Nightmare: you've been called to a meeting with an IRS agent to discuss your tax return, and you can't afford professional help. Did you know that you could have someone help you at low cost or even free? It's one of your rights as a U.S. taxpayer.
You may know about the Bill of Rights, but were you aware that the IRS also has a Bill of Rights for your benefit? Here are your ten fundamental rights known as the Taxpayer Bill of Rights:
Top 10 taxpayer rights
Top 10 taxpayer rights
The Right to a Fair and Just Tax System – You have the right to expect the IRS to consider special circumstances that affect your tax liabilities, your ability to pay, or your ability to provide necessary information. You also have the right to assistance from the Taxpayer Advocate Service.
The Right to Confidentiality – You have the right for your confidential tax information to remain confidential unless you authorize its disclosure. IRS employees who violate these rules will be subject to appropriate disciplinary action.
The Right to Be Informed – You have the right to clear explanations of all the tax laws and the corresponding IRS procedures throughout all IRS publications and correspondence. Taxpayers must be notified regarding any IRS decisions involving their account and the outcome must be fully and clearly explained. (Unfortunately, they cannot make the tax code any simpler in their explanation.)
The Right to Pay No More than the Correct Amount of Tax – You have the right to pay only the amount of tax that you legally owe, including any accrued interest and penalties. The IRS is also obligated to apply your tax payments correctly.
The Right to Privacy – You have the right to expect that all IRS actions regarding your account will comply with the law. Actions must not be more intrusive than necessary, and should respect all rights of due process.
The Right to Challenge the IRS's Position and Be Heard – You have the right to object to an IRS action and provide documentation to support your claim. The IRS is obligated to consider the objections fairly and promptly, and to send a response to the taxpayer if they disagree with the claim.
The Right to Appeal an IRS Decision in an Independent Forum – You have the right to appeal IRS decisions and receive a "fair and impartial" hearing from the Office of Appeals. Many tax penalties are included within this right. The IRS is obligated to send you a written response to notify you of the decision. In addition, you generally have the right to take these cases to court.
The Right to Retain Representation – You have the right to an "authorized representative" of your choice to represent you before the IRS, and to acquire assistance from a Low Income Taxpayer Clinic if you can't afford a qualified representative.
The Right to Quality Service – You have the right to "prompt, courteous, and professional" help in your communications with the IRS. Thanks to budget cuts, this has been a difficult one for the IRS to achieve in recent years. Last year produced 8.8 million "courtesy disconnects," aka hang-ups, from the IRS. They pledge to do better this year.
The Right to Finality – Finally (sorry, we couldn't resist), you have the right to know all deadlines for challenging IRS positions, IRS collections of tax debt, and the window of time for an audit in any particular tax year.
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Each right has a secondary link on the IRS website that explains it in greater detail. Read all about these rights, and make sure to understand them when you are engaged in dealings with the IRS. We hope that you will never have a reason to remind the IRS of any of these rights.
So, you decided to become your own boss (at least part-time) and start driving for a ride-sharing company like Lyft. Use the Lyft tax preparation checklist below to organize your income and deductions to make filing your taxes a breeze. Remember, not all items listed will apply to you, but it will give you a good idea on what you need to report as income and what you can claim as a deduction.
Originally created to make sure the wealthy paid taxes even after using tax breaks and loopholes, the Alternative Minimum Tax (AMT) has never been updated and continues to impact middle class Americans more and more each year as a result of inflation. To compensate for inflation, the AMT now includes an exemption amount. This exemption is indexed for inflation so it changes every year.
Taxpayers who upgrade their homes to make use of renewable energy may be eligible for a tax credit to offset some of the costs. As of the 2018 tax year, the federal government offers the Nonbusiness Energy Property Credit. The credits are good through 2019 and then are reduced each year through the end of 2021. Claim the credits by filing Form 5695 with your tax return.
Every April, many taxpayers wait until the last minute to file their federal income tax returns. Despite this tendency, there are many reasons to file your taxes early. If you will receive a refund, you may want to submit your return as quickly as possible. Additionally, there are benefits to filing early for those taxpayers who have a balance due.