Don't Mess With Taxes

TAP members grace the cover of the federal advisory panel's 2021 Annual Report. As the annual tax filing (and payment) deadline nears, complaints about the process increase. It's a natural reaction to the frustration of dealing with our complex tax code, especially these last three years that have been complicated by COVID-created deadline changes, delays, and new laws. Some folks, however, want to do more than grumble. They want to be a part of making the tax system better. They are the volunteer members of the Taxpayer Advocacy Panel, or TAP. And that group now has some new members. 2022... Read more →

Taxpayer Advocacy Panel members provide information on how to improve the IRS at the agency's annual Tax Forums. (Photo courtesy TAP News) That old saying about everybody talks about the weather, but nobody does anything about it applies to most things. If you substitute "complains" for "talks," then it definitely applies to taxes. But with taxes, unlike the weather, there is a possibility for change. Really. The Internal Revenue Service is looking for volunteers to serve on the Taxpayer Advocacy Panel (TAP). The TAP is a federal advisory committee whose members look for ways the IRS can improve services and... Read more →

The 2022 tax filing season officially begins on Monday, Jan. 24. Some people, however, are not convinced the Internal Revenue Service is ready. The concern isn't just about the millions of 2021 returns that will be flooding the IRS' system, but also the millions of returns the agency is still processing from the previous COVID-affected filing seasons. That backlog and continuing challenges prompted a coalition of tax practitioners and advocacy groups to write the IRS and Treasury Department, urging those leaders to "take steps to ameliorate the situation." Specifically, the representatives from 11 tax and public advocacy organizations want the... Read more →

There aren't any surprises in National Taxpayer Advocate Erin M. Collins' annual report to Congress on the 2021 filing season. Something else that's not surprising is that Collins warns that things aren't likely to get any better for taxpayers, tax pros, or the Internal Revenue Service this year. Unprecedented tax annus horribilis: "Calendar year 2021 was surely the most challenging year taxpayers and tax professionals have ever experienced," wrote Collins in the prologue of the required report issued today, Jan. 12. The problems included long processing and refund delays, difficulty reaching the IRS by phone, correspondence that went unprocessed for... Read more →

Every tax season is challenging. Often, it's because Congress has fiddled with tax laws, presenting new learning curves for both taxpayers and the preparers they hire to lead them through the Internal Revenue Code. Problems during the last two years, however, can be blamed on COVID-19. Not only did the pandemic produce new laws, there have been delayed deadlines and health-related closures that created processing problems for the Internal Revenue Service. The latest 2021 filing season hurdle, for both taxpayers and the IRS, is the amount of tax returns the agency says must be processed by hand. The IRS is... Read more →

Some people got less COVID-19 relief money because the IRS took some to pay other debts. Every year, some taxpayers find the tax refunds the Internal Revenue Service sends them are less than they expected. The usual reason for the shortfall is that the federal refund amounts were offset by other debts, such as unpaid taxes, student loans or delinquent child support. That situation cropped up last year when the Recovery Rebate Credit was created as part of COVID-19 relief legislation. The rebates were paid in advance to millions of taxpayers. And in some, but not all, instances, economic impact... Read more →

The Internal Revenue Service has delivered two rounds of COVID-19 economic impact payments (EIPs). The first was the $1,200 per person approved in late March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The second EIP for $600 per person was authorized at the end of last December as part of the Consolidated Appropriations Act (CAA), with payments distributed through the first two weeks of January 2021. By now, folks know that if they didn't get the full amounts, which included additional payments for eligible dependents, they need to claim the Recovery Rebate Credit (RRC). You'll do... Read more →

Image via GIPHY If you were part of the millions of taxpayers who didn't get their refunds — and I am seeing on social media that even into 2021, some people are still waiting … — the National Taxpayer Advocate (NTA) feels your pain. NTA Erin M. Collins included that complaint in her list of the 10 most serious problems facing taxpayers. The list is part of the Internal Revenue Service watchdog office's Annual Report to Congress, which was released on Wednesday, Jan. 13. Tax fraud fighting delays: There's a common thread among the 1040s where refunds are delayed. These... Read more →

Congress is debating, sort of, the possibility of, among other pandemic-related issues, another round of COVID-19 economic relief payments (EIPs). That's good news for folks struggling to make ends meet in the wake of coronavirus-related economic troubles. But some folks haven't yet received the first stimulus checks created back in March under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Created to help, but…: Now there's some good news for some encountering relief payment problems. The Taxpayer Advocate Service (TAS) now can help taxpayers in certain situations resolve their COVID-19 payment issues. "Previously, the IRS did not have a... Read more →

