Of Taxpayer Rights, Wrongs, and a Proposed Remedy

Abstract

Since 1988, Congress has enacted three "taxpayer bills of rights." Each of these bills has contained a series of amendments and additions to the procedural provisions of the Internal Revenue Code. Many of the new provisions have been prompted by anecdotes about taxpayers injured by the Internal Revenue Service (IRS). The article points out that, because anecdotes are rarely representative, and sometimes are inaccurate, the resulting legislation is more symbolic than effective. In fact, many of the so-called "rights" are actually duties imposed on the IRS without remedies for their violation. In addition, the bills have added costs to all tax controversies without regard to the usefulness of the new procedures to taxpayers.

Although "horror story" anecdotes of taxpayer abuses are not a representative basis for legislation, there are some taxpayers actually victimized by IRS agents. The article argues that taxpayers harmed by inappropriate IRS activity need more than symbolism. "Taxpayer bill of rights" legislation is unhelpful because it generally does not provide suitable remedies to injured taxpayers. Congress is currently considering Taxpayer Bill of Rights 2000, but that legislation does not address this issue. The article proposes instead a civil damage remedy to compensate taxpayers who suffer material harm resulting from IRS personnel violation of applicable laws or rules.