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Taxpayer Bill of Rights (Part VII)

The IRS has adopted a Taxpayer Bill of Rights as proposed by National Taxpayer Advocate Nina Olson

Bill of Rights #5: The Right to Appeal an IRS Decision in an Independent Forum (cont.)

  • You can generally request that an issue you have not been able to resolve with the IRS examination or collection division be transferred to the Office of Appeals. For issues that are unresolved after working with Appeals, you may request non-binding mediation (where a neutral third party will help you try to reach a settlement) or binding arbitration (where you and the IRS will be bound by a third party’s decision). You may also request non-binding mediation or arbitration after unsuccessfully trying to enter into a closing agreement or offer in compromise. IRC § 7123
  • Generally, if you have fully paid the tax and your tax refund claim is denied or if no action is taken on the claim within six months, then you may file a refund suit in a United States District Court or the United States Court of Federal Claims. IRC § 7422
  • In very limited circumstances, you can ask a court to make a determination on certain tax issues prior to there being an actual dispute between you and the IRS. For example, a court may be able to determine whether an organization is tax-exempt or if a retirement plan is valid. IRC §§ 7428, 7476-7479
  • A jeopardy levy or assessment allows the IRS, in very limited circumstances, to bypass normal administrative safeguards and protections. For example, the IRS may issue a jeopardy levy if the IRS has knowledge that the taxpayer is fleeing the country. If the IRS makes such a jeopardy levy or assessment, you have the right to file a law suit and the court will determine whether the levy or assessment was reasonable under the circumstances and whether the amount is appropriate. IRC § 7429

(IRS NTA web site) (TTT 6/5/18)