Status: Closed
Completion Date: 12/31/2023

Quarterly Update:
1st Quarter: ​The Taxpayer Advocate Service (TAS) continued to analyze tax return data in Fiscal Year (FY) 2023. On December 31, 2022, the National Taxpayer Advocate (NTA) published a study report, entitled, “Exploring Earned Income Tax Credit Structures:  Dividing the Credit Between a Worker and Child Component and Other Considerations,” which addressed this objective. As indicated in the study report, this objective was modified slightly. This objective is closed.

Status: Open
Expected Completion Date: 12/31/2023

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) continued to analyze why taxpayers often do not respond to various types of IRS notices and letters in the first quarter of Fiscal Year (FY) 2023. Actions we took included reviewing internal processes to identify ways to improve efficiency when processing taxpayer responses, identifying ways to clarify communication so taxpayers understand what actions they should take, and conducting focus groups and surveys with taxpayers who have not responded to specific types of IRS correspondence to determine and quantify the reasons for non-response.

2nd Quarter: During this quarter, TAS continued analyzing why taxpayers often do not respond to various types of IRS notices. Further, TAS prepared the screener and moderator guides for taxpayer interviews, as well as to prepare the necessary documentation for Office of Management and Budget approval documents to conduct the taxpayer interviews. Also, TAS worked to quantify the number of notices mailed out to determine the reasons for non-response.

3rd Quarter: During the third quarter, we completed our analysis of why taxpayers do not respond to IRS notices and letters by completing our review of the IRM and comparing the notice processing procedures identified in taxpayer interviews. Also we completed the discussion guide for interviews with taxpayers about why they did not respond to IRS correspondence audits and secured IRS Privacy Office approval to conduct the interviews. However, delays in obtaining approvals will delay the final analysis until September 2023.

4th Quarter: During the fourth quarter, the Taxpayer Advocate Service has selected a group of taxpayers that the vendor conducting this research can interview to better understand why taxpayers often do not respond to IRS notices. However, the interviews have been delayed because of delays in the background check process for the vendor. Because of these delays, IRS Procurement has extended the contract until the end of calendar year 2023. Also, we have obtained the response rates for all notices where the IRS has appropriate data to determine the percentage.

This objective will continue in Fiscal Year 2024.

Status: Open
Expected Completion Date: 03/31/2024

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) continued to advocate for improved collection policies and procedures through discussions with IRS Collection policy leaders and in reviewing Internal Revenue Manual (IRM) provisions and correspondence to taxpayers. During the first quarter, we proposed specific revisions to the IRM procedures to require the IRS to wait for 120 days (up from the current 105 days) after issuing a notice of deficiency before assessing additional tax to prevent premature assessments; however, the IRS responded in the ARC 2021 Report Card that it would not be feasible. Also, we worked on proposing specific revisions to IRM procedures to require the IRS to defer collection activity until 45 days after the IRS addresses the merits of a taxpayer’s correspondence and revisions to Notice CP 15, Civil Penalty Notice, when issued for assessable penalties. Additionally during the quarter, we worked on revisions to IRM procedures to allow the IRS to consider changes in taxpayers’ circumstances when determining the installment agreement user fee. The National Taxpayer Advocate plans to address Offset Bypass Refunds (OBRs) issues in her 2022 Annual Report to Congress in the Most Serious Problems (MSP) section.

2nd Quarter: ​TAS continued to advocate for improved collection policies and procedures in the second quarter by working with IRS’ Small Business/Self Employed (SB/SE) function to stand up a cross-business operating division (BOD) team where TAS will help develop both short-term and long-term solutions to improve taxpayer services to mitigate premature assessments and potential tax court delays with processing petitions.  Also during the second quarter, we proposed revisions to the Internal Revenue Manual (IRM) section 21.5.2.4.8.2 because the current programming only allowed for a maximum of 15 cycles if there is an open control. The changes we proposed, and IRS made to the IRM in March, incorporated the recommendation to allow the number of cycles needed for information to post when a taxpayer requests a hold on collection while their request is being worked.  Further, TAS met with IRS regarding two notices, the Civil Penalty Notice and the Civil Penalty Assessment, to discuss adding additional language to advise taxpayers they will not be provided additional opportunities to dispute the liability.  TAS is analyzing the notices and will make recommended changes in the third quarter.  Lastly, we continued to advocate for collection policies and procedures impacting taxpayers focused on Installment Agreements (IAs).  The Bipartisan Budget Act allows for waiver or reimbursement of the IA user fee in cases of any taxpayer with adjusted gross income, as determined for the most recent year where the information is available, which does not exceed 250 percent of the applicable  poverty level.  Though the law specifies who can qualify for waiver, there are no restrictions on how the funds are collected.  TAS continues to meet with the IRS to pursue a change of how the IA fee are collected.

