This article originally appeared in the November-December 2016 issue of New Jersey CPA Magazine. Click here to view the original article.
The Office of the Taxpayer Advocate, hailed as "your voice at the IRS," was established by Congress in 1996 and acts independently of any other IRS office. The goal of the Taxpayer Advocate Service (TAS) is to ensure problems encountered by individual and business taxpayers that have not been resolved through normal IRS channels are handled promptly and fairly. The TAS also addresses systemic issues — large-scale or "big picture" problems that potentially affect multiple taxpayers.
The TAS is led by Nina E. Olson, the national taxpayer advocate, who is also responsible for submitting two yearly reports to the House Ways and Means Committee and the Senate Finance Committee. The statute requires that these reports be submitted directly to the committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The Annual Report addresses the most serious problems encountered by taxpayers, legislative and administrative recommendations for solving those problems, and a discussion of the most frequently litigated tax issues. The Objectives Report describes the goals and actions planned by the Office of the Taxpayer Advocate for the coming fiscal year.
The most recent Annual Report was submitted in December 2015. A few of the most serious problems Olson identified were reduction of telephone and face-to-face taxpayer service, reductions in staffing of the practitioner priority service phone lines, the burden of IRS user fees when added to the standard costs of compliance, and delay of refunds for victims of identity theft.
In the most recent Objectives Report, submitted in June 2016, Olson identified a number of areas of focus, including the implementation of a private debt-collection program, assistance for victims of identity theft, assistance for victims of return preparer fraud, easing the compliance burden imposed by the Foreign Account Tax Compliance Act (FATCA), and migration to online services without compromising face-to-face and telephone services.
Taxpayer Bill of Rights
The Taxpayer Advocate Service also focuses on protecting taxpayers' rights. To this end, the IRS has adopted a Taxpayer Bill of Rights (as proposed by Olson) that includes 10 basic rights every taxpayer has when interacting with the IRS. These rights are as follows:
- The right to be informed.
- The right to quality service.
- The right to pay no more than the correct amount of tax.
- The right to challenge the IRS's position and be heard.
- The right to appeal an IRS decision in an independent forum.
- The right to finality.
- The right to privacy.
- The right to confidentiality.
- The right to retain representation.
- The right to a fair and just tax system.
The Role of the TAS in Resolving Taxpayer Issues
The Taxpayer Advocate Service has taken a significant role in resolving the day-to-day issues clients and their advisers face. For a case to qualify for taxpayer advocate assistance and for the TAS to operate efficiently and effectively, one or more of the criteria outlined below must be met.
- The taxpayer is experiencing economic harm or is about to suffer economic harm.
- The taxpayer is facing an immediate threat of adverse action, such as a levy issuance.
- The taxpayer will incur significant costs if relief is not granted (including fees for professional representation).
- The taxpayer will suffer irreparable financial harm or long-term adverse impact if relief is not granted.
- The taxpayer has experienced a delay of more than 30 days to resolve a tax account problem.
- The taxpayer has not received a response or resolution to the problem or inquiry by the date promised.
- A system or procedure has either failed to operate as intended or failed to resolve the taxpayer’s problem or dispute within the IRS.
Best Interest of the Taxpayer
- The manner in which the tax laws are being administered raises considerations of equity or has impaired or will impair the taxpayer’s rights.
- The national taxpayer advocate determines that there is compelling public policy that warrants assistance be offered to an individual or group of taxpayers.
To initiate a case with the Taxpayer Advocate Service, taxpayers, or an authorized representative, should complete Form 911, Request for Taxpayer Advocate Service Assistance and mail — or, for a quicker response, fax — the request to a local TAS office. With approximately 2,000 employees, the TAS maintains offices in every state, the District of Columbia, and Puerto Rico. The local advocate’s contact information can be found at www.irs.gov/advocate or in IRS Publication 1546, Taxpayer Advocate Service, Your Voice at the IRS. Affected taxpayers may also call the national taxpayer advocate at 877-777-4778 for additional information and assistance.
A taxpayer advocate will generally respond within one week of receiving Form 911. If one or more of the previously discussed criteria are met, the advocate will work to get the problem resolved. The case will be assigned to one particular advocate, enabling the taxpayer or representative to have one main point of contact throughout the process.
The worst thing a taxpayer can do is nothing at all. When in doubt, the taxpayer should ask the Taxpayer Advocate Service for help. The TAS will apply its independent judgment to the issue and make a determination as to what would be the proper outcome. The TAS will then interact with the appropriate personnel at the IRS on the taxpayer's behalf. While there is no guarantee that the outcome will always be satisfactory, the TAS will at least be forthcoming with an explanation of what is beyond its scope. Remember, the Office of the Taxpayer Advocate is "your voice at the IRS."