With tax season just around the corner, the annual report from the National Taxpayer Advocate Service (“TAS”) is making headlines – for all the wrong reasons. This federally appointed office within the Internal Revenue Service (“IRS”) is responsible for assisting American taxpayers who are in burdensome, complex, and/or financially strenuous disputes with the IRS. In addition to providing filing support, the head of this office releases an annual examination of the key problems facing taxpayers and the tax filing system. The report for FY 2014, released January 14, 2015, described an exceptionally stark scenario for filers.
“A Major Serious Problem”
Nina Olson, the head of the TAS, focuses on four major points of conflict:
- “ the budget environment of the last five years has brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively;
- the lack of effective administrative and congressional oversight, in conjunction with the failure to pass Taxpayer Rights legislation, has eroded taxpayer protections enacted 16 or more years ago;
- the combined effect of these trends is reshaping U.S. tax administration in ways that are not positive for future tax compliance or for public trust in the fairness of the tax system; and
- this downward slide can be addressed if Congress makes an investment in the IRS and holds it accountable for how it applies that investment.”
The most immediate consequences filers face this year grow out of Ms. Olson’s first point. Notably, the IRS handled 160 million business and individual filings, 100 million phone calls, and approximately 10 million articles of written correspondence. With this volume of paperwork and high demand for manpower intensive responses, one would that correctly expect some things fell through the cracks. In fact, over 35% of phone calls to IRS customer service representatives went unanswered and 50% of written correspondences “were not handled timely” according to the TSA report. The diminished treatment resulted in US taxpayers either paying out of pocket for tax advice or foregoing expert advice altogether. As such, the National Taxpayer Advocate deemed this poor service “Major Serious Problem #1”.
For a closer examination of just how likely you or your organization are to be audited see this related post.