It may seem as though the IRS holds all the cards, but that simply is not true. Taxpayers here in Massachusetts and across the country may not be aware that there is a Taxpayer Bill of Rights. Number six on that list is the “right to finality,” which means that they have the right to know the maximum amounts of time they have to take certain actions and the maximum amounts of time the IRS has to take certain actions.
For instance, taxpayers only have a certain amount of time to file a return in order to claim a refund from a particular tax year. They only have a limited amount of time to appeal a decision of the IRS. Those deadlines may be different depending on what the taxpayer is appealing, such as a notice of additional tax or a notice of deficiency.
The IRS also has some time limits. Two that most people are concerned with are how long the IRS can take to assess more taxes and how long it has to collect unpaid taxes. The agency only has so long to assess any additional tax for a certain tax year. It has around 10 years to collect taxes that you owe. Of course, it is important to know that there are some notable exceptions to these rules.
Understanding the right to finality may not seem like an important right, but it cannot be underestimated. The timing can mean everything when it comes to whether the IRS can come after taxpayers for additional or unpaid taxes, can initiate audits, and more. Anytime a taxpayer receive correspondence or some sort of notice from the agency, it would be a good idea to discuss the matter with a Massachusetts tax attorney for a variety of reasons, including whether the agency is within the maximum time frame for taking certain actions.