Don't Mess With Taxes

No, I'm not already celebrating 5 o'clock somewhere. And no, they don't like us just for our tax payments.

The IRS has an official position dedicated to looking out for taxpayers and helping us solve problems we encounter with the agency. It's the Taxpayer Advocate Office.

The job is essentially what the name says: The Taxpayer Advocate is the person who takes the taxpayers' side in revenue collection matters. The efforts range from one-on-one help in resolving tax issues with the IRS to keeping an eye on tax laws and their implementation that are especially troublesome to the wider taxpaying public.

The position is not new. It began in 1979 as the Office of Taxpayer Ombudsman. Since it was initiated back then by the IRS, we do have to give the tax office props (is that still what the kids say?). Congress got involved (doesn't it always?) and incorporated the office into law in the 1988 Taxpayers Bill of Rights; eight years later, the second Taxpayer Bill of Rights tweaked the post and gave it its current name. If you're a tax history buff, you can read all about its evolution here.

Regardless of what you call it, the main thing is that the office is there for us. And the coolest thing is that it's proactive, not just reactive.

Over the years, Taxpayer Advocates have been making sure their voices are heard when it comes to tax policy and procedures that are a pain. And the current Taxpayer Advocate, Nina E. Olson, is one of the most vigorous in this regard.

Nina -- true, we're not BFFs, but I'm quite comfortable using her first name; she's a very approachable person and, as a member of the Taxpayer Advocacy Panel, I have met and talked (albeit briefly) with her -- has been out front on many matters that are important to filers.

They include the IRS holding up refunds for months while it checked earned income tax credit eligibility (she was not happy) to the agency's use of private tax collectors (again, she doesn't approve) to electronic filing (she's for a direct IRS portal open to us all, an opinion shared by several on Capitol Hill).

The latest Advocate account: Nina's pro-taxpayer attitude is quite evident in her latest report to Congress. The Taxpayer Advocate is required by law to present lawmakers with two a year; one as a preview of the coming fiscal year and the other early in the calendar year to point out specific taxpayer problems. You can read her full, just-released fiscal 2008 coming attractions at your leisure.

In the meantime, here are some highlights:

• Nina elaborates on her the perennial complaint that the IRS needs to improve taxpayer services. The Taxpayer Assistance Blueprint (TAB), issued in April 2007, is a good start, but only a "first step" since the IRS still faces challenges in implementing the plan. And she again urges IRS commitment to providing face-to-face service for taxpayers who aren't comfortable with or able to get tax info other ways, such as the Internet.
• She wants assurances that taxpayer rights are protected under the private debt collection system.
• She says the IRS' offer-in-compromise program, utilized by taxpayers unable to pay their full tax bills, should be more accessible.

Nina also has some observations about the challenges the IRS faces as it deals with Congressional pressure to close the tax gap, the difference between the amount of tax owed and the amount of tax collected.

She previously expressed concerns that the IRS might go overboard with enforcement to show tax gap results, meaning taxpayers would be the ones who suffer if the agency tries to do too much too quickly in this regard.

This time she's also shaking a finger at lawmakers. Congress, recommends Nina, should require the IRS to adopt a long-term research strategy that doesn't just focus on closing the tax gap. Rather, it should examine ways to change taxpayer behavior and better encourage voluntarily tax compliance.

Talking to TAS and TAP: If you just can't get a tax situation resolved through normal channels or believe that an IRS system or procedure is not working properly, contact your local Taxpayer Advocate Service (TAS) office. This interactive map will help you locate it.

If, however, you've run across an indecipherable form (OK, let's narrow this down a bit: a really, really incomprehensible and/or stupid one) or have had trouble figuring out just which regulations and guidelines apply to your particular filing situation, you might want to let me and my fellow Taxpayer Advocacy Panel (TAP) members know.

Some of us are tax pros, but that's not a requirement for membership. We all got on the Panel because we're taxpayers, too. And believe me, the Treasury Department double checks that you are an up-to-date payer before they approve you.

We want the tax-filing process to be better just as much as you do. That's why we listen when y'all report the same or similar problems we've encountered. When we see a pattern, that's our cue to come up with ways for the IRS to ease the difficulties.

For example, TAP played a key role in getting the IRS to expand its publications that address casualty, theft and disaster losses. At TAP's suggestion, the agency also agreed to create publications dealing with specific natural disasters.

So you can drop me an e-mail if you have a systemic tax issue you think needs to be corrected. I'm talking legitimate stuff here, not wise-ass "no more taxes" or off-the-wall tax protest stuff.

And when you're done with Nina's latest report, you can read more about TAP at Improve IRS.