The IRS touches more Americans and businesses than any other government agency, so it is critical to make the tax administration process run smoothly.”
Erin M. Collins, National Taxpayer Advocate
Last week, I submitted to Congress the National Taxpayer Advocate’s 2022 Annual Report and the sixth edition of the National Taxpayer Advocate’s Purple Book, which presents legislative recommendations designed to strengthen taxpayer rights and improve tax administration for all taxpayers.
In my role as the National Taxpayer Advocate, I serve as the voice of the taxpayer at the IRS, and this report is really a product of listening to individual taxpayers, business taxpayers, and tax practitioners and hearing their concerns. The bad news last year was that millions of taxpayers and tax professionals experienced continued misery because of IRS paper processing delays and poor service. The good news is that the IRS has made considerable progress, and as I state in the report, we can start to see the light at the end of the tunnel. I am just not sure how far we need to travel before we see sunlight – and timely refunds for our taxpayers.
The 2022 Annual Report to Congress contains information about the key challenges taxpayers are experiencing in their dealings with the IRS and makes recommendations to resolve them. As required by statute, I identify and discuss the ten most serious problems encountered by taxpayers:
- Processing Delays
- Complexity of the Tax Code
- IRS Hiring and Training
- Telephone and In-Person Service
- Online Access for Taxpayers and Tax Professionals
- E-File and Free File
- IRS Transparency
- Inadequate Return Preparer Oversight
- Appeals Procedures
- Challenges Faced by Overseas Taxpayers
The report also includes a taxpayer rights and service assessment that presents performance metrics for each of the past four fiscal years, an overview of our TAS advocacy activities and highlights of our successes, a description of the ten federal tax issues most frequently litigated during the last year, and two research studies. One study examines alternative ways to restructure the Earned Income Tax Credit (EITC) to increase participation among eligible taxpayers while reducing improper payments. The other study reports on the functionality of online services offered by over 40 state tax agencies and three foreign tax agencies, which can serve as a point of reference to help the IRS improve its own online services.
In addition to making administrative recommendations in my report, I also propose 65 legislative recommendations for consideration by Congress in the Purple Book. Here are just a few:
- Amend the “Lookback Period” to allow tax refunds for certain taxpayers who took advantage of the postponed filing deadlines due to COVID-19 and other disasters;
- Authorize the IRS to establish minimum standards for paid tax return preparers;
- Expand the U.S. Tax Court’s jurisdiction to adjudicate refund cases and assessable penalties;
- Modify the requirement that written receipts acknowledging charitable contributions must pre-date the filing of a tax return;
- Restructure the Earned Income Tax Credit (EITC) to make it simpler for taxpayers and reduce improper payments; and
- Expand the protection of taxpayer rights by strengthening the Low Income Taxpayer Clinic (LITC) program.
The IRS touches more Americans and businesses than any other government agency, so it is critical to make the tax administration process run smoothly. I look forward to meeting more taxpayers and tax professionals this year, listening closely to the issues that are causing heartburn for taxpayers, and then using my seat at the table to encourage the IRS and Congress to make meaningful, smart changes that will improve taxpayer service, protect taxpayer rights, and strengthen tax administration.
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The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.