The Argument for the Creation of a Taxpayer Bill of Rights

The National Taxpayer Advocate, an entity within the IRS that is specifically designed to advocate for taxpayers, has repeatedly recommended adoption of a Taxpayer Bill of Rights (TBOR) by the IRS. The dozens of taxpayer rights strewn throughout the Internal Revenue Code often result in confusion. Unfortunately, there is no concise and coherent list of rights. Most taxpayers have no idea what their rights are and therefore often cannot take advantage of them. In a survey of U.S. taxpayers conducted in 2012, less than half said they believed they have rights before the IRS, and very few said they knew what those rights are.

The National Taxpayer Advocate (NTA) analyzed the IRS’s processing of applications for tax-exempt status and showed that the IRS had violated eight of the ten rights proposed. Had there been a published Taxpayer Bill of Rights, organizations applying for tax-exempt status, IRS employees processing their applications, IRS executives overseeing the program and Congressional offices receiving complaints likely would have flagged the inconsistencies between the applicants’ rights and the IRS’s actions more quickly. There is no guarantee that would have happened, of course, but the existence and broad awareness of a Taxpayer Bill of Rights would have substantially increased the odds that the problems would have surfaced and been addressed sooner, according to the NTA. There is ample precedent for the IRS to adopt a TBOR administratively before Congress enacts legislation. In 1977, for example, the IRS established a problem resolution program nationwide to help taxpayers when regular contacts with the IRS failed. In 1979, the IRS created the Office of the Taxpayer Ombudsman to serve as the primary advocate within the IRS for taxpayers, with the responsibility to manage the problem resolution program. Yet the first reference to the Taxpayer Ombudsman did not appear in the IRC until 1988. Congress has passed multiple pieces of legislation with the title of “Taxpayer Bill of Rights,” but none of these laws has provided a foundational, general description of taxpayer rights. Instead taxpayers have had to consult a multitude of Code sections to understand their rights. A true TBOR must take the multiple existing rights embedded in the code and groups them into ten broad categories, modeled on the U.S. Constitution’s Bill of Rights. A thematic, principle-based list of core taxpayer rights would provide a foundational framework for taxpayers and IRS employees alike that would promote effective tax administration.

According to the NTA, a Taxpayer Bill of Rights would serve to help both taxpayers and the IRS. This transparency will help taxpayers feel more confident in our taxation system, and the end result will be greater compliance for the IRS. To find out more about the specifics of this Taxpayer Bill of Rights might include, see our articles entitled “Taxpayer Advocate Service Proposes Taxpayer Bill of Rights” (January 27th, 2014) and “Taxpayer Advocate Service Proposes Taxpayer Responsibilities” (February 3rd, 2014.)What are your thoughts? Should the IRS adopt a Taxpayer Bill of Rights?