3rd Quarter: During the third quarter, TAS recommended revisions to the Automated Underreporter (AUR), SB/SE Technical Services and Campus Examination Internal Revenue Manual procedures to require the IRS to wait 120 days up from the current 105 days, or 180 days if the taxpayer is outside the United States when the notice is mailed or the notice is mailed to an address outside the United States, if the taxpayer does not petition the Tax Court or agree to the deficiency to prevent premature assessments. Also, we continued to meet with IRS regarding Notice CP15, Civil Penalty Notice and Notice CP215, Civil Penalty Assessment to discuss an issue with Appeals to determine which paragraphs qualify in order to recommend changes to IRS.

4th Quarter: During the fourth quarter, the IRS’ Automated Underreported (AUR) unit, Small Business/Self-Employed (SBSE) and Campus Examination all denied TAS’s recommendations to their Internal Revenue Manual (IRM) procedures to increase the days before making an assessment by 15 days from 105 to 120 days to prevent premature assessments when a taxpayer files a petition with tax court. Examination noted that as of May 2022 the Tax Court eliminated its backlog and IRS is receiving timely notification of the filing of taxpayer petitions, and as such, there is no longer a concern with premature assessments. Also, the Taxpayer Advocate Service (TAS) continued meeting with IRS regarding Computer Paragraph (CP) notice 15, Civil Penalty Notice and CP215, Civil Penalty Assessment, and we are currently discussing the issue with Appeals to determine which paragraphs qualify in order to recommend changes to IRS. Further, TAS continued meeting with IRS and most recently advocated for the IRS to allow taxpayers whose Installment Agreement (IA) payment is less than the user fee to pay the user fee over the life of the IA rather than with the initial payment. Talks are still ongoing regarding this issue.

This objective will continue in Fiscal Year 2024.

Status: Open
Expected Completion Date: 03/31/2024

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) continued our work with IRS to end the systemic assessment of International Information Return (IIR) penalties during the first quarter of Fiscal Year (FY) 2023. We have contacted the office of Servicewide Penalties to identify a point of contact for a cross-functional partnership, and we plan to acquire data on IIR penalties that were abated and sustained. However, due to the Broad Penalty Relief of 2022, many IIR penalties for tax years 2020 and 2021 were administratively waived or abated without the need to demonstrate reasonable cause.

2nd Quarter: ​TAS met with IRS’ Office of Servicewide Penalties in February to discuss aspects of the International Information Return (IIR) Penalties program and we will continue to monitor the effect of the US Tax Court decision of Farhy v. Commissioner, which said IRS does not have administrative authority to assess sections 6038 and 6038A penalties. Also, we are acquiring data related to IIR penalties which were abated and sustained to identify any opportunities to advocate on behalf of taxpayers impacted by said penalties.

3rd Quarter: TAS continues to monitor the effect of the US Tax Court decision of Farhy v. Commissioner and our Counsel advised IRS to continue as normal with assessing the Form 5471 penalties. Also, the National Taxpayer Advocate released an analysis summarizing the number and dollar amount of Section 6038 penalties assessed and abated for both systemically-imposed penalties and manually-imposed penalties.  Over the past nine years, the IRS has abated 80 percent of these penalties when they were systemically assessed. Most taxpayers affected by Section 6038 penalties make up 85 – 90 percent of IRS manual assessments with incomes under $400,000.

