IRS RESPONSE TO RECOMMENDATION: The IRS, with IRS Chief Counsel and the Department of Treasury, are working on proposed regulations under IRC section 6048 (REG-124850-08 and RIN 1545-BI04), which when published will give taxpayers the opportunity to provide additional comments, and when finalized, will incorporate and modify the scope of the exclusions from IRC section 6048 reporting in Rev. Proc. 2020-17. The NPRM is anticipated to be published by end of 2024.

CORRECTIVE ACTION: The IRS, with IRS Chief Counsel and the Department of Treasury, are working on proposed regulations under IRC section 6048 (REG-124850-08 and RIN 1545-BI04),
which when published will give taxpayers the opportunity to provide additional comments, and when finalized, will incorporate and modify the scope of the exclusions from IRC section 6048 reporting in Rev. Proc. 2020-17. The NPRM is anticipated to be published by end of 2024.

TAS RESPONSE: TAS is encouraged that the IRS, with IRS Chief Counsel and the Treasury Department, are working on the proposed regulations. While the proposed regulations and corresponding opportunity for public comment are important steps, TAS urges the IRS to also look for opportunities to further clarify the scope of the exclusions in plain language understandable to U.S. taxpayers abroad.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: ​​To determine whether a tax product is a candidate for translation, the IRS must perform the four-factor analysis (GAO 20-55 (Recommendation 4) and IRM 22.31.1.4(4)). These four factors analyze the number of limited-English proficient (LEP) taxpayers that would be served, the frequency and importance of the program, and the resource availability to provide the language assistance. The agency needs for language assistance are determined with the issuance of the Limited-English Proficient (LEP) Customer Base Report (CBR), as per Executive Order 13166, which provides IRS leadership with a comprehensive snapshot of the LEP taxpayers in the United States, based on Census Bureau data information. However, this report focuses on the LEP taxpayers in the United States, not on U.S. taxpayers living abroad; therefore, we do not know the needs of this part of the population, or even if these taxpayers would be considered “LEP” for receiving this type of service. The IRS would first need to initiate a research study to know if this population is considered LEP, which languages would apply to this population, and then tailor language-related initiatives and services geared toward this population.

CORRECTIVE ACTION: The IRS first needs to initiate a research study to know if this population is considered LEP, which languages would apply to this population, and then tailor language-related initiatives and services geared toward this population.

TAS RESPONSE: TAS strongly recommends that the IRS conduct the research study cited to identify the needs of the population of taxpayers living abroad. This should include identifying the most common international tax forms and instructions that need to be translated and the languages into which they should be translated. While TAS is encouraged that the IRS agrees to implement the TAS recommendation in part, the IRS’s response lacks clarity as to its overall plan, including the specific actions it will take, the anticipated duration of the study or other actions, and the phases the plan must pass through to reach implementation.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: ​Stakeholder Partnerships, Education and Communication (SPEC) currently offers Military Training and tax preparation on Military Bases abroad. However, this training and free tax preparation services is available for military personnel only. With regards to a virtual option for taxpayers living abroad, SPEC does not have the infrastructure to provide a facilitated virtual platform for taxpayer living abroad. This would require establishing a partnership in the U.S. with an organization willing to support this initiative. This includes developing an infrastructure to connect a US citizen living abroad to a certified VITA volunteers currently living in the US. In addition, the volunteer and taxpayer would need the proper virtual technology to communicate and share tax documentation(s) securely. Another concern is training for every country with different treaties would be a challenge for SPEC.

CORRECTIVE ACTION: N/A

TAS RESPONSE: ITAS is encouraged by SPEC’s efforts in offering military training and tax preparation on military bases abroad. TAS understands the IRS still faces barriers to implementing this recommendation; however, we urge the IRS to continue working to find mechanisms for furnishing the recommended virtual and in-person services for taxpayers living abroad. By expanding this initiative and offering a full suite of services via these appointments, the IRS would provide overseas taxpayers with crucial, long-overdue support.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: LB&I agrees with the recommendation and will lead a cross-functional team solely focused on assisting international taxpayers. Additional stakeholders for this recommendation include the Small Business/Self-Employed Division, the Wage & Investment Division, the Taxpayer Experience Office, and the Taxpayer Advocate Service.

