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6/11/2014 Tax Analysts -- Koskinen and Olson Unveil IRS' s New Taxpayer Bill of Rights

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JUNE 11, 2014
Koskinen and Olson Unveil IRS's New Taxpayer
Bill of Rights
William Hoffman
Tax Notes Today
IRS Commissioner John Koskinen said June 10 that some provisions of the agency's new Taxpayer
Bill of Rights (TBOR) -- which includes rights to finality in tax controversy decisions with the Service,
to both privacy and confidentiality, and to a "fair and just tax system" -- will be difficult to enforce
without additional resources.
"If we do not have adequate funding, that means we don't have enough people answering phones,
taking care of correspondence, or staffing our walk-in taxpayer assistance sites," Koskinen said. "So
I will continue making the case to Congress that the IRS needs adequate resources in order to
properly serve taxpayers."
Koskinen and National Taxpayer Advocate Nina Olson unveiled the new document at a joint press
conference in Washington. It was the first joint press conference by a sitting IRS commissioner and
the taxpayer advocate, according to the IRS.
The TBOR, also outlined in an IRS news release (IR-2014-72 ), sets out 10 taxpayer rights:
the right to be informed;
the right to receive quality service;
the right to pay no more than the correct amount of tax owed;
the right to challenge the IRS's position and to be heard;
the right to appeal IRS decisions in an independent forum (such as the Appeals office or the
Taxpayer Advocate Service);
IRS Commissioner John Koskinen said June 10 that some provisions of the agency's new
Taxpayer Bill of Rights -- which includes rights to finality in tax controversy decisions with the
Service, to both privacy and confidentiality, and to a "fair and just tax system" -- will be difficult to
enforce without additional resources.
6/11/2014 Tax Analysts -- Koskinen and Olson Unveil IRS' s New Taxpayer Bill of Rights
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the right to finality of IRS decisions;
the right to privacy;
the right to confidentiality;
the right to retain representation; and
the right to a "fair and just" tax system.
Koskinen said the new document and supporting materials will be posted to a special section of the
IRS website; incorporated into a redesigned version of IRS Publication 1, Your Rights as a
Taxpayer, which is included in any correspondence with taxpayers about enforcement actions; and
displayed on signs and posters at IRS offices across the country. Publication 1 reaches about 30
million taxpayers each year, the commissioner said.
Practitioner Response
Some tax practitioners welcomed the IRS's announcement.
Articulating a taxpayer's rights, including the right to seek representation from a low-income taxpayer
clinic if a taxpayer cannot afford representation, is a "wonderful thing" and could prove valuable for
taxpayers if the agency trains its employees on the TBOR, said Diana Leyden, director of the
University of Connecticut School of Law's tax clinic.
"In my experience, most taxpayers truly want to be heard and be treated fairly," Leyden said. "Even if
they do not ultimately prevail, the fairness and transparency of the process is important."
The TBOR is a big improvement over prior versions of IRS publications such as Publication 1, said
Paul Harrison, director of the tax clinic at the Center for Economic Progress in Chicago. The right to
pay no more than the correct amount of tax owed is fundamental so that taxpayers understand that
the IRS is not determined to get as much money as it can from taxpayers, he explained.
"Taxpayers have needed to understand that they are on solid ground when they challenge an IRS
proposed assessment on the ground that the assessment is incorrect, as long as they have evidence
to support their claim," Harrison said. "The right to challenge the IRS and be heard, along with the
right to appeal and the right to be represented, seem to me [to be] the other rights that will be
especially meaningful to low-income taxpayers."
Congressional Reception?
Koskinen and Olson both said they have repeatedly raised the subject of a taxpayer bill of rights
during testimony before Congress and in discussions with individual taxwriters. Olson noted that the
House passed a taxpayer bill of rights (H.R. 2768 ) earlier this year but that it has not advanced in
the Senate. (Prior coverage , .)
The new TBOR is being distributed to members of Congress, IRS media relations said. Koskinen
and Olson said they expected congressional representatives to be receptive to the principles in the
TBOR, but added that they had not yet talked with representatives about the new document.
Reached after the IRS press conference, Senate Finance Committee Chair Ron Wyden, D-Ore.,
said he had not yet had a chance to review the new document in detail.
6/11/2014 Tax Analysts -- Koskinen and Olson Unveil IRS' s New Taxpayer Bill of Rights
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Olson said she modeled her original TBOR, from which much of the IRS document was taken, on the
OECD's similar efforts in the 1990s and on the U.S. Bill of Rights. Taxpayer rights will be further
elaborated through the courts and through consultation with taxpayers and their representatives over
time, she said.
