We give the Internal Revenue Service an incredible amount of personal data. Our Social Security numbers. Our earnings amounts. Our family information.
That's why folks are, rightfully, freaking out about the amount of tax identity theft out there.
But in addition to crooks getting their hands on our assorted personal, tax and financial data, there's also a legitimate concern about how the IRS handles all our private information during its routine operation.
Taking care of TBOR: The agency is trying assuage some of those worries by emphasizing the Taxpayer Bill of Rights (TBOR) and how it protects taxpayer privacy.
In 2014, the IRS adopted this set of 10 fundamental rights — including the right to privacy — that every taxpayer should be aware of when dealing with the IRS. Last year, Congress added those same rights to the Internal Revenue Code. Federal law now requires the IRS commissioner to ensure that IRS employees are familiar with and act in accordance with the TBOR.
You can find them in IRS Publication 1, Your Rights as a Taxpayer. But if you don't have time to thumb through that document, here are the highlights of taxpayer privacy rights.
Keeping the IRS at a distance: In essence, the right to privacy is a way to keep the IRS from delving any deeper into our lives than it needs to in order to do its job.
Taxpayers have the right to expect that any IRS inquiry, examination or enforcement action will comply with the law and be no more intrusive than necessary, according TBOR's privacy plank.
The IRS also pledges to respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.
Collection privacy: In collection actions, the IRS says its privacy policy also provides taxpayers specific protections. They include:
- Limits on the amount of wages that the IRS can levy, that is, seize, in order to collect tax that you owe.
- Protection against seizure of certain personal items, such as necessary schoolbooks, clothing, undelivered mail, and certain amounts of furniture and household items. Additionally, the IRS cannot seize your personal residence without first getting court approval, and it must show there is no reasonable alternative for collecting the tax debt from you.
- Limits on financial paperwork required when submitting an offer to settle your tax debt where the offer relates only to how much tax you owe. In these cases known as a Doubt as to Liability Offer in Compromise, you do not need to submit any financial documentation.
- No added IRS prying. The IRS should not seek intrusive and extraneous information about your lifestyle during an audit if there is no reasonable indication that you have unreported income.
In addition, the IRS says that during collection hearings, its Office of Appeals must consider whether the IRS' proposed action balances the need for efficient tax collection with the taxpayer's legitimate concern about how intrusive such actions are.
Privacy while at IRS.gov: In addition, the IRS notes that when we visit IRS.gov, which it is urging taxpayers to do instead of calling or visiting taxpayer centers in person, the agency doesn't collect personal information about us.
The IRS says that its Privacy Office "ensures that your personal information is protected whenever you visit the IRS website."
Note, though, that some of us use the various online tools at IRS.gov that require we submit personal data.
When it comes to those applications, ranging from ordering forms to signing up for electronic newsletters to learning the status of filed returns, the IRS notes that such actions are voluntary and using them "implies your consent for us to use this data in order to respond to your specific request."
You can check out the IRS' special Web page where it details its privacy policy.
You also can find more about the TBOR and what it means to you visit at the National Taxpayer Advocate's website.
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