IRS Taxpayer Rights What Are They, What Is The Right To Finality

You may or may not know that taxpayers in the U.S. have certain rights. These rights apply to anyone whose taxes are being audited. And, these ten rights are called the taxpayer bill of rights. Therefore, anyone who has received a letter from the IRS of their intent to audit may want to exercise one of these rights, the right to finality. 

Here are eight things that you should know about the right to finality. 

1. The max time frame that the taxpayer has to challenge the IRS and its position.
2. The max time frame that the Internal Revenue Service has to audit a specified tax year or collect on a tax debt.
3. Once the Internal Revenue Service has completed an audit, the IRS has three years to provide an assessment for any additional taxes. The three-year time limit is from the date of that tax year’s file date. 
4. There is an exception to the 3-year time limit rule. And, this exception is based on specific circumstances. For instance, if the taxpayer has filed a fraudulent or false return, the time frame for this tax assessment is unlimited. 
5. In general, the IRS can collect unpaid taxes from a taxpayer for ten years. After which, there is no extension unless the taxpayer has agreed to a specific installment plan or the IRS has obtained a court judgment.
6. The 10-year rule can be suspended in some instances. Based on the circumstances, the suspension may be due to bankruptcy or ongoing collection efforts. 
7. A taxpayer must be sent a statutory letter from the IRS. This letter is a deficiency notice that states the following:
   • Deadline for the taxpayer to file their Petition
   • This Petition must be sent to the tax court challenging the amount that has been proposed.
8. In general, a taxpayer is only subject to one audit per year. However, if the IRS finds a reason, they may audit a previous year by re-opening it. For instance, the previous tax year can be audited if a taxpayer has filed a fraudulent return in any given year.