CORRECTIVE ACTION: LB&I will lead a cross-functional team solely focused on assisting international taxpayers. Additional stakeholders for this recommendation include the Small Business/Self-Employed Division, the Wage & Investment Division, the Taxpayer Experience Office, and the Taxpayer Advocate Service.

TAS RESPONSE: TAS commends IRS LB&I for agreeing to lead a cross-functional team with the Small Business/Self-Employed Division, the Wage & Investment Division, the Taxpayer Experience Office, and TAS solely focused on assisting international taxpayers. With these efforts, the IRS can make strides toward bridging customer service gaps for taxpayers who live abroad. The National Taxpayer Advocate looks forward to receiving details regarding this team and reviewing the IRS successes in implementing this recommendation.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: We agree to explore the feasibility of adding chatbot and live chat services dedicated to issues unique to international taxpayers and provide an update by September 30, 2024. The update will include a plan of implementing feasible options. The IRS previously reviewed the ability of offering toll-free telephone services to international callers and determined it was not a feasible option. The U.S. vendor providing domestic toll-free services for the IRS does not have a universal international option. There are 10 countries that offer a service called Universal International Freephone Number which allows taxpayers to dial toll-free numbers in the U.S. using “landline” phones, but this service does not include cell phones or pay phones. The IRS also determined offering callback services to international callers was not a feasible option. To provide worldwide outbound calling, the IRS would need to establish outbound contracts with over 200 countries for both landline and wireless service. If contracts could not be set up with each country, this would create a risk of disparate treatment for the caller. Additionally, the IRS would lose the ability to record the outbound call for quality review and to fulfill certain Freedom of Information Act requests.

Today the IRS provides several services for all taxpayers. The IRS has published an expansive amount of information, publications, and forms on IRS.gov. There are several webpages (https://www.irs.gov/individuals/international-taxpayers) dedicated to Individual and Business International Taxpayers, including an expansive list of 50 frequently asked questions (https://www.irs.gov/individuals/internationaltaxpayers/frequently-asked-questions-about-international-individual-tax-matters). The IRS has self-help services available on IRS.gov, including IRS Online Account, Where’s My Refund, Where’s My Amended Return, Get Transcript, Bank Account and Credit/Debit payment options. The IRS has established interactive chatbot services that provide procedural and tax law assistance. The IRS continues to add new topics to chatbot services and has started offering live chat services as an escalation from a chatbot interaction on IRS.gov.

While the IRS does not currently have chatbot or live chat services dedicated to issues unique for international taxpayers, the IRS agrees to explore the feasibility of adding these services as an alternate form of assistance.

CORRECTIVE ACTION: We agree to explore the feasibility of adding chatbot and live chat services dedicated to issues unique to international taxpayers and provide an update by September 30, 2024.

TAS RESPONSE: TAS applauds the IRS’s continuing efforts to find ways to improve the customer experience for U.S. taxpayers abroad. Ensuring that this population has access to direct communication with the IRS is essential for supporting their unique needs and lessening their compliance challenges. We are encouraged that the IRS will explore the feasibility of adding chatbot and live chat services dedicated to issues unique to U.S. taxpayers abroad and provide an update by September 30, 2024. Recognizing the technological challenges that currently exist, TAS nonetheless encourages the IRS to continue to examine options for improving customer service, including via telephone, for as many U.S. taxpayers abroad as possible.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: The IRS must follow National Institute of Standards and Technology digital identity guidelines and required levels of authentication for a taxpayer to access their IRS online account. The IRS may not provide online access to someone who cannot authenticate at the required level through the current, or future, CSPs. The IRS is, however, committed to resolving the authentication challenges faced by taxpayers living abroad and worked with the current CSP to implement a number of process improvements. Taxpayers residing in foreign countries may now verify their identity via
a video call. During this process, the taxpayer has an opportunity to upload identity documents, wait for them to be reviewed, then join a live video call to complete the verification process. To ease translation issues, taxpayers may now submit a translated document as an accompanying document side-by-side with the original non-English document. In addition, taxpayers may also now use an international phone number to setup multi-factor authentication and create their account.