4th Quarter: During the fourth quarter, the Taxpayer Advocate Service (TAS) continued monitoring the effect of the US Tax Court decision of Farhy v. Commissioner, 160 Tax Court Number. 6. On July 12, 2023, the IRS filed notice of its intention to appeal the Tax Court’s ruling. Counsel has advised IRS to continue as normal with assessing the Form 5471 penalties. Also, the National Taxpayer Advocate released the “NTA Blog: International Information Return Penalties Impact a Broad Range of Taxpayers” dated August 22, 2023, an analysis summarizing the number and dollar amount of Section 6038 penalties assessed and abated – both for systemically-imposed penalties (generally resulting from a voluntarily late-filed return) and manually-imposed penalties (generally resulting from an audit). Over the past 9 years, the IRS has abated 80% of these penalties when they have been systemically assessed. Most taxpayers affected by Section 6038 penalties make up 85% – 90% of IRS manual assessments with incomes under $400,000. 65 percent of Internal Revenue Code section 6038 systemically assessed penalties are small and midsize businesses.

This objective will continue in Fiscal Year 2024.

Status: Closed
Completion Date: 12/31/2022

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) completed this objective during the first quarter of Fiscal Year (FY) 2023. The National Taxpayer Advocate (NTA) plans to issue two Most Serious Problems (MSPs) in her Annual Report to Congress in January 2023 including MSP #1, Processing Delays- Paper Backlogs Caused Refund Delays for Millions of Taxpayers and MSP #6, E-Filing Barriers and the Absence of a Free, Easy-to-Use Tax Software Option Cause Millions of Taxpayers to Continue to File Paper Tax Returns regarding the effectiveness of IRS to reduce its backlog of amended returns. Further, IRS responded to Taxpayer Advocate Directive (TAD), 2021-2, and the NTA is addressing their response in her MSP #1, Processing Delays- Paper Backlogs Caused Refund Delays for Millions of Taxpayers. This objective is closed.

Status: Closed
Completion Date: 09/30/2023

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) advocated for mitigation of the unintended impact of the filing season postponements on taxpayers who took advantage of the postponed filing season and whose advance payments (including withholding and quarterly payments) no longer align with the due date for 2019 and 2020 tax returns. TAS met with IRS to discuss the need for published guidance related to this issue and their Chief Counsel has adopted this recommendation and included this on its priority guidance plan. A draft notice has been circulated for review through the review process. We are waiting for the notice to be finalized in the second quarter.

2nd Quarter: ​TAS advocated for the guidance that was published in Notice 2023-21, which makes more taxpayers eligible for a credit or refund if they timely file Form 1040-X to amend 2019 and 2020 income tax returns. Also, on February 27, 2023, the National Taxpayer Advocate (NTA) published a blog announcing the release of the Notice and addressed the mismatch between the time for filing a claim for credit or refund and the three-year lookback period caused by postponing certain filing deadlines for filing seasons 2020 and 2021. The notice only addressed the issue for postponements of the filing deadlines for TY 2019 and 2020.  TAS is continuing to collaborate with the IRS to provide relief to taxpayers anytime the IRS postpones the filing deadline for those affected by a federally declared disaster.

3rd Quarter: The National Taxpayer Advocate submitted a Priority Guidance Plan recommendation on June 13, 2023, which requests guidance, in the form of a regulation, be issued to address this issue in all situations where the IRS postpones filing deadlines due to a federally declared disaster.

4th Quarter: During the fourth quarter, the Department of Treasury published the 2023-2024 Priority Guidance Plan on September 29, 2023, which addresses the update of the Revenue Procedure 2018-58 listing the tax deadlines that may be postponed by the Commissioner under §7508A in the event of a federally-declared disaster, significant fire, or terrorist attack. Also, TAS Communications published messaging to increase awareness of postponement of due dates, which could impact Statute Expiration Dates.

This activity is closed.

