Understanding taxpayer rights: Every taxpayer has the right to privacy
Tax Tip 2022-127
The privacy of America’s taxpayers is paramount at the IRS. The right to privacy is one of ten rights the Taxpayer Bill of Rights gives all taxpayers.
Taxpayers 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. Taxpayers can also expect that the IRS will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.
Here are a few more details about what a taxpayer’s right to privacy means:
- The IRS cannot seize certain personal items, such as schoolbooks, clothing and undelivered mail.
- The IRS cannot seize a personal residence without first getting court approval, and the agency must show there is no reasonable alternative for collecting the tax debt.
- Sometimes, taxpayers submit offers to settle their tax debt that relate only to how much they owe. This is formally known as a Doubt as to Liability Offer in Compromise. Taxpayers who make this offer do not need to submit any financial documentation.
- During an audit, if the IRS finds no reasonable indication that a taxpayer has unreported income, the agency will not seek intrusive and extraneous information about the taxpayer’s lifestyle.
- A taxpayer can expect that the IRS’s collection actions are no more intrusive than necessary. During a collection due process hearing, the Office of Appeals must balance that expectation with the IRS’s proposed collection action and the overall need for efficient tax collection.