CORRECTIVE ACTION: N/A

TAS RESPONSE: TAS appreciates the IRS’s commitment to resolve the authentication challenges faced by U.S. taxpayers abroad. While TAS commends the IRS and current CSP for the recent changes that have improved the process, authentication challenges still exist for some U.S. taxpayers abroad. TAS encourages the IRS to continue to focus on evaluating the expansion and refinement of identity proofing options that meet the unique needs of this population.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: Currently the IRS allows individuals who meet certain exceptions to submit a Form W-7, Application for IRS Individual Taxpayer Identification Number, (ITIN) separate from an annual tax return. The Form W-7 instructions include five exceptions that allow qualifying individuals to apply for an ITIN any time during the year. However, we do not plan to allow individuals to submit alternate proof of a filing requirement with Form W-7. The Form W-7 requires applicants to prove their identity by providing original supporting documentation such as passports, driver’s licenses, and birth certificates, issued by a variety of domestic and foreign entities. Authenticating and processing these documents requires the authenticating party, such as Certified Acceptance Agents (CAA) or IRS employees, to physically handle and examine the documents for certain markers and characteristics not present on copies. For these reasons, the IRS disagrees with allowing CAAs to submit copies of supporting documentation. However, we are still considering options for modernizing the W-7 process that may include CAA participation for documents they are authorized to authenticate.

The IRS fully acknowledges how critically important original documents, such as passports, are to customers. After an identification document is validated, we promptly return it to the applicant’s address of record along with Form 14433, Return of Original Documents. If the applicant is experiencing a hardship, the Taxpayer Advocate Service can make a hardship determination and initiate a Missing Document Request.

The IRS continually considers improvement opportunities identified by internal and external stakeholder feedback. We requested funding for updates, enhancements, and improvements to the ITIN Real Time System (RTS) For example, we are exploring a new tool to automate address changes and notice generation by pulling data from the ITIN RTS. ITIN Operations has also been engaged in modernization discussions to enhance data quality, create efficiencies in processing, and improve data management for Form W-7. However, all developments and enhancements are contingent on the prioritization of funding and other initiatives.

Our ITIN employees have specialized training and experience necessary to accurately process ITIN applications including validating supporting identification documents. The customer experience is enhanced by these employees focusing on efficiently working ITIN applications. For this reason, we do not agree with the recommendation to establish a dedicated phone line to the ITIN unit. Customers may contact our toll-free telephone number staffed by Customer Service Representatives, who can provide the status of ITIN applications, as well as request missing identification documents.

In January 2024, the IRS launched a new page on irs.gov where taxpayers can find current wait times for correspondence, key forms including Form W-7, letters, and notices (https://www.irs.gov/help/processing-status-for-tax-forms). We will continue to post ITIN processing times based on the received dates of Forms W-7.

CORRECTIVE ACTION: We are exploring a new tool to automate address changes and notice generation by pulling data from the ITIN RTS. ITIN Operations has also been engaged in modernization discussions to enhance data quality, create efficiencies in processing, and improve data management for Form W-7. However, all developments and enhancements are contingent on the prioritization of funding and other initiatives.

TAS RESPONSE: Modernizing the ITIN process is critical as certain taxpayers are unable to comply with their federal tax obligations or receive tax benefits for which they legally qualify if they don’t have an ITIN. TAS appreciates that the IRS has asked for funding that could lead to some significant improvements in the process, but we are disappointed that the IRS is rejecting parts of the recommendations. TAS will continue to consult with the IRS on these matters.

While TAS agrees that the customer experience is enhanced by ITIN unit employees efficiently working ITIN applications, TAS also believes the customer experience would be further improved if ITIN applicants were able to communicate with those employees via a dedicated phone line and directly benefit from their wealth of specialized training and experience. Furthermore, while TAS supports the effort behind the new webpage, we question whether the information is presented in a way that is understandable and meaningful to all taxpayers. TAS encourages the IRS to continue to find ways to provide taxpayers, particularly those for whom English is not their first language, a better understanding of ITIN processing times and to highlight the information on webpages targeted towards ITIN applicants and the international community.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 6/30/2027

IRS RESPONSE TO RECOMMENDATION: Grant funding can support the infrastructure that supports tax preparation (e.g., computers, internet), but should not be directly tied to tax preparation services. We will work with Counsel to re-examine the policy to determine if the Certifying Acceptance Agent program can now be supported by VITA/TCE grant funding. Note that the Taxpayer First Act will need to be considered when making a final determination on the eligibility of grant funds for this purpose.

