Your Taxpayer Bill of Rights
As a taxpayer, you have a set of fundamental rights you should be familiar with when you deal with the IRS. You need to understand your rights and the obligations of the IRS to protect them. The following are considered your Taxpayer Bill of Rights:
The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to Privacy
The Right to Confidentiality
The Right to Retain Representation
The Right to a Fair and Just Tax System
The Right to Be Informed
As a taxpayer, you have the right to know what you need to do to comply with the tax laws. You are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. You have the right to be informed of IRS decisions about your tax accounts and to receive clear explanations of the outcomes.
IRS Fact Sheet No. 1 – The Right to Be Informed
The Right to Quality Service
You have the right to receive prompt, courteous, and professional assistance in your dealings with the IRS, to be spoken to in a way you can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.
IRS Fact Sheet No. 2 – The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
You have the right to pay only the amount of tax you legally owe, including interest and penalties, and to have the IRS apply all tax payments properly.
IRS Fact Sheet No. 3 – The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
You have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider your timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with your position.
IRS Fact Sheet No. 4 – The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
You are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and you have the right to receive a written response regarding the Office of Appeals’ decision. As a taxpayer, you generally have the right to take your case to court.
IRS Fact Sheet No. 5 – The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
You have the right to know the maximum amount of time you have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit your return for a particular tax year or collect a tax debt from you. You also have the right to know when the IRS has finished its audit of you.
The Right to Privacy
You have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary. You have the right to expect that the IRS will respect all due process rights, including search and seizure protections and will provide you, where applicable, with a collection due process hearing.
The Right to Confidentiality
You have the right to expect that any information you provide to the IRS will not be disclosed unless authorized by you or by law. You have the right to expect appropriate action will be taken against IRS employees, return preparers, and others who wrongfully use or disclose your taxpayer return information.
The Right to Retain Representation
You have the right to retain an authorized representative of you choosing to represent you in their dealings with the IRS. If you cannot afford representation, you have the right to seek assistance from a Low Income Taxpayer Clinic.
The Right to a Fair and Just Tax System
You have the right to expect that the tax system will consider facts and circumstances that might affect your underlying liabilities, ability to pay, or ability to provide information timely. You have the right to receive assistance from the Taxpayer Advocate Service if you are experiencing financial difficulty or if the IRS has not resolved yourtax issues properly and timely through its normal channels.
Don’t Miss the Health Insurance Deduction if You’re Self-Employed
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If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed.
The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.
You may be able to take this deduction if one of the following applies to you:
- You had a net profit from self-employment. You would report this on a Schedule C, Profit or Loss From Business, Schedule C-EZ, Net Profit From Business, or Schedule F, Profit or Loss From Farming.
- You had self-employment earnings as a partner reported to you on Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc.
- You used an optional method to figure your net earnings from self-employment on Schedule SE, Self-Employment Tax.
- You were paid wages reported on Form W-2, Wage and Tax Statement, as a shareholder who owns more than two percent of the outstanding stock of an S corporation.
There are also some rules that apply to how the insurance plan is established. Follow these guidelines to make sure the plan qualifies:
- If you’re self-employed and file Schedule C, C-EZ, or F, the policy can be in your name or in your business’ name.
- If you’re a partner, the policy can be in your name or the partnership’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the partnership must reimburse you and include the premiums as income on your Schedule K-1.
- If you’re an S corporation shareholder, the policy can be in your name or the S corporation’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the S corporation must reimburse you and include the premiums as wage income on your Form W-2.
For more information, see IRS Publication 535, Business Expenses. It’s available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Source: IRS Tax Tip 2013-43, March 28, 2013
Last Updated: February 12, 2015
How to Apply for an EIN
Applying for an Employer Identification Number (EIN) is a free service offered by the Internal Revenue Service. Beware of websites on the Internet that charge for this free service.
Apply Online
The Internet EIN application is the preferred method for taxpayersto apply for and obtain an EIN from the IRS. Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), is located in the United States or U.S. Territories. The principal officer, general partner, grantor, owner, trustor etc. must have a valid Taxpayer Identification Number (Social Security Number, Employer Identification Number, or Individual Taxpayer Identification Number) in order to use the online application.
Apply by Fax
Taxpayers can fax the completed Form SS-4 application to their state fax number (see Where to File Your Taxes (for Form SS-4)), after ensuring that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type. If the taxpayer’s fax number is provided, a fax will be sent back with the EIN within four (4) business days.
Apply by Mail
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer. Find out where to mail Form SS-4 on the Where to File Your Taxes (for Form SS-4) page.
Apply by Telephone – International Applicants
International applicants may call 267-941-1099 (not a toll-free number) 6:00 a.m. to 11:00 p.m. (Eastern Time) Monday through Friday to obtain their EIN. The person making the call must be authorized to receive the EIN and answer questions concerning the Form SS-4. Complete the Third Party Designee section only if you want to authorize the named individual to receive the entity’s EIN and answer questions about the completion of Form SS-4. The designee’s authority terminates at the time the EIN is assigned and released to the designee. You must complete the signature area for the authorization to be valid.
Other Important Information
Daily Limitation of an Employer Identification Number. The Internal Revenue Service limits Employer Identification Number (EIN) issuance to one per responsible party per day. This limitation is applicable to all requests for EINs whether online or by fax or mail. In order to identify the correct individuals and entities applying for EINs, language changes have been made to the EIN process.
Third Party Authorization. If a person other than the taxpayer is submitting the Form SS-4, the Third Party Designee section must be completed at the bottom of the Form SS-4. The Form SS-4 must also be signed by the taxpayer for the third party designee authorization to be valid. The Form SS-4 must be mailed or faxed to the appropriate service center. The third party designee’s authority terminates at the time the EIN is assigned and released to the designee.
5 Tax Tips You May Be Forgetting
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A recent article in The Street offers up a few overlooked but highly effective tax tips for Americans looking to save time and money, from Michael Gutter, an associate business and finances professor at the University of Florida:
1. Get free help. If you earn less than $51,000 per year, you likely qualify for help from the IRS volunteer income tax assistance (VITA) program.
2. Tax credit for kids. The tax code allows plenty of good deductions for parents with children — even kids in college.
3. Direct to savings. Gutter advises having your tax refund sent right to your bank savings account. That protects you from making “impulse purchases.”
4. Take a mulligan. Amend previous years’ tax returns to grab deductions or tax credits you missed the first time.
5. IRA contributions. Gutter reminds tax filers that the deadline for making tax-deductible IRA contributions from income earned in 2012 is April 15.
For more detail, read the full article.
Emancipation Day gives extra day to file 2011 tax returns
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Taxpayers will have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due because April 15 falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, falls this year on Monday, April 16. According to federal law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year.