In many cases, one of the best places to go is a little-known unit within the Internal Revenue Service known as the Taxpayer Advocate Service, or TAS, which has about 75 offices around the country.
Its mission: to help taxpayers resolve problems with the IRS — and to identify problems affecting groups of taxpayers and propose administrative and legislative changes.
TAS can help taxpayers get a missing refund, for example, or resolve an improperly imposed penalty that couldn’t be cleared up through regular channels. It can also assist taxpayers who face a financial hardship caused by an IRS action such as taking someone’s wages or other property.
In recent years, more people have been seeking help from TAS staffers, in part reflecting the IRS’s intensified focus on tax-law enforcement.
TAS received 247,839 cases in fiscal 2007, up 47% from 168,856 only three years earlier, says Nina Olson, the IRS National Taxpayer Advocate and head of TAS. This year, TAS expects to receive somewhere between 250,000 and 260,000 cases.
Clearing Up Snafus
TAS staffers can be especially helpful in clearing up nightmarish computer snafus that may seem simple but can linger for years. Specifically they have the authority to issue a “taxpayer assistance order” when someone is suffering, or about to suffer, a financial hardship as a result of the way the IRS is administering the law. These orders aren’t issued often, but sometimes they can be lifesavers.
Errors and Delays
Although lawyers and accountants tell similar stories of TAS staffers rescuing taxpayers from bureaucratic hell, critics say the quality of help can be uneven, and that even helpful and sympathetic TAS staffers make mistakes.
In a recent report, the Treasury Inspector General for Tax Administration said TAS “needs to improve its processing” of “economic burden” cases, those in which taxpayers are asking for TAS help because some IRS action or inaction is causing — or potentially creating — a financial hardship. The report said more than half of the cases it sampled contained “errors and delays,” adding: “We found evidence of untimely actions, technical errors and procedural errors.”
An informal survey by the National Society of Tax Professionals found many of those who responded were “disappointed” they couldn’t get the kind of help from TAS they had expected, says Beanna J. Whitlock, executive director.
“Because TAS is often the taxpayer’s last realistic chance to get a dispute resolved, TAS holds its case advocates to very high standards with respect to case quality, including timeliness, accuracy, completeness and educating the taxpayer,” she says. But she agrees there is “room for improvement” and says TAS is “working on a number of initiatives to improve case processing and reduce delays and errors.”
The Biggest Problem
Ms. Olson, who was appointed National Taxpayer Advocate in 2001, says TAS is “independent within the IRS.” She says she serves at the pleasure of the Treasury secretary, now Henry Paulson. Part of her job requires her to report directly to Congress twice a year. At midyear, she gives Congress her objectives for the coming fiscal year. Around year end, she delivers a much thicker report to Congress that identifies problems in tax administration and recommends administrative and legislative solutions.
That report includes her list of the 20 or so most serious problems facing taxpayers. The No. 1 problem in her latest report: “The Impact of Late-Year Tax-Law Changes on Taxpayers.”