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The Taxpayer Bill of Rights is a cornerstone document that highlights the ten fundamental rights taxpayers have when dealing with the Internal Revenue Service.
The right to retain representation is one of them and states that taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. An IRS representative is a person who is authorized to speak, negotiate, and advocate on your behalf in any tax matters and dealings with the IRS, including in the case of audits, agreements, and lawsuits.
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Representation rights, also known as practice rights, fall into two categories, unlimited representation and, of course, limited representation.
Credentialed tax professionals who have unlimited representation rights include attorneys, certified public accountants (CPAs), enrolled agents, enrolled retirement plan agents (ERPA), and enrolled actuary.
Limited representation rights authorize the tax professional to represent you if, and only if, they prepared and signed the return.
If you cannot afford representation, you have the right to seek assistance from a Low Income Taxpayer Clinic.
Low Income Taxpayer Clinics (LITCs) represent low income taxpayers before the IRS, assist taxpayers in audits, appeals and collection disputes, and can help taxpayers respond to IRS notices and to correct account problems.
The Low Income Taxpayer Clinic Program is a matching federal grant program that provides up to $100,000 per year to qualified organizations to represent low income taxpayers in controversies with the IRS and provide education and outreach to taxpayers who speak English as a second language (ESL).
Qualified organizations include, among others, academic institutions and nonprofit organizations throughout the U.S. that must meet the goals of the program.
If you are a low income taxpayer who cannot afford professional tax assistance or if you speak English as a second language (ESL) and need help understanding your taxpayer rights and responsibilities, you may qualify for help from an LITC that provides assistance for free or for a nominal charge.
Although LITCs receive partial funding from the IRS, LITCs, their employees, and their volunteers are completely independent of, and are not associated with, the federal government.
Each LITC independently decides if you meet the income guidelines and other criteria before it agrees to represent you.
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| For the 2020 calendar year, the income ceilings (250% of Poverty Guidelines) for low income representation are shown below. Each clinic will decide if you meet the income guidelines and other criteria before it agrees to represent you. |
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- For a single in 48 contiguous states, Puerto Rico, and D.C., the income ceiling is $31,900 (for Alaska it is $39,875, and for Hawaii $36,700).
- For a family of two in 48 contiguous states, Puerto Rico, and D.C., the income ceiling is $43,100 (for Alaska it is $53,875, and for Hawaii $49,575).
- For each additional person, add $11,200, $14,000, and $12,875 respectively.
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There is at least one LITC in each of the 50 states, the District of Columbia and Puerto Rico. You can find an LITC located in or near your area by using Publication 4134 , Low Income Taxpayer Clinic List.
Low income taxpayers may also be able to receive assistance from a referral system operated by state bar associations, state or local societies of accountants, and other nonprofit tax professional organizations.
According to the National Taxpayer Advocate, more than 80% of cases in Tax Court are brought by unrepresented taxpayers. That percentage increases to almost 94% among cases where the deficiency for a tax year is $50,000 or less, and the taxpayer elects small tax case (S Case) procedures.
The IRS Office of Chief Counsel recently announced that the Settlement Days program will continue remotely enabling unrepresented taxpayers to work towards resolving their pending United States Tax Court case despite "stay-at- home" orders in many jurisdictions.
The first two events are scheduled for May 9 and May 21 for docketed cases with place of trial in Detroit and Atlanta. Future events may be scheduled in other cities throughout the United States.
Virtual Settlement Days is a coordinated effort to resolve Tax Court cases by giving taxpayers not represented by counsel the opportunity to receive free tax advice and possible representation from Low Income Taxpayer Clinics or other pro bono organizations. Taxpayers can discuss their Tax Court case and federal tax issues with members of the IRS Office of Chief Counsel, Appeals and Collections.
The program is geared to help unrepresented taxpayers receive free assistance in discussing a potential fair settlement of their tax disputes in an informal setting without the need for further litigation or a trial in Tax Court.
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The vast majority of taxpayers participating in previous Settlement Days programs have resolved their cases; most of those who ended up with a liability have been able to enter into an installment payment arrangement.
More than 100 unrepresented taxpayers were invited to meet with Chief Counsel attorneys or paralegals via WebEx for the two events mentioned earlier. The taxpayers will be able to speak with LITC representatives prior to the WebEx meetings. If the taxpayer desires, the LITC representatives will later join the WebEx meetings.
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You can test your system’s compatibility with WebEx by visiting the Cisco site at www.webex.com/test-meeting.html. If you choose, you can also download the WebEx software from this site. When you agree to a WebEx conference, the Appeals Officer (AO) will email you a link to attend the conference. This email will include information on how to join the conference and optimize the audio portion.
While docket taxpayers with cases currently under consideration by the IRS Independent Office of Appeals have not been sent invitations to the Detroit and Atlanta events, the IRS encourages those petitioners to contact the Appeals Officer assigned to their case to discuss resolution.
Appeals continues to work cases, including use of virtual conferences. For unrepresented taxpayers who are working with an Appeals Officer and receive an invitation to the event, the IRS will work with them at the event to resolve all their issues.
In addition, IRS Chief Counsel recently prepared a Virtual Settlement Days Best Practice Guide for external use that will be released in advance of the Virtual Settlement Days events. Chief Counsel anticipates that Virtual Settlement Days will be a mainstay of its Settlement Day efforts even after this crisis is over.
Keep up with our newsletters to find out about the most recent information which may impact your taxation and financial situation.
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