The National Taxpayer Advocate this year selected 21 major problems that taxpayers encounter in their dealings with the Internal Revenue Service. I found five of those issues particularly troublesome. Every year, the National Taxpayer Advocate issue a report to Congress. The 2018 version released this week included a look at, not surprising, how the recent government shutdown affected not only Internal Revenue Service operations, but also the taxpayers who, particularly at this time of year, are relying on IRS services. Part of that annual report also includes at least 20 tax matters that the Taxpayer Advocate identifies as the most... Read more →
Taxpayer Advocacy
Open-close sign via Giphy.com The drama continues in Washington, D.C., as far as keeping the federal government open. It looked like, despite some grumbling from all sides, that a bipartisan, bicameral deal reached this week would keep all of the federal government open past Feb. 15. We all need to keep our fingers (and toes) crossed that it happens, especially those of us — which mean most Americans — who deal with the Internal Revenue Service. The IRS obviously among those pushing for a resolution that will get the agency through the 2019 tax filing season. The agency is still... Read more →
The red light has changed to green for the IRS now that the longest federal government shutdown in U.S. history is over. (Photo by Kari Bluff via Flickr) The Internal Revenue Service should be fully staffed as we official start the 2019 tax filing season on Monday, Jan. 28. Holdover shutdown issues, however, still could cause delays, which many taxpayers and tax professionals already have experienced. Donald J. Trump signed into law late Friday, Jan. 25, a bill to end the longest federal government shutdown in U.S. history. That same day, the White House Office of Management and Budget notified... Read more →
Internal Revenue Service offices nationwide, like this one in New York City, are closed due to the ongoing federal government shutdown. (Photo by Matthew Bisanz via Wikipedia Commons) Most of us don't have personal interactions with the Internal Revenue Service. We simply do our taxes every year, send them to the federal tax collector and move on with our lives. It's a different story in many places across the country. Those places have physical IRS offices where friends and family usually go each weekday to do their jobs. They want the government shutdown shut down so they can get back... Read more →
The tax collection efforts of four private debt collectors are paying off, bringing in $56.6 million in previously uncollected tax revenue in the first 14 months they've been on the job. However, it cost the tax bill collectors $55.3 million to do that job, netting Uncle Sam only $1.3 million. That's the word from an Internal Revenue Service report on the most-recent iteration of the private tax debt collection program. "Contrary to critics' claims and despite its slow-roll out, the IRS private debt collection program is already demonstrating that it can more than pay for itself with revenues returned to... Read more →
Owing the Internal Revenue Service is bad. Having the IRS come after you for that money is worse. Dealing with private debt collectors who've been given your overdue tax account is worst. That's the perspective of many when it comes to the federal tax collection process. But not all. And now an online war of words has erupted between the National Taxpayer Advocate and a new group created to advocate for private collection of tax debt. Pro private tax debt collection: The Partnership for Tax Compliance (PTC) debuted on June 26. The goals of the 501(c)6 nonprofit (that's the tax... Read more →
Rep. Lynn Jenkins (R-Kansas) and fellow Ways and Means member Rep. John Lewis (D-Georgia) have offered a bill to revamp the IRS. Remember the kinder, gentler Internal Revenue Service? That was the goal of the IRS Restructuring and Reform Act of 1998, which sought to ease up on the tax agency's aggressive collection actions back then. Now two Ways and Means Committee members are looking to remake the IRS into a modern, more efficient agency that provides taxpayers a better experience. I'm pretty sure that modernizing and refining processes for better efficiency can eventually be accomplished. As for the improved... Read more →
Have a problem with the Internal Revenue Service that you just can't solve? The Taxpayer Advocate Service (TAS) might be able to help. And for some folks, that help will be in person. Generally, TAS can assist taxpayers — at no cost — if: Your problem is causing financial difficulties for you, your family or your business. You or your business are facing an immediate threat of adverse action. You've tried repeatedly to contact the IRS but no one has responded or the IRS hasn't responded by the date promised. You believe an IRS system or procedure isn't working as... Read more →
National Taxpayer Advocate Nina E. Olson makes a point about private tax debt collection during a May 23 House Appropriations subcommittee hearing. (Click image to watch the official video.) National Taxpayer Advocate Nina E. Olson has long been an opponent of turning over taxpayer accounts to collection agencies. That's still the case, according to her mid-year report presented today to Congress. The latest private tax debt collection effort tops the list of 13 priorities that the Taxpayer Advocate's Service will focus on during the coming 2018 fiscal year that begins Oct. 1. Specifically, Olson says she and her staff are... Read more →
Many professional tax preparers say that giving the Internal Revenue Service added regulatory ability over their jobs isn't warranted. The tax agency and Trump Administration disagree. (Photo by Sebastiaan ter Burg via Flickr CC) The Trump Administration has continued the current trend of cutting the Internal Revenue Service's annual operating funds, but a provision in the new White House's fiscal year 2018 budget also could solve a new IRS problem. On June 1, the Internal Revenue Service got the bad news from the United States District Court for the District of Columbia that the tax agency can't collect fees from... Read more →