Status: Closed
Completion Date: 09/30/2023

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) identify e-filing barriers and worked with the IRS to improve the accuracy and efficiency of paper return processing during the first quarter of Fiscal Year (FY) 2023. TAS leadership met with the IRS to discuss the need for IRS Modernized e-File (MeF) to support commonly used forms for both individual and business taxpayers, met with representatives of the tax return preparation software industry to identify and evaluate the e-file barriers their customers experience and to determine how the IRS can minimize such barriers, met with the IRS and representatives of the tax return preparation software industry to discuss the overall need to reject an e-filed “imperfect tax return” and evaluate the feasibility of accepting the imperfect tax return upon e-filing and directing it to a treatment stream for further review, and met with representatives of the tax return preparation software industry to determine how to minimize any barriers to incorporate scanning technology into the processing of electronically prepared returns that are printed out and filed on paper. This resulted in the planned issuance of Most Serious Problem (MSP) #6, E-File and Free File, in the National Taxpayer Advocate’s (NTA) Annual Report to Congress (ARC). Additional activities with IRS are expected to resume in the second quarter.

2nd Quarter: The National Taxpayer Advocate (NTA) will attend the Council for Electronic Revenue Communication Advancement (CERCA) conference in the 3rd quarter on May 11, 2023 as a featured speaker at the conference.  The industry will meet with the NTA and other IRS officials in breakout sessions.

3rd Quarter: The National Taxpayer Advocate submitted a Priority Guidance Plan recommendation on June 13, 2023, which requests guidance, in the form of a regulation, be issued to address this issue in all situations where the IRS postpones filing deadlines due to a federally declared disaster.

4th Quarter: During the fourth quarter, the National Taxpayer Advocate (NTA) attended the Council for Electronic Revenue Communication Advancement (CERCA) conference in the 3rd quarter (May 11, 2023), as a featured speaker at the conference.  The industry met with the NTA and other IRS officials in breakout sessions to address e-filing issues.

This activity is closed.

Status: Closed
Expected Completion Date: 04/01/2023

Quarterly Update:
1st Quarter: During the first quarter of Fiscal Year (FY) 2023, the Taxpayer Advocate Service (TAS) worked with the IRS to improve phone service and advocate for multiyear funding from Congress. The National Taxpayer Advocate (NTA) plans to included telephone and in-person service as a Most Serious Problem (MSP) in her 2022 Annual Report to Congress (ARC).  During the second quarter, TAS will continue to advocate for enhanced phone service.

2nd Quarter: ​The National Taxpayer Advocate (NTA) included Telephone and In-Person Service in her 2022 Annual Report to Congress (ARC) as one of the top ten Most Serious Problems (MSPs) facing taxpayers.  The Inflation Reduction Act 0f 2022 increased funding for Operations Support specifically dedicated for taxpayer service and Information Technology initiatives.   The IRS’s Accounts Management (AM) function hired 5,659 additional employees as of December 30, 2022, nearly meeting its FY 2023 hiring goal of 5,775. The approximate 5,000 employees added to the customer service phone lines has helped top 85 percent level of service during the first weeks of filing season.  The Taxpayer Advocate Service will continue to advocate for enhanced in-person and phone services.

3rd Quarter: ​​The National Taxpayer Advocate (NTA) included Telephone and In-Person Service in her 2022 Annual Report to Congress (ARC) as one of the top ten Most Serious Problems (MSPs) facing taxpayers.  The Inflation Reduction Act 0f 2022 increased funding for Operations Support specifically dedicated for taxpayer service and Information Technology initiatives.  The IRS’s Accounts Management (AM) function hired 5,659 additional employees as of December 30, 2022, nearly meeting its FY 2023 hiring goal of 5,775. The additional employees added to the customer service phone lines have helped top 85 percent level of service during the first weeks of filing season.  The Taxpayer Advocate Service will continue to advocate for enhanced in-person and phone services.

This objective is closed.

Status: Closed
Completion Date: 12/31/2022

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) continued to collaborate with the IRS to improve their IRS’s telephone and in-person service. During the first quarter, we completed all activities surrounding the IRS  University model. This objective is closed.

