You Have Rights with the IRS.
Most Business Owners Don't Know What They Are.
When most business owners hear “the IRS,” they think of an institution with unlimited authority and limited patience. They assume that an IRS notice, audit, or inquiry is something to navigate carefully, quietly, and with as little pushback as possible.
That assumption is understandable. It is also wrong.
In 2014, Congress passed the Taxpayer Bill of Rights, codifying ten fundamental rights that every taxpayer has when dealing with the IRS. These rights were not created to make audits easier or to slow down collections. They were created because Congress recognized that the power imbalance between the IRS and individual taxpayers was significant enough to require a formal counterbalance.
Most business owners have never heard of these rights. Most never think to ask. And that gap in awareness consistently puts taxpayers at a disadvantage in situations where they legally have standing to push back, ask questions, and demand fair treatment.
Here is what the Taxpayer Bill of Rights actually says, and what it means for you.
The IRS is not above accountability. You have 10 codified rights in every interaction with them. Most business owners never use them, because they don't know they exist.
The Ten Rights, Explained in Plain Language
The Right to be Informed
The IRS is required to clearly explain what you need to do to comply with the law. Notices, letters, and audit requests must communicate what is being asked of you, why, and what your options are. If you receive a notice that is unclear, you have the right to request a plain-language explanation. You do not have to respond to something you do not fully understand.
The Right to Quality Service
When you contact the IRS, you are entitled to prompt, courteous, and professional assistance. If you receive inadequate service from an IRS representative, you have the right to speak with a supervisor. This right is meaningful in practice: poor treatment, dismissiveness, or unprofessional conduct from IRS employees is not something you have to accept.
The Right to Pay No More than the Correct Amount of Tax
You are legally entitled to pay only what you actually owe, nothing more. This right protects you from over-assessment, improper penalty calculation, and misapplied payments. If the IRS calculates a liability incorrectly, this right is your basis for disputing it. It also means the IRS must apply your payments properly and accurately to your account.
The Right to Challenge the IRS's Position and be Heard
If the IRS takes a position you disagree with, you have the right to raise objections, submit additional documentation, and expect that your response will be considered fairly and promptly. This is not a courtesy; it is a legal obligation on the IRS’s part. A well-documented response to an audit finding, prepared by your CPA, is a formal exercise of this right.
The Right to Appeal an IRS Decision in an Independent Forum
If you disagree with an IRS decision, you can appeal it to the IRS Independent Office of Appeals, which operates separately from the examination and collection functions. You can also take your case to the U.S. Tax Court, U.S. District Court, or the U.S. Court of Federal Claims. The existence of an independent appeals process means the IRS’s initial decision is not the final word.
The Right to Finality
The IRS operates under statutes of limitations. For most returns, the IRS has three years from the date you filed to audit you. For significant underreporting of income (more than 25%), the window extends to six years. You have the right to know these timeframes, and the IRS cannot audit a year indefinitely. When an audit closes, you have the right to know it is closed.
The Right to Privacy
Any IRS inquiry, examination, or enforcement action must comply with the law and be no more intrusive than necessary. The IRS cannot conduct overly broad examinations, demand information unrelated to the matter at hand, or conduct searches without proper legal authority. Due process protections, including search and seizure protections, apply in your dealings with the IRS.
The Right to Confidentiality
Information you provide to the IRS cannot be disclosed to third parties without your authorization or a legal basis for doing so. This includes your tax return information, the details of your audit, and any documentation you submit. If an IRS employee or a return preparer wrongfully discloses your information, you have the right to expect that appropriate action will be taken against them.
The Right to Retain Representation
You do not have to face the IRS alone. You have the right to authorize a CPA, attorney, or enrolled agent to represent you in any IRS proceeding. You can designate a representative through Form 2848 (Power of Attorney), and the IRS must then direct its communications to your representative. You can also stop an IRS interview at any point to consult with your representative before proceeding.
The Right to a Fair and Just Tax System
If you are experiencing financial hardship, or if the IRS has failed to resolve your issue properly through normal channels, you have the right to assistance from the Taxpayer Advocate Service, an independent organization within the IRS. The TAS can intervene when the IRS is causing significant hardship, when you have exhausted normal channels, or when the system is not working the way it should.
You can stop an IRS interview at any point to consult with your representative. Most business owners sit through entire interviews without knowing that.
What this Means in Practice
Knowing these rights exists is useful. Having someone who can exercise them on your behalf is what actually changes outcomes.
The most consequential of the ten rights, in practical terms, are the right to representation, the right to challenge and be heard, and the right to appeal. Together, they mean that no IRS determination is final until you have had the opportunity to respond with evidence, argue your position, and if necessary, escalate to an independent forum.
In our practice, we exercise these rights regularly on behalf of clients. When the IRS issues a notice, we review it, determine whether the position is correct, and respond with documentation that supports the client’s position. When the IRS proposes an adjustment we disagree with, we request appeals. When a client’s account has been mishandled, we contact the Taxpayer Advocate Service.
None of this requires confrontation. It requires knowledge of the process and the willingness to use it.
The business owners who tend to fare worst in IRS situations are the ones who respond to notices without professional guidance, agree to adjustments because they assume they have no choice, or simply don’t respond at all because the process feels overwhelming. In every one of those cases, the Taxpayer Bill of Rights provides a framework for a different outcome.
What Should You Do
If you receive any communication from the IRS, the most important first step is to not respond without first speaking with your CPA. Even a notice that appears routine may have a deadline, a proposed adjustment, or an information request that requires a careful, documented response.
If you are currently facing an IRS issue and are not being represented, that is the first gap to close. Form 2848 authorizes your CPA or attorney to communicate directly with the IRS on your behalf. Once that authorization is in place, you step back and your representative steps in.
And if you have never had a conversation with your CPA about what happens in an audit, what records you should be keeping, and how your returns are documented, that conversation is worth having before you need it.
At RYBD, we represent clients in IRS matters as part of our advisory practice. If you have received a notice, are facing an audit, or want to understand how your returns are documented and defended, we are glad to have that conversation.