Can the IRS Contact My Neighbors?

Understanding the Taxpayer Bill of Rights and IRS Communication

The Internal Revenue Service (IRS) is responsible for enforcing tax laws and collecting taxes in the United States. As part of this responsibility, the IRS may need to contact taxpayers to gather information or collect unpaid taxes. However, the IRS is also bound by certain rules and regulations that protect taxpayer privacy and rights. One of these rights is the right to confidentiality, which limits the IRS’s ability to disclose taxpayer information to third parties.

Taxpayer Bill of Rights

The Taxpayer Bill of Rights (TBOR) is a set of ten fundamental rights that taxpayers have when dealing with the IRS. These rights are designed to protect taxpayers from unfair or abusive treatment by the IRS and to ensure that taxpayers are treated fairly and respectfully.

The eighth right in the TBOR is the right to confidentiality. This right states that taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law.

IRS Communication with Third Parties

In general, the IRS cannot contact third parties, such as your employer, neighbors, or bank, to get information to adjust or collect the tax you owe unless it gives you reasonable notice in advance. This means that the IRS must first notify you of its intent to contact third parties and give you an opportunity to object.

There are some exceptions to this rule. For example, the IRS may contact third parties without your consent if:

• The IRS has a reasonable belief that the third party has information that is relevant to your tax liability.
• The IRS is conducting a criminal investigation.
• The IRS is collecting a tax debt that is in jeopardy of becoming uncollectible.

New IRS Notices

In 2019, the IRS began sending out new notices to taxpayers informing them of the IRS’s intent to contact third parties. These notices are intended to comply with the Taxpayer First Act, which was passed in 2019 and went into effect on August 16, 2019.

The new IRS notices state that the IRS intends to contact other persons—including potentially the taxpayer’s neighbors, banks, employers, and employees—about the taxpayer’s tax liability. However, the notices also state that the IRS will not actually contact third parties unless there is an intent at the time such notice is issued to contact persons other than the taxpayer.

What to Do if You Receive an IRS Notice

If you receive an IRS notice informing you of the IRS’s intent to contact third parties, you should take the following steps:

• Review the notice carefully to understand the IRS’s reasons for wanting to contact third parties.
• Contact the IRS to discuss the notice and to object to the IRS’s contact with third parties, if you wish.
• Keep a copy of the notice for your records.

The IRS has the authority to contact third parties to gather information or collect unpaid taxes. However, the IRS is also bound by the Taxpayer Bill of Rights, which protects taxpayer privacy and rights. If you receive an IRS notice informing you of the IRS’s intent to contact third parties, you should review the notice carefully and contact the IRS to discuss the matter.