National Taxpayer Advocate releases Fiscal Year 2020 Objectives Report
The National Taxpayer Advocate released her Fiscal Year 2020 Objectives Report to Congress today. In the report, she addresses key IRS challenges, reviews the 2019 filing season, and identifies TAS’s priority issues for fiscal year (FY) 2020.
Key IRS Challenges
- Taxpayer Service: The report says poor taxpayer service remains the biggest challenge taxpayers face in dealing with the IRS and that the IRS is not taking adequate steps to address its service shortcomings.
- Appropriate Use of Self-Service Applications: Recent data shows customers who use the internet are comfortable with self-assistance in some categories of interactions but prefer personal contact (by phone or in person) for others. The report urges the IRS to use this data to determine where in the process personal contact is most needed and to continue to provide personal service in these circumstances.
- Treatment of Financially Vulnerable Taxpayers: The report makes two recommendations. First, it recommends that the IRS create an algorithm based on its internal data (tax returns, Forms W-2, and Forms 1099) to identify taxpayers at risk of economic hardship; then, if a taxpayer so identified calls the IRS or seeks to enter into an online installment agreement, the IRS could use that data to trigger a “pop-up” screen noting the possibility of economic hardship and providing information about collection alternatives. Second, the report recommends the IRS send a letter describing collection alternatives to taxpayers who its data show are at risk of economic hardship before it levies against their property.
Filing Season Review
The report says the IRS utilizes narrow performance measures that suggest the agency is performing well but do not reflect the taxpayer experience. Notwithstanding the IRS benchmark measure showing a level of service (LOS) of 67 percent on its Account Management lines, IRS telephone assistors answered only 23 percent of calls received. For taxpayers calling the compliance telephone lines (which are separate from the Accounts Management lines), performance was worse. The LOS on the various Automated Collection System lines was 33 percent, and the average hold time was 41 minutes.
Priority Issues for FY 2019
The report identifies and discusses 12 priority issues TAS plans to focus on during the upcoming fiscal year. Among the key issues are the following:
- Creation and Availability of a Roadmap of Tax Controversies: The National Taxpayer Advocate’s 2018 Annual Report to Congress included a series of “roadmaps” depicting a taxpayer’s “journey” through the tax system to help taxpayers gain a better understanding of the tax administration process, particularly when they are experiencing problems. Since publication of the 2018 report, TAS has continued to develop ways to represent the taxpayer’s journey visually by placing the stages in the format of a metro or subway map. The map is expected to be released next month.
- Limitations on Ability of Amish Taxpayers to Receive Full Child Tax Credit Benefits: As part of the Tax Cuts and Jobs Act, Congress imposed a requirement that taxpayers include a Social Security number (SSN) for every qualifying child for whom they claim the Child Tax Credit (CTC). This requirement has created a conflict with the religious beliefs of the Amish and certain other religious groups because the IRS has decided not to allow them to receive full CTC Benefits. During FY 2020, TAS will continue to urge the IRS to allow Amish taxpayers without SSNs to receive full CTC benefits when otherwise eligible.
Additional Report Volumes
The National Taxpayer Advocate will release two additional volumes of this report next month. Volume 2 will contain the IRS’s and TAS’s general responses to each of the administrative recommendations the National Taxpayer Advocate identified in her 2018 year-end report. Volume 3 will contain a comprehensive assessment of the Earned Income Tax Credit (EITC) and will make recommendations designed to increase the participation rate of eligible taxpayers and reduce overclaims by ineligible taxpayers.
Check out the full report.