ASK THE EDD LAWYER – IRS AND EDD TAXPAYER-EMPLOYERS’ BILL OF RIGHTS – THE MOST IMPORTANT RIGHT OF ALL
By Robert S. Schriebman
The IRS has had a version of a Taxpayer Bill of Rights (TBOR) for several decades. Over the years there have been many changes and expansions of taxpayers’ rights. The EDD has had in place only one version of the Employers’ Bill of Rights published as EDD Publication DE 195.
In mid February 2018 the IRS released FS-2018-2 setting forth 10 fundamental rights taxpayers have when dealing with the IRS. These 10 rights are as follows:
- The Right to Be Informed
- The Right to Quality Service
- The Right to Pay No More than the Correct Amount of Tax
- The Right to Challenge the IRS’s Position and Be Heard
- The Right to Appeal an IRS Decision in an Independent Forum
- The Right to finality
- The Right to Privacy
- The Right to Confidentiality
- The Right to Retain Representation
- The Right to a Fair and Just Tax System
The most significant right of them all is, in my opinion, the right to retain representation. In fact this right was in the original version of the TBOR and has never been repealed. It is the right to seek professional advice at any time during either the audit or collection process. This article will discuss this right with regard to both the IRS and the EDD.
The Importance of the Right to Retain Representation
The right to retain representation, at the IRS level, applies to your right to seek advice from a licensed attorney, CPA, or enrolled agent. At the EDD level it is the right to consult with anyone, including your barber or hair dresser. Anyone can represent you before the EDD. This may however, be the ticket to disaster especially when an unlicensed advisor that has little or no experience and has no idea what he/she is doing or talking about.
The right to seek advice is available anytime and anywhere. Many people make the mistake of assuming that the right to seek advice or representation must only take place at the beginning of the IRS or EDD involvement in your matter. Not true.
Your right to seek professional advice means that the audit or other proceeding must stop cold! You cannot be compelled to meet and confer with the IRS or the EDD against your will. It does not matter whether you wish advice at the beginning, middle, or end of an audit. Outside of the issuance of a summons or subpoena you cannot be compelled to continue the audit process.
In the EDD version of the Employers’ Bill of Rights, it states that you have a right to an impartial audit. EDD Publication DE 195 states, “You have the right to have someone, such as an attorney, enrolled agent or accountant present during the audit or to represent you in your absence.” When you give your representative an EDD Power of Attorney, it means that your representative is the taxpayer. You are allowed to completely stay off of the EDD’s radar. Some EDD auditors have trouble with this concept, but that is their problem not yours.
It is totally improper for an IRS or EDD employee to attempt to talk you out of your right to seek advice or representation. In fact, if you experience pushback from an IRS or EDD employee, you have the right to file a formal complaint. IRS employees are taught not to discourage any taxpayer from seeking advice. Ever since the IRS Oversight Hearings before the U.S. Senate, IRS personnel have been very mindful and observant of this right and do not attempt to discourage anyone from seeking representation.
Most of the complaints I receive involve EDD auditors discouraging taxpayers from seeking counsel or representation. It is a sure bet that that EDD agent is uninformed and most likely a bully. If you believe you are being bullied, you have the right to complain to the agent’s supervisor and even request that a different auditor be assigned to your matter.
I always advise anyone experiencing an IRS or an EDD audit to seek professional advice. Be prepared to pay for the advice. A free consultation is not worth the price. Once in a while I am asked, “What can you do for me that I cannot do for myself?” The answer to this question depends upon the facts in each case and what has transpired prior to the conference. Most professional advisors have extensive knowledge and experience. Remember, IRS and EDD auditors and collectors are not your friends. They are there to do a job and to make money for the government. Certainly any auditor or collector, who tries to talk you out of getting professional advice, is a road sign on the way to disaster.
As both a U.S. and California taxpayer, you have rights. Don’t let an uninformed agent tell you otherwise. Always be diligent and look out for the bully. Never take a bully lying down. Always file a complaint and do not hesitate to request that a new agent be assigned to your matter. You have a right to an objective and professional level audit.
Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 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 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.
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.
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 in addition to 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.
Web Site Article 320