FULL REPORT

1. PREFACE: National Taxpayer Advocate’s Introductory Remarks

2. REVIEW OF THE 2016 FILING SEASON

3. AREAS OF FOCUS

   1. IRS Implementation and Enforcement of Withholding on Certain Payments to Foreign Persons Under FATCA Is Burdensome and Error-Ridden, and Fails to Protect the Rights of Affected Taxpayers

   2. The IRS Plan for Implementing the Private Debt Collection Program Includes Practices That Will Harm Taxpayers and Tax Administration

   3. Despite Insufficient Internal Guidance, the IRS Continues to Levy on Retirement Accounts and Has Completed a Pilot for Levying on Thrift Savings Plan Accounts Through the Automated Collection System

   4. As the IRS Develops an Online Account System, It Risks Imposing Undue Burden on Taxpayers Who Require More Personalized Services

   5. Earned Income Tax Credit Reform Could Reduce the EITC Improper Payment Rate Without Reducing Participation by Eligible Taxpayers

   6. The IRS Re-Engineering of Its Identity Theft Victim Assistance Procedures Is a Step in the Right Direction But Does Not Go Far Enough

   7. The IRS’s Pre-Refund Wage Verification Program Continues to Incorrectly Flag and Substantially Delay Legitimate Refunds for Hundreds of Thousands of Taxpayers

   8. The IRS Should Reevaluate How It Develops and Uses Allowable Living Expense Standards

   9. As the IRS Has Gained Experience in Administering the Individual Provisions of the Affordable Care Act, It Has Addressed Some Previous Concerns But a Few Still Remain

   10. Challenges Remain As the IRS Implements the Employer Provisions of the Affordable Care Act

   11. Implementation of Congress’s Recent, Sweeping Changes to the Individual Taxpayer Identification Number (ITIN) Program Present Significant Challenges to Both Taxpayers and the IRS

   12. The IRS’s Offshore Voluntary Disclosure (OVD)-Related Programs Have Improved, But Problems Remain

   13. The IRS Innocent Spouse Unit, Faced With Increased Processing Times, Plans to Adopt Procedures That Are Not Based on Data, Burden Taxpayers, and Do Not Include Requiring Calls That Would Enhance the Accuracy of Determinations

   14. The IRS Is Aware That a Significant Proportion of Form 1023-EZ Applications It Approves Are Submitted by Organizations That Do Not Meet the Legal Requirements for IRC § 501(c)(3) Status, But It Has Not Acted to Correct Known Errors and Has Not Revised the Form to Prevent These Erroneous Approvals

4. TAS RESEARCH INITIATIVES

5. EFFORTS TO IMPROVE TAS ADVOCACY AND SERVICE TO TAXPAYERS

6. TAS TECHNOLOGY

7. APPENDICES

 

 

Volume II

IRS Responses and National Taxpayer Advocate's Comments Regarding Most Serious Problems Identified in 2015 Annual Report to Congress

In her 2015 Annual Report to Congress the National Taxpayer Advocate identified, analyzed, and offered recommendations to assist the IRS and Congress in resolving 24 of the most serious problems (MSPs) encountered by taxpayers. Volume II of this report includes the IRS formal comments on our recommendations, together with the National Taxpayer Advocate’s analysis of and responses to the comments. In this way, we retain full transparency regarding the IRS’s perspective on our recommendations to address the Most Serious Problems while still complying with the statutory protections.

Volume II - see above.