CORRECTIVE ACTION: We will work with Counsel to re-examine the policy to determine if the Certifying Acceptance Agent program can now be supported by VITA/TCE grant funding. Note that the Taxpayer First Act will need to be considered when making a final determination on the eligibility of grant funds for this purpose.

TAS RESPONSE: TAS fully supports the IRS consulting with Counsel to determine whether the CAA program can be supported by VITA/TCE grant funding and looks forward to continuing to work with the IRS on this matter.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: The IRS already provides additional time for overseas taxpayers to respond to correspondence. For example, international taxpayers are given 30 days to provide necessary information to complete processing their return while domestic taxpayers are given a shorter 20-day turnaround time. In certain specialized international programs, we include a local fax option for submitting responses faster than regular mail. Internal Revenue Manual 21.3.3.4.16.1, Preparing Outgoing Manually Generated Correspondence, requires we provide an assistor’s name, telephone number, and a unique identifying number so international taxpayers can make direct contact with respect to correspondence.

Using regular mail is only one option available to overseas taxpayers. The applicable website (https://www.irs.gov/help/contact-my-local-office-internationally) includes information about our International Taxpayer Service Call Center, fax numbers, and where to send correspondence for individual and business tax matters. Although most overseas taxpayers must call a phone number that is not toll-free number to reach the IRS, residents of Puerto Rico and the U.S. Virgin Islands can use the IRS toll free number.

CORRECTIVE ACTION: N/A

TAS RESPONSE: TAS is disappointed with the IRS response to this recommendation and views it as a failure to acknowledge practical burdens that taxpayers located outside of the United States face. The extended timeframes for response accorded to taxpayers abroad, including the extra ten days cited by the IRS, are insufficient, especially considering the additional 60-day time period that Congress provided to these taxpayers in IRC § 6213. While it is encouraging that the IRS allows alternate options for taxpayers to respond to the IRS faster, these options may not be practical or readily available to taxpayers abroad. Additionally, the IRS does not acknowledge that delays result from outgoing IRS mail reaching taxpayers abroad in the first place or consider how it could communicate faster, thus placing the burden on taxpayers to change methods of communication to meet already insufficient time deadlines. For taxpayers abroad, lack of timely notification from the IRS causes them to lose critical administrative, due process, and judicial rights. We urge the IRS to reconsider this recommendation. This simple administrative change would go a long way in recognizing the burdens faced by taxpayers abroad due to postal delays and assisting these taxpayers with minimal change to IRS procedures.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: Passport certification only applies to taxpayers with seriously delinquent tax debt. At this late stage in the collection process, the taxpayer has had multiple opportunities to resolve their tax debt and pay their liability. For passport certification to occur, a final notice of the IRS’s intent to issue a levy must have been issued and a levy made, or a Notice of Federal Tax Lien must have been filed. Specifically, before certification, the taxpayer receives Letter 1058 (L1058) or LT11, Final Notice – Notice of Intent to Levy and Your Notice of a Right to a Hearing, or Letter 3172, Notice of Federal Tax Lien and Your Rights to a Hearing Under IRC 6320, along with Publication 594, The Collection Process. These letters advise that denial or revocation of their U.S. passport is a possible next step if the taxpayer is individually liable for tax debt totaling more than $62,000 in calendar year 2024 and doesn’t pay the amount owed or make alternative arrangements to pay. These letters also explain how to seek review of the taxpayer’s underlying liability or the collection action by the IRS Independent Office of Appeals. This statutory period to appeal provides an opportunity for the taxpayer to resolve the tax liabilities and appeal before the IRS sends a certification to the Department of State. Prior to making a recommendation for revocation, the Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, is issued to the taxpayer’s address of record. The Letter 6152 currently provides an additional 60-day response time beyond that provided domestically (90 days vs. 30 days).

CORRECTIVE ACTION: N/A

TAS RESPONSE: The only direct precertification notice that the IRS provides to taxpayers that their passports may be revoked is a paragraph on the second page of a CDP notice that the IRS may have issued months or even years prior to a certification. This is inadequate and fails to satisfy the taxpayer right to be informed. Because of the vital importance of a passport to U.S. citizens, especially to those abroad, providing a precertification notice to taxpayers would ensure that taxpayers understand the consequences of a seriously delinquent tax debt certification and would encourage compliance.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A