No New Rights
Koskinen said that the IRS's TBOR does not include new rights, but rather is meant to organize and
codify existing rights and remedies already scattered throughout the Internal Revenue Code. He
added that he doesn't expect the new TBOR to increase the risk of taxpayer litigation.
Koskinen added that now is the time to release the TBOR. With filing season over, he said, the IRS is
shifting toward sending out notices and other mailings that will now include additional information
about taxpayers' rights and potential remedies.
The recent controversy over alleged IRS targeting of political groups' applications for 501(c)(4) tax-
exempt status did not factor into the decision to introduce the new TBOR, Koskinen said. However,
Olson said the TBOR could serve as a "sanity check" for IRS employees dealing with similar
situations in the future.
Koskinen said the IRS is clearing a backlog of 501(c)(3) applications, as well as expediting
processes that taxpayers encounter in disputes with the Service, partially in hopes of demonstrating
the IRS's commitment to the new principles.
Long Road to TBOR
Speaking June 9 at a Tax Executives Institute Region II tax forum in Atlantic City, New Jersey, Olson
said that while some remain skeptical about the enforceability of a TBOR given the IRS's straitened
fiscal circumstances, she believes the document could goad Congress into delivering funds to
implement taxpayer rights.
"The number one right in the [taxpayer] bill of rights is that taxpayers have the right to quality taxpayer
service," Olson said. "Well, answering only three out of five phone calls is not quality taxpayer service.
Having to make people wait 20 minutes on the phone is not quality taxpayer service. So then you
immediately have to say, 'Well, then, that right is being violated.' So what that does, though, is it says
to Congress, if this is a foundational right of tax administration, then you, Congress, have to fund the
IRS so that we can deliver on that right."
Olson first called for a TBOR in 2007 and then again in 2011. She made the lack of such guarantees
her top taxpayer concern in her 2013 annual report to Congress. The new TBOR makes the United
States one of the few tax administrations in the world with such administrative promises, she said.
A 2012 Taxpayer Advocate Service (TAS) survey found that only 46 percent of those asked knew
they had rights before the IRS and that just 11 percent knew what those rights were, Olson said June
10.
Simplifying access to taxpayers' rights and remedies, and publicizing those efforts through
6/11/2014 Tax Analysts -- Koskinen and Olson Unveil IRS' s New Taxpayer Bill of Rights
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Read Comment (1)
Publication 1 and other media, will help boost those numbers, Olson said.
TBOR Enforceability
Tax code complexity is one of the biggest obstacles to implementing an effective TBOR, Koskinen
said. Effective enforcement of such legislative measures as the Foreign Account Tax Compliance
Act would demonstrate to taxpayers that the system is administered fairly, he added.
Some rights in the new TBOR may have no enforceable remedies, Olson said. For those, the TAS
has set up what Olson called a "crosswalk," posted on the TAS website, which provides specific
code provisions, forms, and publications associated with each of the 10 specific TBOR items.
Taxpayers' feedback could also be an important part of developing TAS's crosswalk and further
elaborating taxpayers' rights and remedies, Olson said.
"To some extent . . . things like rights of appeal, it's up to the taxpayer to take that right and use it,"
Koskinen said. "The purpose of giving greater visibility to these rights is to encourage taxpayers to
be aware of and assert their rights whenever it's appropriate."
Olson said that publicizing the availability of appeals, adjustments, and payment agreements such as
offers in compromise and installment plans based on the facts and circumstances of individual
taxpayer's claims acts as a "safety valve" for taxpayers and insurance of their rights.
Olson said the new TBOR should apply to tax return preparers, as well. She said that during focus
groups with preparers, there was overwhelming support for a TBOR, as well as enthusiasm for having
IRS statements about taxpayer rights that preparers could use to help their clients.
David van den Berg, Eric Kroh, and Meg Shreve contributed to this article.
Tax Analysts Information
Jurisdiction: United States
Subject Area: Tax system administration issues
Author: William Hoffman
Institutional Author: Tax Analysts
Tax Analysts Document Number: Doc 2014-14463
Tax Analysts Electronic Citation: 2014 TNT 112-2
george June 11, 2014 at 11:10 AM
6/11/2014 Tax Analysts -- Koskinen and Olson Unveil IRS' s New Taxpayer Bill of Rights
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The "right to appeal" is still imperfect. You have no right to appeal a decision by the Offer in
Compromise screeners that an offer is "unprocessible," even when the IRS employee is
clearly wrong or violating the provisions of the Internal Revenue Manual.
Tax Anal ysts (2014)