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IRS TCO: Taxpayer Rights and IRS Procedures

IRS TCO · Work through your exam, one topic at a time.

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Taxpayer Rights and IRS Procedures

This domain tests procedural protections: the Taxpayer Bill of Rights, notice and appeal routes, collection due process, collection alternatives, and the examiner's duty to respect deadlines and disclosure rules.

Core rules

  • The Taxpayer Bill of Rights includes ten rights: to be informed, to quality service, to pay no more than the correct amount of tax, to challenge the IRS position and be heard, to appeal in an independent forum, to finality, to privacy, to confidentiality, to retain representation, and to a fair and just tax system.
  • After an examination, a 30-day letter generally offers an Appeals protest. If the taxpayer does not protest, the IRS may issue a statutory notice of deficiency, often called a 90-day letter. The taxpayer then has 90 days to petition the Tax Court, or 150 days if outside the United States.
  • Collection Due Process under IRC §6320 for liens and §6330 for levies requires a timely request within 30 days of the notice. A timely request preserves Tax Court review. A late request may result in an equivalent hearing, but not Tax Court review of the determination.
  • Collection alternatives include installment agreements, offers in compromise, and currently not collectible status. They generally require compliance with filing, deposit, and estimated tax obligations, plus current financial disclosure.
  • The collection statute generally runs 10 years from assessment under IRC §6502, plus suspension periods. Penalty relief may be based on reasonable cause, first-time abate, or administrative waiver.
  • Representation is governed by Form 2848. IRC §6103 limits disclosure. The Taxpayer Advocate Service is reached through Form 911.

Worked example

A taxpayer receives a final notice of intent to levy and requests a CDP hearing 12 days later. Because the request is timely, levy action is suspended during the hearing, the taxpayer may raise collection alternatives, and the determination is reviewable by the Tax Court. If the request were 45 days late, the IRS could grant an equivalent hearing, but the taxpayer would lose Tax Court review. The result turns on the 30-day window, not the merits.

Traps that cost marks

Missing the 30-day CDP window; confusing the 30-day Appeals protest with the 90-day Tax Court petition; granting collection alternatives without verifying compliance; discussing an account with an unauthorized third party; and assuming a lien is released merely because collection is suspended.