ASK THE EDD LAWYER – EXPLAIN THE LATEST VERSION OF THE IRS TAXPAYER’S BILL OF RIGHTS (TBR4)? WHAT IMPACT WILL IT HAVE ON THE EDD?
By Robert S. Schriebman
In June 2014, the IRS issued its latest version of Publication No. 1, “Your Rights as a Taxpayer.” The EDD has not revised its standard publication DE 195 Employers’ Bill of Rights. The EDD’s version was updated in January 2013. Even though the EDD does not concurrently revise its Bill of Rights whenever the IRS does, the EDD follows a policy of integrating the IRS’s latest version into their field practice. The current IRS Publication 1 is the fourth version of the Taxpayer Bill of Rights. We will refer to this latest version as TBR4. The later versions never repeal prior IRS versions. It seems as if the IRS Bill of Rights keeps growing with every scandal uncovered by Congress.
KEY PROVISIONS OF THE NEW IRS TBR4
The Right to Retain Representation
We get many calls from people who are about to be audited by either the IRS or EDD. Most callers have an IRS or EDD audit appointment in the near future, and they are concerned about whether they can postpone the audit in order to meet and confer with a tax professional prior to the audit as they may want to retain the tax professional to represent them before the IRS or EDD. Some people have told me that the IRS or EDD representative refused to postpone the audit appointment to allow for a professional consultation. When I tell them that they have an absolute right to postpone the audit, or any meeting with the IRS or EDD for that matter, they are frightened and skeptical and believe that the appointment is chiseled in stone and can not be continued.
Let me assure you that both the IRS and EDD know and understand any taxpayer’s right to have conferences and meetings continued in the interest of securing both professional advice and representation. If you are being audited by the IRS or EDD and you want to meet and confer with a tax professional before that meeting you have the right continue that conference. It is that simple.
Even if you have a scheduled meeting with a tax collector, you have the same right to professional advice and representation before that collection conference takes place. If any IRS or EDD employee tells you that you do not need representation, and that everything can be worked out in a friendly IRS or EDD one-on-one conference, your danger antennae should go up because the chances are that meeting is not going to result in a win-win end result.
Here is what Publication 1 has to say about your right to retain representation:
“Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.”
The Right to Quality Service
TBR4 provides that we taxpayers have a right to receive prompt, courteous, and professional assistance when dealing with the IRS. As part of this right the IRS must strive to provide clear and easily understandable communications. If you feel that the IRS representative has not been clear enough for you, you have the right to contact that individual’s supervisor.
The long standing EDD version of TBR has had a version of this right for many years. Taxpayer’s are entitled to courteous and timely service from the EDD, and a taxpayer has the right to meet and confer with the agent’s supervisor if the agent is neither clear nor courteous. The EDD TBR also provides that a taxpayer is entitled to accurate information and assistance if a taxpayer has any questions or desires for further information on any issue. In my practice I found EDD supervisors accessible and courteous.
One of the outstanding features in working with the EDD is the accessibility of the EDD Taxpayer Advocate. The Advocate can be contacted either by phone or fax by going to the EDD website for contact information. Many problems can be cleared up and resolved through the Advocate thus saving both taxpayers and their representatives’ time and money.
The Right to Challenge the IRS’s Position and Be Heard
Publication 1 states:
“Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect to that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.”
We recently represented a client before the IRS in a very difficult audit situation where our client was not cooperative in supplying the IRS with documentation to backup computer-generated summaries. Frustrated, the IRS agent issued a final audit report and a huge assessment together with penalties. We were successful in reopening the audit and resolving the matter at agent level without having to go through a formal expensive appeal process. We were very pleased with the cooperation shown by both the agent and the agent’s supervisor.
The EDD version of TBR clearly sets forth your right to appeal from an EDD Notice of Assessment or a denial of a claim for a credit or a refund. To begin the EDD appeal process you must file a petition. These rules and time limits are clearly set forth in the publications that accompany the audit result or the claim denial.
The Right to Appeal an IRS Decision in an Independent Forum and the Right to Finality
These two rights are nothing new. I have been practicing for over 40 years. Ever since I have been in practice the IRS has had in place a structured appeal process that informs the taxpayer of exactly how much time he or she has to appeal and challenge any audit. Ever since Ronal Reagan was in office the IRS has had a clear ten-year statute of limitations to collect any outstanding deficiency. There are limited circumstances that will extend this time such as the filing of a bankruptcy proceeding or the submission of an offer in compromise. I do not see anything new here.
The EDD version of TBR has extensive language on your right to an installment payment agreement if immediate and full payment of payroll taxes creates a financial hardship. Recent changes in the EDD collection manual provide more liberal time limits for installment payment agreements.
The Right to Privacy and a Right to a Fair and Just Tax System
These rights have been in place for decades. There really is not anything new that is stated in Publication 1. The IRS has always sought to safeguard privacy. I have met in person and spoken on the phone to countless IRS employees over the years. I cannot recall one instance where the IRS employee did not zealously guard the taxpayer’s privacy. It is unfortunate that the recent IRS scandal involving conservative political elements have made the IRS appear not to protect the public’s interest. This is simply not so. There will always be individuals who think the rules do not apply to them whether in politics or simply commuting to work in your car. Unfortunately, laws written in books mean nothing to these people.
TBR4 does not have much that is new. Most of the provisions are restatements of earlier versions of TBR and much is nothing more than an attempt at positive public relations.
An EDD lawyer, Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States.
As a trusted EDD attorney, Robert S. Schriebman has successfully dedicated more than 30 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House and the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure”, both published by Commerce Clearing House.