how that information will be used by the agency. If the taxpayer disagrees with a decision or statement made by the IRS — including a decision about the amount of tax owed — the taxpayer has a right to appeal. Appeals are handled internally within the agency as well as in the courts.
Finally, taxpayers — both businesses and individuals — have a right to representation. Though the taxpayer has a right to represent himself or herself, the right also extends to an authorized representative, which could include an accountant or a tax attorney. In some cases, an authorized representative may be able to negotiate a more successful solution with IRS representatives through an in-depth understanding of the law and a lack of emotional involvement in the proceedings. Representatives may work to prove doubt as to liability or negotiate affordable payment plans.