to File Your Tax Return
Represent You Before the IRS? -
Get to Know Your Taxpayer Bill of Rights
Getting Ready to File Your Tax
Return: Health Coverage Exemptions and Payments
The Affordable Care Act requires you and your dependents to have health care
coverage, an exemption from the coverage requirement, or make a shared
responsibility payment for any month without coverage or an exemption with
your return. This law will affect your federal income tax return when you
file this year
Here are five things you should know about exemptions from the health care
law's coverage requirement and the individual shared responsibility payment
that will help you get ready to file your tax return.
You may be eligible to claim an exemption from the requirement to have
coverage and are not required to make a payment. If you qualify for an
exemption, you will need to file Form 8965, Health Coverage Exemptions,with
your tax return. You can claim most exemptions when you file your tax
return. However, you must apply for certain exemptions in advance through
the Health Care Insurance Marketplace,
If you receive an exemption through the Marketplace, you'll receive an
Exemption Certificate Number to include when you file your taxes. If you
have applied for an exemption through the Marketplace and are still waiting
for a response, you can put “pending” on your tax return where you would
normally put your ECN.
You do not need to file a return solely to report your coverage or to claim
a coverage exemption.
If you are not required to file a federal income tax return for a year
because your gross income is below your return filing threshold, you are
automatically exempt from the shared responsibility provision for that year
and do not need to take any further action to secure an exemption.
If you file a tax return and your income is below the filing threshold for
your filing status, you should use Part II of Form 8965, Coverage Exemptions
for Your Household Claimed on Your Return, to claim a coverage exemption.
You should not make a shared responsibility payment if you are exempt from
the coverage requirement because you have income below the filing threshold.
If you do not have qualifying coverage or an exemption for the year, you
will need to make an individual shared responsibility payment for each month
without coverage or an exemption when you file your return. Examples and
information about figuring the payment are available on the IRS Calculating
the Payment page
You or your tax professional should consider preparing and filing your tax
return electronically. Using tax preparation software is the easiest way to
file a complete and accurate tax return. There are a variety of electronic
filing options, including free volunteer assistance, IRS Free File for
taxpayers who qualify, commercial software, and professional assistance.
Who Can Represent You Before the IRS?
Many people use a tax professional to prepare their taxes. Tax professionals
with an IRS Preparer Tax Identification Number (PTIN) can prepare a return
for a fee. If you choose a tax pro, you should know who can represent you
before the IRS.
There are new rules this year, so the IRS wants you to know
who can represent you and when they can represent you. Choose a tax return
Representation rights, also known as practice rights, fall into two
Unlimited representation rights allow a credentialed tax practitioner to
represent you before the IRS on any tax matter. This is true no matter who
prepared your return. Credentialed tax professionals who have
representation rights include:
Certified Public Accountants
Limited representation rights authorize the tax professional to represent
you if, and only if, they prepared and signed the return.
They can do this
only before IRS revenue agents, customer service representatives and similar
They cannot represent clients whose returns they did not
They cannot represent clients regarding appeals or collection
issues even if they did prepare the return in question.
For returns filed
after Dec. 31, 2015, the only tax return preparers with limited
representation rights are Annual Filing Season Program Participants.
The Annual Filing Season Program is a voluntary program. Non-credentialed
tax return preparers who aim for a higher level of professionalism are
encouraged to participate.
Other tax return preparers have limited representation rights, but only for
returns filed before Jan. 1, 2016. Keep these changes in mind and choose
wisely when you select a tax return preparer.
Each and every taxpayer has a set of fundamental rights t(below) hey should be aware
of when dealing with the IRS. These are your Taxpayer Bill of Rights.
Explore your rights and our obligations to protect them on IRS.gov.
Get to Know
Your Taxpayer Bill of Rights
Every taxpayer has a set of fundamental rights. The “Taxpayer Bill of
Rights” takes the many existing rights in the tax code and groups them into
10 categories. You should be aware of these rights when you interact with
Publication 1, Your Rights as a Taxpayer, highlights a list of your rights
and the agency's obligations to protect them. Here is a summary of the
Taxpayer Bill of Rights:
The Right to Be Informed. Taxpayers have the right to know what is required
to comply with the tax laws. They are entitled to clear explanations of the
laws and IRS procedures in all tax forms, instructions, publications,
notices and correspondence. They have the right to know about IRS decisions
affecting their accounts and clear explanations of the outcomes.
The Right to Quality Service. Taxpayers have
the right to receive prompt, courteous and professional assistance in their
dealings with the IRS and the freedom to speak to a supervisor about
inadequate service. Communications from the IRS should be clear and easy to
The Right to Pay No More than the Correct
Amount of Tax. Taxpayers have the right to pay only the amount of tax
legally due, including interest and penalties. They should also expect the
IRS to apply all tax payments properly.
The Right to Challenge the IRS's Position and
Be Heard. Taxpayers have the right to object to formal IRS actions or
proposed actions and provide justification with additional documentation.
They should expect that the IRS will consider their timely objections and
documentation promptly and fairly. If the IRS does not agree with their
position, they should expect a response.
The Right to Appeal an IRS Decision in an
Independent Forum. Taxpayers are entitled to a fair and impartial
administrative appeal of most IRS decisions, including certain penalties.
Taxpayers have the right to receive a written response regarding a decision
from the Office of Appeals. Taxpayers generally have the right to take their
cases to court.
The Right to Finality. Taxpayers have the
right to know the maximum amount of time they have to challenge an IRS
position and the maximum amount of time the IRS has to audit a particular
tax year or collect a tax debt. Taxpayers have the right to know when the
IRS concludes an audit.
The Right to Privacy. Taxpayers have the right
to expect that any IRS inquiry, examination or enforcement action will
comply with the law and be as unobtrusive as possible. They should expect
such proceedings to respect all due process rights, including search and
seizure protections. The IRS will provide, where applicable, a collection
due process hearing.
The Right to Confidentiality. Taxpayers have
the right to expect that their tax information will remain confidential. The
IRS will not disclose information unless authorized by the taxpayer or by
law. Taxpayers should expect the IRS to take appropriate action against
employees, return preparers and others who wrongfully use or disclose their
The Right to Retain Representation. Taxpayers
have the right to retain an authorized representative of their choice to
represent them in their dealings with the IRS. Taxpayers have the right to
seek assistance from a Low Income Taxpayer Clinic if they cannot afford
The Right to a Fair and Just Tax System.
Taxpayers have the right to expect fairness from the tax system. This
includes considering all facts and circumstances that might affect their
underlying liabilities, ability to pay or ability to provide information
timely. Taxpayers have the right to receive assistance from the Taxpayer
Advocate Service if they are experiencing financial difficulty or if the IRS
has not resolved their tax issues properly and timely through its normal
In an effort to expand awareness, the IRS has made Publication 1 available
in English, Chinese, Korean, Russian, Spanish and Vietnamese.
The IRS will include Publication 1 when sending a notice to taxpayers on a
range of issues, such as an audit or collection matter. All IRS facilities
will publicly display the rights for taxpayers and employees to see.
If you have comments or
questions on the information in these articles, as usual feel
free to call our offices at 801-521-4538.
Ray Clark, CPA, MBA