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Simple pleasures of the taxpayer...

Dmitri KostalginDmitri Kostalgin
Recently I had a chance to have a look at the materials of a conference held by the United States Tax Court. You heard that right. An interesting report caught my eye on the work of ‘Tax Clinics’ for low-income citizens. This is a separate interesting topic, but I would like to draw attention to one small detail. In the report there is a link to the Declaration of Taxpayers Rights which contains ten fundamental rights.

The fourth one literally says the following:

The Right to Challenge the IRS’s Position and Be Heard

Such a trivial thing – ‘to be heard’. There’s something in it though. Some qualitative characteristic. And this simple idea of ‘being heard’ is so much needed at any stage of appealing.

By the way, IRS kindly provides the declaration of rights in Russian. Canada has a similar declaration of rights, which contains no less than 16 rights and 5 additional principles relating to the administration of small businesses. I will give several examples which, to my mind, definitely evoke the feeling of envy Here’s one:

You have the right to expect us to be accountable.

and the other one:

You have the right to expect us to warn you about questionable
tax schemes in a timely manner.

But let’s get back to IRS. One could say that all those rights are described in quite a general and declarative manner. Who is going to respect them? And that’s where an interesting authority comes onto play, which, as I understand, is part of the IRS structure but is an independent and supervisory authority of the service operations. It is called Taxpayer Advocate Service (TAS). The authority’s slogan is ‘TAS – Your voice at the IRS’.

TAS assists taxpayers in handling disputes, helps low-income citizens, etc. They make an annual report for the Congress, in which they systematize the administration problems and suggest ways to solve them. The report’s structure focuses around each of the taxpayers rights listed in the Declaration. The 2014 report in full version is around 1000 pages, a short summary is about 100 pages.

I really want to believe that I will have the time to write about the most interesting aspects of the report. For starters, I’d like to mention an interesting fact about the general literacy of taxpayers in the US:

Less than half of taxpayers know that they have some kind of rights when dealing with tax authorities. And only 11% can name those rights.

Meanwhile, I suggest to speculate on whether Russian taxpayers need such Declaration.

P.S. And we haven’t even discussed the annual reports of tax authorities in India :-)

Photo: Hartwig HKD

Managing partner of Taxadvisor lawfirm