National Taxpayer Advocate Identifies Problems with IRS Collections

The National Taxpayer Advocate, Nina E. Olson, recently released her 2013 Annual Report to Congress. The National Taxpayer Advocate leads the Taxpayer Advocate Service, a division within the IRS that helps taxpayers experiencing a problem with the IRS.

Taxpayers may request assistance from the Taxpayer Advocate Service by completing Form 911, Request for Taxpayer Advocate Service Assistance. The Taxpayer Advocate Service may help a taxpayer if the problem is causing financial difficulties, creating an immediate threat of adverse action, or if the IRS is not responding to the taxpayer after repeated inquires.

The Annual Report to Congress is delivered directly to the tax-writing committees in Congress, with no prior review by the IRS. The report creates a forum where the highest levels of government can address taxpayers’ problems, protect taxpayers’ rights, and relieve taxpayers’ burden.

The report identifies twenty-five of the most serious problems facing taxpayers and offers recommendations to Congress on how to fix them. The National Taxpayer Advocate highlighted the following problems related to IRS collection policies and practices:

• The Automated Collection System (ACS) is not using the most effective methods for resolving cases and collecting liabilities. As a result, collection yields are low, productive case resolutions are infrequent, and taxpayers are subject to unnecessary harms.
• The existing IRS collection strategy fails to recognize and meet the needs of business taxpayers in resolving collection issues. The delays in providing adequate assistance harm business taxpayers and contribute to substantial amounts of lost revenue.
• The IRS does not have a plan to resolve taxpayer accounts with extensions of the statutory period for collection that exceeds its current policy limit of five years. The National Taxpayer Advocate is concerned that the IRS is doing nothing about it. By simply placing these accounts in currently not collectible (CNC) status or in the collection queue without a plan to collect these accounts, the IRS is likely to hold these uncollectible debts over taxpayers’ heads instead of pursuing a permanent resolution.
• The current Collection Due Process (CDP) hearing procedures unfairly favor Collections and do not provide the taxpayer with a fair and impartial hearing. Without receiving an impartial, independent hearing from Appeals, taxpayers will continue to face unnecessary emotional and economic hardship.

Read about all twenty-five problems identified in the annual report here.

Submitted by Peter J. Graziano on Thu, 01/16/2014 – 15:54