IR-2004-88, July 6, 2004
National Taxpayer Advocate Nina E. Olson
has delivered a report to Congress that
calls for enhanced protection of taxpayer
rights by tax administrators and
improvements in the offer-in-compromise,
collection due process and tax e-filing
programs.
The report, which is required by law, sets
out the objectives of the Office of the
Taxpayer Advocate for the upcoming fiscal
year and provides substantive analysis of
issues as well as statistical information.
“This year’s Objectives Report focuses
on the protection of taxpayer rights as a
mandatory component of tax
administration,” said Olson.
“Aggressive enforcement of taxpayer
rights assures taxpayers that the IRS’
aggressive enforcement of the tax laws
will be balanced and fair.”
The report identifies three measures to
bolster the protection of taxpayer rights:
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Preparation of a Taxpayer
Rights Impact Statement for New IRS
Enforcement Initiatives. The
IRS often implements new procedures,
guidelines or requirements that
further its enforcement or
administrative goals but may place a
significant burden on the time, rights
or privacy of taxpayers. In 1998,
Congress strengthened the Office of
the Taxpayer Advocate and created the
Taxpayer Advocate Service (TAS) to act
as a safety valve when institutional
tendencies within the IRS do not
adequately take account of taxpayer
rights. Beginning immediately, the
report states that the Office of the
Taxpayer Advocate will prepare a
Taxpayer Rights Impact Statement
(TRIS) on major initiatives to help
the IRS incorporate an awareness of
taxpayer rights into its program
planning and implementation. If
requested, the TRIS will be prepared
prior to program finalization and
implementation. If the IRS does not
request a TRIS prior to program
implementation, TAS will analyze the
program on its own accord, if and when
appropriate.
-
Improved IRS Employee
Training. Over the next few
years, the IRS will be hiring
thousands of new employees as part of
its initiatives to strengthen its
enforcement of the tax laws. For these
employees to pursue tax non-compliance
aggressively, yet fully respect
taxpayer rights, the report states
that they require training in the
foundational, technical and behavioral
aspects of tax administration,
including training in the importance
of customer service and respect for
taxpayer rights. During FY 2005, the
Office of the Taxpayer Advocate will
study key aspects of the IRS training
program for new employees and make
recommendations consistent with its
objectives.
-
Increased Awareness of TAS.
Other functions of IRS generally are
and should remain the first point of
contact for taxpayers needing
assistance with their problems, but
taxpayers must be better informed that
TAS is available as a safety valve
when regular IRS procedures fail, the
report says. A recent study
commissioned by the IRS indicates that
approximately 1.5 million taxpayers at
any given time meet the statutory
“significant hardship” test and
thereby qualify for TAS assistance. As
part of IRS employee training,
employees should be educated about
existing guidelines for referring
cases to TAS, the report recommends.
In addition, the study found that
approximately 43 percent of taxpayers
who qualify for TAS assistance at any
given time report that they feel
intimidated by the IRS. They therefore
are unlikely to call the IRS to obtain
assistance and are in danger of
becoming habitually noncompliant. The
Office of the Taxpayer Advocate has
developed an outreach strategy to
inform this taxpayer population about
TAS and its ability to assist these
taxpayers in resolving their tax
problems.
The report also focuses on the following
IRS programs:
-
Offers in Compromise.
An offer in compromise is a collection
alternative under which the IRS
accepts payment for less than the
amount owing, typically due to a
taxpayer’s inability to pay the full
tax debt or other special
circumstances. The objective of the
program is to bring closure to the
case, enable the IRS to collect the
agreed amount, and give the taxpayer a
“fresh start.” Although a 1998
House-Senate conference report stated
that “the IRS should be flexible in
finding ways to work with taxpayers
who are sincerely trying to meet their
obligations [and] should make it
easier for taxpayers to enter into
offer-in-compromise agreements,” the
Advocate’s report concludes that the
procedural requirements for obtaining
full consideration of an offer are
excessive and that too many offers are
rejected.
-
Collection Due Process.
In 1998, Congress gave taxpayers
subject to liens or levies the right
to obtain an independent review of
their cases to ensure that the IRS
collection action achieves the
appropriate balance between the
government’s and the taxpayer’s
interests, and that the IRS has
adhered to any applicable legal and
administrative requirements.
However, many taxpayers and their
representatives find the process
confusing and frustrating, the report
says, and they are often unclear about
fundamental items such as what a CDP
hearing is, when the process starts
and is completed, and what the hearing
is meant to achieve. During FY
2005, the Office of the Taxpayer
Advocate will work with the Office of
Appeals to try to improve
communications with affected taxpayers
and program implementation.
-
Electronic Filing of Tax
Returns. Congress and the IRS
have set goals of substantially
increasing the numbers of taxpayers
who file their returns electronically.
However, while taxpayers may file
paper returns without incurring any
return preparation and filing
costs (except a postage stamp),
taxpayers who file electronically
generally must pay to purchase a
commercial software or Internet-based
product and must pay separately to
file their returns. The IRS has an
agreement with private software
companies that, by its terms, ensures
that free e-filing service are
provided to at least 60 percent of
taxpayers. However, the report calls
on the IRS to make a template
available on its website that would
allow all taxpayers to file their
returns electronically without
incurring costs. The template would
provide taxpayers with the ability to
fill in the lines on the
Internet-based return, just as with a
paper return, but would not contain
the added features built into
commercial software products and thus
would not be intended to compete with
private industry.
The Taxpayer Advocate Service, an
independent function within the IRS, helps
individuals solve ongoing tax problems with
the IRS and recommends changes to mitigate
taxpayer problems. The Taxpayer Advocate
Service, with a workforce of more than 2,100
employees, is available to assist both
individuals and businesses. At least one
taxpayer advocate’s office is located in
each state.
You may qualify for the assistance of a
taxpayer advocate if:
-
You are facing a significant hardship
due to an action taken by IRS;
-
Your case has gone through all
established systems without being
resolved;
-
You are on the second attempt to
resolve a problem; or
-
You have not been contacted by the
date promised.
To request the assistance of a taxpayer
advocate, call 1-877-777-4778 (a toll-free
call).
Related Item: National
Taxpayer Advocate’s Fiscal Year 2005
Objectives Report to Congress - See
immediately below
National Taxpayer Advocate's FY
2005 Objectives Report to Congress
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National Taxpayer Advocate
Nina E. Olson has delivered a
report to Congress that calls
for enhanced protection of
taxpayer rights by tax
administrators and
improvements in the
offer-in-compromise,
collection due process and tax
e-filing programs.
“This year’s Objectives
Report focuses on the
protection of taxpayer rights
as a mandatory component of
tax administration,” said
Olson. “Aggressive
enforcement of taxpayer rights
assures taxpayers that the
IRS’ aggressive enforcement
of the tax laws will be
balanced and fair.”
FY
2005 Objectives Report to
Congress
Appendices IV and
VII are provided via the
following links:
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Source of Above: IRS.
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