 Internal Revenue Service IRS Tax News. Start the New Year off by reviewing the Taxpayer Bill of Rights. Thanks for the suggestion IRS, but it's a long-standing tradition for Americans to spend the New Year trying to remember what happened on the last date of the prior year and then construct a detailed list of apologies for potential wrongdoings you may or may not have actually done while checking social media for any life-ruining posts posted by, quote, friends, end quote. However, sadly I spent the evening wondering why my fingers don't seem to work right when playing the guitar. The fingers you have used to dial are too fat. To obtain a special dialing wand, please mash the keypad with your palm now. So maybe I will look over the Taxpayer Bill of Rights. I mean, honestly, reading the Bill of Rights sounds more fun than actually paying the IRS Tax Bill. I'll tell you that. Yeah, I'm going to start sending my clients a Bill of Rights. You, dear client, have the right to pay this bill within 30 days and the right to remain silent, that second one being more of an obligation than a right. It's actually the foundational principle of the entire Democratic Party. IRS Tax Tip 2023-01, January 3rd, 2023. By law, all taxpayers have fundamental rights when they're interacting with the IRS. These rights apply all year, not just during the filing season. However, knowing and understanding these rights may help taxpayers resolve any filing season questions with confidence. All taxpayers are encouraged to review the Taxpayer Bill of Rights. There's a link to that here. This is the first in a series of tips on the Taxpayer Bill of Rights. So we've got more to come on these tips for the Taxpayer Bill of Rights. That's going to be great. So each month, Tax Tips will take a closer look at one of the rights presented in the 10 categories listed for full official details about each right. Click the links below. So we've got links to each of these rights. I won't go into them in detail because I'm expecting we'll have more information to look at each one of them in detail in the future. So you can click on them and look at them in more detail here if you so choose. Obviously, it is important to know and understand what your rights are with regards to the tax code in terms of recourse and how they're going to be treated. You should be able to know what is going on and how the tax is at least being applied and any recourse if you believe the tax is not being applied correctly. So here we go. So the right to be informed. There's a link to that here. Taxpayers have the right to know what they need to do to comply with the laws. Again, this seems fundamental if you've grown up in the United States, but you can clearly see if things were not set up properly that people can get in trouble when they don't know exactly how to comply with the law or even have situations where the law was one way one time and then they retroactively changed the law. You can see this in like other kind of areas like YouTube or something like when they put a new rule in that they put in retroactively and then you get in trouble for it. That kind of stuff causes problems because you don't know what the rules are when you're actually trying to be in compliance with them. So the right to quality service. So obviously quality service is going to be a subjective type of term. So what does quality service mean exactly? Clearly we want quality service, but again what does that actually mean? You would expect that the government is at a little bit of a disadvantage for quality service than private sectors that are in service industries. Why? Because it's not a for-profit company. The for-profit companies are typically better at quality service because they're competing on the market, often competing in quality because they don't want to compete in price, right? They're trying to differentiate in quality. When you get things that are just done by the government without the same kind of competition problems or the same kind of competition to force them to be lean and mean, then they get bloated, right? The quality goes down. Their websites, although they've been improving their website, for example here, you can see that the account that we use on their website and whatnot is probably not as sophisticated as your banking accounts and whatnot, which also handle private information and that kind of stuff. So anyway, somewhat subjective. Taxpayers have the right to receive prompt, courteous and professional assistance when working with the IRS and the freedom to speak to a supervisor about inadequate service. Then you got the right to pay no more than the correct amount of tax. So then clearly when you look at the tax code, you're trying to look at the tax code and say, okay, what is my obligation to pay? And a lot of people say, well, there's loopholes in the tax code, or you're cheating the tax code if you pay your proper amount of tax in accordance with the tax code. And that's not generally how we should look at it. Generally, if there's a problem with the way the tax code is, it's going to be the job of the government to change the tax code so that it fits. And so that you pay the tax that you're obligated to pay. And so obviously, once the law is set out, then our goal is to apply it and pay the taxes that were required to pay. Now, that doesn't mean that we can't pay more if we wanted to. If we wanted to give a charitable donation to the government, we could. But most people don't because they recognize that the government is probably the least efficient place out of many other charities to actually spend the money in a format that's going to be efficient, right? So I mean, if the government was efficiently spending money on where they're supposed to do it, like the military, and they weren't wasting a bunch of money, then I would probably donate the money. And you wouldn't even have to be fine. But so that's kind of the issue with it. And again, it gets kind of mixed up there when people start talking about what you're required to pay. And then people, and then they basically say people are taking advantage of loopholes. If the loophole is a position, for example, that is questionable, and under the law, then of course it might go to court cases and whatnot. And the law will be strengthened in one way or the other through the verdicts of the court cases, if not an actual change to the law itself in order to take care of any kind of loopholes in, quote, types of situations. So in any case, the right to pay. So taxpayers have the right to pay only the amount of tax legally do, including interest, penalties, and to have the IRS apply all the tax payment properly. So the right to challenge the IRS position and be heard. So notice this one gets confused oftentimes because when we say we challenge the position, oftentimes people just do it like they might do in an argument. Like I don't feel that that's fair, right? Or kind of thing, right? I don't feel like I should pay that amount of tax. And that's not a legitimate challenge that they're thinking about here, because the law is what it is. If you want to challenge the law, then you've got to vote for people to change the law. Once the law is in place, then you're challenging whether or not the IRS as an arm of the government is acting in compliance with the law. That's what you're challenging. So the book, the law, the code is the is the ground is the judge is the thing, you know, the thing that you're challenging based on not just on why I feel like that's not the way it should be kind of thing. So so that's, you know, where you want to orientate your thinking with that one. So taxpayers have the right to object to formal IRS actions or proposed actions and provide justification with additional documentation. So the IRS should be able to say when they're giving you a bill if they