Status: Open
Expected Completion Date: 03/31/2024

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) continued identifying case process efficiencies during the first quarter of Fiscal Year (FY) 2023 by working with the owners of the Integrated Action Tool (IAT) program to continue development of the Collection Statue Expiration Date (CSED) calculator. Current work on the programming change has been placed on hold; however, TAS will continue advocating for this change. Also, we are conducting an analysis of the intake process to identify and address the impact of the pandemic on our work processes, including case receipts from the IRS including exploring new ways to address our Account Management System (AMS) inventory so taxpayer cases are loaded on to the Taxpayer Advocate Management Information System (TAMIS) quickly. We will continue our work on this objective in the second quarter.

2nd Quarter: ​IRS’ Integrated Automated Technologies (IAT) announced the Collection Statute Expiration Date (CSED) tool project is restarting and work will resume in the third quarter. The project is in the design and development stage and TAS committed an analyst to work with the IAT development team. Also, TAS completed an analysis of the case intake process and a recommendation from the analysis was for us to work with a Lean Six Sigma Team to complete an Opportunity Assessment on our case intake process. During this assessment, we will identify how and where employees can provide maximum value to taxpayers and to ensure our customers are receiving consistent efficient high-quality service.

3rd Quarter: TAS continues to work on the Integrated Automated Technologies (IAT) Collection Statue Expiration Date tool. This project may be broken out into phased releases to allow for improved and expanded functionality. Also, TAS continues to identify and address the impact of the pandemic on our work processes by considering input from TAS employees and deciding which temporary procedures to make permanent or have available for future emergencies. We are drafting new guidance for the impacted Internal Revenue Manuals with the goal of publishing by the end of September. Further, TAS continues to discuss the Service Level Agreements with W&I and SB/SE regarding potential changes to our delegations of authority.

Lastly, due to a TAS reorganization, the operationalizing of risk management is on hold while new leaders reconsider the best methodology to formalize risk assessment internally and externally, while maintaining our statutory requirement to remain independent from IRS, satisfy GAO, A-123 and IRM requirements, and avoid undue burden on employees and managers.

4th Quarter: During the fourth quarter, the Taxpayer Advocate Service (TAS) continued to track the progress the Integrated Action Tool (IAT) office made in developing develop the Collection Statue Expiration Date (CSED) tool and we will continue to monitor progress through regular interactions with the IAT office. Also, TAS completed the pandemic procedures changes and communicated them to our employees on 7/31/23.

TAS has been communicating with IRS’ Wage and Investment (W&I) and Small Business/Self Employed (SBSE) operating divisions on potential changes to our delegations of authority, and we continue to work on a proposal for TAS leadership to implement based on these discussions. Further, TAS has received the recommendations from the Lean Six Sigma team and TAS leadership and is currently developing a change management strategy for communicating the changes to TAS managers and employees and implementing the results.

Lastly, TAS analysts briefed new leadership regarding our risk management procedures and recommendations. When the recommendations are incorporated, the briefing will be shared with all TAS Senior Leaders during the first quarter of Fiscal Year 2024.

This objective will continue in Fiscal Year 2024.

Status: Closed
Completion Date: 09/30/2023

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) formed a team of Subject Matter Experts (SMEs) to evaluate our case receipts involving the Individual Taxpayer Identification Number (ITIN) application and renewal processes.  We identified barriers in the process and created outreach materials to educate the undocumented immigrant community regarding the ITIN application process and how to overcome barriers.  The final outreach materials will be available in the second quarter.

2nd Quarter: A draft of the outreach materials is under peer review.

3rd Quarter: A draft of the outreach materials is under peer review. We continue to determine the scope of impact on taxpayers seeking ITINs.

4th Quarter: During the fourth quarter, the Taxpayer Advocate Service completed drafting of outreach materials regarding Individual Tax Identification Number (ITIN) application/renewal. Published onto Advocacy Tool Kit for use for all outreach to undocumented immigrant community.

This objective is closed.

Status: Closed
Expected Completion Date: 03/31/2023

Quarterly Update:
1st Quarter: The Taxpayer Advocate Service (TAS) leadership met in December to consolidate recommendations into a deck for presentation to our senior leadership.

2nd Quarter: TAS completed its analysis of the intake process and delivered its initial recommendations to the TAS senior leadership.

This objective is complete.