The Taxpayer Advocate Service (TAS) needs to improve its processing of taxpayer requests for relief from Internal Revenue Service (IRS) enforcement actions or for expedited assistance, according to a new report.
The report from the Treasury Inspector General for Tax Administration (TIGTA) found that taxpayers with economic burden cases did not always receive timely, accurate, or complete service from the TAS, the independent organization whose mission is to help taxpayers resolve problems with the IRS.
TIGTA found that over 50 percent of the 250 cases sampled had errors and delays that might have burdened taxpayers. In some instances, taxpayers might have had their rights or privacy violated because the TAS bypassed authorized representatives, made unauthorized disclosures to third parties, did not pay the proper interest on refunds, or denied claims erroneously.
The significance of these errors is heightened by the nature of the taxpayer's situation. Economic burden cases are broadly defined as those in which an IRS action or inaction has caused or will cause financial difficulties or a hardship for the taxpayer. In most cases, the taxpayer is asking the TAS to stop an IRS enforcement action (such as garnishing wages) or to expedite a process (such as the issuing of a refund from a tax return being audited).
"I am pleased that the National Taxpayer Advocate agrees with many of TIGTA's recommendations related to the operation of her office and has agreed to implement them," TIGTA Inspector General J. Russell George said. "TIGTA stands ready and willing to help her achieve her goal of ensuring that taxpayers' cases are accurately and completely resolved."
Key findings of the report include:
- Taxpayers experiencing economic burden who contacted the TAS for assistance did not always receive timely, accurate, or complete service to resolve their problems.
- In some cases, taxpayers were not informed by the TAS of delinquent tax returns, outstanding balances due, or refund dates and amounts.
- Cases were not always processed in a timely fashion, which sometimes resulted in delays in resolving taxpayers' problems or in issuing refunds.
TIGTA made six recommendations to the TAS, including: (1) developing and implementing formal procedures to identify and correct errors on account adjustments and manual refunds; (2) improving case documentation to make it easier for the TAS to take prompt and appropriate action; and (3) assessing and improving internal processes, and providing additional staff training.
The National Taxpayer Advocate agreed with five of the six recommendations, and disagreed with our recommendation to require that case advocates document the pertinent details of the taxpayer's economic burden in the case. Management's complete response to the draft report is included as Appendix V.
Information on the scope and methodology of the audit can be found in Appendix I.
The Treasury Inspector General for Tax Administration (TIGTA) oversees IRS, the IRS Oversight Board, and the IRS Office of Chief Counsel. TIGTA's Inspector General reports to the Secretary of the Treasury and Congress. TIGTA's mission is to protect the integrity of Federal tax administration, keeping it free from corruption and threats that could come from internal or external sources and from illegal and unethical activity. TIGTA also promotes the efficiency, effectiveness, and economy of tax administration.