say, Hey, your tax return is wrong, we adjusted it, we're increasing your bill. This is why we're doing it. They should give you rationale for it. And the rationale, of course, will be rationale in alignment with the law. You might say the law is not rational. Well, then you got to hire different politicians to make a law that's rational, you know, once the law is down, the IRS has to be in compliance with the law. So the right to appeal the IRS decision in an independent forum. So now you've got the appeal process, you're arguing with the IRS whether or not they're correct in decision making that they have made taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including certain penalties. So if they charge you a penalty or something like that, you can basically argue against it again when you're doing so you're doing so in alignment with the laws and regulations on the books, the right to finality taxpayers have the right to know the maximum amount of time they have to challenge an IRS position and the maximum amount of time the IRS must audit a particular tax year or collect a tax debt. So if you didn't have a kind of a statute of limitations of time range, then you could feel like the IRS can come after you kind of any time. And so the idea here would be, well, you've got to you've got to have a reasonable time of action. Now, in practical terms, the IRS usually kind of like has three years that they can come back, but then they have other rules that say, well, maybe we can come back in five years if it was a if it was a big issue or something like that, or even so that that's still kind of a fuzzy area, but you get kind of the idea of it. You've got you've got a certain timeframe to take action after that point. We're not going to keep going back to the past. Something that happened 10 years ago is not relevant. We've got to cut it and go forward or else we're going to be agonizing over possible wrongdoings from way in the past. It's kind of like someone pulling up a Twitter tweet from 20 years ago and you're like, dude, it's 20 years ago. But the rights of privacy. Taxpayers have the right to expect that the IRS inquiry examination or enforcement action will comply with the law and be no more intrusive than necessary. So obviously you're giving a lot of information to the IRS. And it's kind of interesting these days because the income tax is a self reporting mechanism. We're supposed to be self reporting our income and then the IRS and then paying the tax on it, right? It's kind of a some, some level of trust was involved in it. But now, of course, the, the IRS is demanding more and more stuff. And part of that is because of our technology. So every time we have this new level of technology is like, wow, making the tax return. It's really easy. It used to be like a one page thing. I used to be able to call it in, you know, on a, on a phone. But now, now every time there's a potential for more information, it's kind of like Facebook's running, running the IRS, right? They want more of your data, it seems like so. They want more information. And not only do they want the information from you, they want more information from the people that are paying you, whether that be your employer, whoever you're working for as a contractor or even gig work, they want the information from the platforms and the, and the pay pals and the stripes and whatnot, which seems a little intrusive to me. It seems like, okay, we're getting a little, a little out of hand here. But the point is so, so that, so you, there should be kind of a limit in terms of how much, how much information they have. Cause then the question is, once they have that information, are they going to do like these big platforms, like the Facebooks and the Googles and sell it or, or, or sell it or do, or give it to the government for political reasons. Like you see things like presidential tax returns being linked, linked to the public. All of a sudden that's not supposed to happen, right? That it's supposed to be a private type of thing. So if the, if it starts to be a regular situation that the irises get some political pressure and they leak all of your information and your tax returns are public, all of a sudden, you know, this is, this is, this is where this right should kind of come into play. Where's, where's the line on some of these things. So the right to confidentiality taxpayers have the right to expect that their tax information will be, be, remain conf, confidential. Again, that's kind of the question you get. You're giving them all this information. Is it really confidential? I mean, if, if there's a, you know, how easy is it for that to leak all that information that's there, you know, what are they, what are they doing with all the information as they keep on increasing the amount of information? Is it necessary for them to keep on increasing the amount of information? Obviously, there's an interplay between the more they, the more intrusive the government is, the easier it is to get, to collect on, on taxes to some degree, but also there could be a dampening on the market because now you've got more rules and regulations and those tend to stamp out free market enterprise thriving. So you would think that you would want the tax revenue to grow by incentivizing growth in the economy. GDP actually going up, even if they collect less GDP, even if people are cheating, and we have audits, audit systems that aren't catching everyone on it, but they're still giving the potential to catch by doing random audits and whatnot. You know, is that better or worse than having them clamp down and, and double checking, looking over everyone's shoulder and most likely dampening GDP in the process, our actual growth, I would think. Any case, the right to retain representation taxpayers have the right to retain and authorize representative of their choice to represent them in their interactions with the IRS. So it's kind of like going to court, right? They're going to say so similar thing, getting kind of like getting a lawyer, except you might get a CPA or an agent of some kind in order to help you out to be in compliance or argue against whatever you're arguing against, the right to fair and just tax system. Taxpayers have the right to expect fairness from the tax system. So we still use the term fairness here. It's not an equitable, they haven't changed the terminology to something I haven't, I don't quite understand, but still the term fairness is still somewhat ambiguous. What does fair mean? That's what we argue over. So when anytime someone says, I'm here arguing for a fair tax system, that's the most politically banal, just useless term, because fair, what does fair mean? It's that you gotta define the term in order to, in order to have it mean anything. But in any case, this includes considering all facts and circumstances that might affect their liabilities, ability to pay or provide information timely. So basically they're saying, you know, they're going to take into consideration your capacity to pay within this. And that kind of makes sense just from a collection type of standpoint as well. And this gets into like the offer and compromise kind of situation where if you clearly have a large tax bill and you don't have any money, and there's no way that you're going to pay the tax bill, it becomes advantageous even from just a creditor and an individual to come up with a deal that makes kind of sense and that information in that situation. But obviously anyways, that's that one. So maybe we'll dive into these and more in the future as they dive more into them into the future. More information can be found at publication one, your rights as a taxpayer. There's a link to that. There's a link to all of these individual items. If you want to look at them in more detail, there'll be a link to this in the description.