The National Taxpayer Advocate is not giving up on her quest to ensure that digital enhancements to Internal Revenue Service efforts are just that and not replacements for current, lower-tech taxpayer service offerings. National Taxpayer Advocate Nina E. Olson discussed IRS customer service in March in advance of the April filing deadline. Click image to watch the full video at C-SPAN. Nina E. Olson has previously raised questions about increased computerization of IRS customer service options. She's concerned that those not comfortable with conducting business on a computer or other digital device will be inconvenienced or worse. Those with limited... Read more →
Early in my career of writing about taxes my shelves and desk and file cabinets and office floor were covered in tax-related magazines, books, brochures and Internal Revenue Service issued tax booklets and forms. Now it's my email box that's overflowing. The world, including the tax world, has gone more digital. Although, as that photo at left shows, I still have plenty of actual tax and finance books (including -- shameless plug alert -- my "Truth About Paying Fewer Taxes" and the "Future Millionaires' Guidebook" that some of my Bankrate colleagues and I wrote) in my office. One group, however,... Read more →
Tax crooks just never stop. Now they're invoking the Taxpayer Advocacy Panel (TAP) in a phishing scam. Real Taxpayer Advocacy Panel members at work. From left, TAP member Eileen Kelly, TAP Analyst Patti Robb, Local Taxpayer Advocate Barbara Johnson, and TAP members Jack Dell and Jackie Granger meet in Milwaukee, Wisconsin, to discuss ways to improve the IRS. (Photo courtesy TAP 2012 Annual Report; click image for links to recent TAP reports) TAP, on which I had the honor to serve, is a group of around 75+/- volunteers who work to help improve IRS customer service and responsiveness to taxpayer... Read more →
We give the Internal Revenue Service an incredible amount of personal data. Our Social Security numbers. Our earnings amounts. Our family information. That's why folks are, rightfully, freaking out about the amount of tax identity theft out there. But in addition to crooks getting their hands on our assorted personal, tax and financial data, there's also a legitimate concern about how the IRS handles all our private information during its routine operation. Taking care of TBOR: The agency is trying assuage some of those worries by emphasizing the Taxpayer Bill of Rights (TBOR) and how it protects taxpayer privacy. In... Read more →
What's the biggest hassle, aside from complex tax laws, that you face in trying to do your taxes? The National Taxpayer Advocate believes it's the Internal Revenue Service's increasing efforts to make most taxpayer interaction interactive. National Taxpayer Advocate Nina Olson is required by law to include in her Annual Report to Congress a summary of at least 20 of the most serious problems that taxpayers face. Given how taxpayer troubles have increased over the years, be they from inappropriate or inept IRS actions or because the agency is understaffed and underfunded, it's no surprise that in her 2015 report,... Read more →
I'm a big believer in lists. I can't grocery shop without my piece of paper detailing all the edibles the hubby and I need or want. Yes, I still buy things that don't make the list, but if I forget it, I always have to make another trip to pick up a critical comestible I forgot. Yes, that's my current grocery list on an Earned Income Tax Credit notepad I picked up at an IRS Nationwide Tax Forum. No judging, please, of our food choices. I also keep track of my story assignments via a computer spreadsheet, as well as... Read more →
Every day seems to bring a new report of another security breach that exposes millions to potential identity theft. Even Uncle Sam is not immune, as evidenced by hackers getting hold of Office of Personnel Management records and taxpayer data from the Internal Revenue Service's online "Get Transcript" option. Now we have yet another report from folks on the tax front line as to just how widespread tax identity theft is. Sixty-three percent of CPAs who responded to the survey in May said that at least one of their clients was a victim of tax identity theft during the just... Read more →
"The 2015 filing season was akin to A Tale of Two Cities. For the majority of taxpayers who filed their returns and did not require IRS assistance, the filing season was generally successful. For the segment of taxpayers who required help from the IRS, the filing season was by far the worst in memory." That comment was National Taxpayer Advocate Nina E. Olson getting all literary in her 2015 mid-year report to Congress. If you prefer a celluloid take on Charles Dickens' classic novel about politics, class conflicts, sacrifice and, yes, love amid the French Revolution, click the screen shot... Read more →
Everybody in the official tax world apparently wants to know what we regular taxpayers think about our tax system and how to improve it. First it was the Senate Finance Committee seeking public input on tax reform possibilities. Now it's the Taxpayer Advocacy Panel (TAP) and even Treasury and the Internal Revenue Service itself. Talking toll-free tax help: First up is the TAP's effort to make getting tax help via telephone more effective. The Toll-Free Phone Line Project Committee is meeting at 2:30 p.m. Eastern time today, March 18, via teleconference. This panel is dedicated to improving the customer service... Read more →
Ready to file your 2014 tax return? Have adjusted gross income of $60,000 or less? Then check out Free File tomorrow. That's right. The Internal Revenue Service's free online tax preparation and e-filing option opens for business Friday, Jan. 16. That's four days before the IRS starts accepting and processing all other 2014 returns, be they e-filed with commercial tax software or submitted on paper. The free online filing partnership between the IRS and the Free File Alliance is back for its 13th tax-filing service. It was started in 2003 as a way to get more people to e-file. It... Read more →