The Hon. John Lewis receiving the Presidential Medal of Freedom from President Barack Obama in 2010. (Obama White House photo) The celebration of the life of the Hon. John Lewis continues. Today, the late civil rights leader and long-time member of Congress lies in state in his native Alabama. Other key moments from his early days in the South also will be commemorated as part of the six-day journey of memorialization and tributes that continues in Washington, D.C., before he goes to his final rest in Atlanta. America, the world actually, lost a true hero when Lewis passed away on... Read more →

Erin M. Collins took over as National Taxpayer Advocate on March 30, just as the United States was coming to grips with the coronavirus, so it's no surprise that the pandemic and its effects on taxes are part of her first official report to Congress. "Starting in the midst of a pandemic and witnessing IRS offices closing one by one was not the way I envisioned my role when I accepted the position," wrote Collins in the report's preface. But, added Collins, there's been a silver lining. In conference calls with her leadership team, Taxpayer Advocate Service (TAS) employees and... Read more →

Millions of folks — around 152 million of us, by the Internal Revenue Service's latest count — have received COVID-19 economic impact payments, or EIPs as they are called in the acronym crazy federal government (and tax) world. The payments of up to $1,200 per individual and $500 for each eligible child were created by the Coronavirus Aid, Relief and Economic Security (CARES) Act. The IRS began sending out EIPs in April. But now, two months after the CARES Act became law on March 27, some EIP-eligible recipients are still waiting for direct deposit or a paper check or a... Read more →

Law schools and their students, like these at Georgia State University College of Law, are major contributors to the success of Low-Income Taxpayer Clinics nationwide. (Photo courtesy Philip C. Cook LITC) Sometimes, taxpayers encounter issues more serious that just filing their returns. They discover that the Internal Revenue Service has some questions about a prior return or an appeal of an agency decision isn't going as expected or that the federal tax collector is taking his name to heart and initiating collection procedures. What to do? Specifically, what to do if you don't have much money? Find your nearest Low-Income... Read more →

Erin Collins, representing KPMG, speaking at the 2014 Step Up Inspiration Awards (Photo courtesy Step Up) Erin M. Collins was named today as the Internal Revenue Service's National Taxpayer Advocate. The former managing director of KPMG's Tax Controversy Services practice for the Western Area in Los Angeles assumes the post vacated last July by Nina E. Olson. Bridget Roberts of the Taxpayer Advocate Service had been serving as interim Taxpayer Advocate. "I am deeply honored to join the talented team at the IRS as the National Taxpayer Advocate," said Collins. "I will work every day to be a strong and... Read more →

Taxpayer Advocacy Panel members provide information on how to improve the IRS at the agency's annual Tax Forums. (Photo courtesy TAP News) How many times, perhaps times per day, have you said, "If I were in charge, I'd do things differently." Now's your chance to follow up on that, at least when it comes to how U.S. taxpayers interact with our tax system and the agency that administers it. Become a member of the Taxpayer Advocacy Panel, or TAP as it's called, and improve the Internal Revenue Service. My personal TAP dance: I can hear the skepticism coming through the... Read more →

The second filing season under the Tax Cuts and Jobs Act (TCJA) is about to start. This one will be easier, right? Right? Maybe. At least this year, we and the Internal Revenue Service aren't dealing with the longest federal government shutdown in history. Plus, folks got a good look with their filings last year at how the massive Republican tax reform law affects them, although some areas are still a bit fuzzy. And of course, everyone adjusted their payroll withholding so there won't be a replay of 2019's reduced/no-tax-refund drama. Yeah, I'm rolling my eyes at that statement, too.... Read more →

I've dealt with bill collectors over the years. Fortunately for me, it's been on behalf of a couple of relatives who found themselves in over their heads financially. Fortunately for my family members, after much — way too much — and often contentious back and forth, we were able to come to a satisfactory resolution. That's why I tend to share former Taxpayer Advocate Nina Olson's skepticism about the way that private collection agencies, or PCAs in tax-acronymese, interact with folks who owe taxes. But despite my, Olson's and many others' lingering distrust of these operations, private debt collect is... Read more →

National Taxpayer Advocated Nina E. Olson today departs the Internal Revenue Service watchdog office she's held since 2001. An acting advocate, Bridget Roberts, has been named until the position is filled full-time. National Taxpayer Advocate Nina E. Olson makes a point, here expressing her concerns about private tax debt collection (you can watch her full testimony at the official video), during one of her many Capitol Hill appearances during her almost two decades as an IRS watchdog. Goodbye and thanks to Nina E. Olson. Today, July 31, is her last as National Taxpayer Advocate (NTA). She is retiring from government... Read more →

In one tax world case, it does appear that the third time really is a charm. A recent Internal Revenue Service report says that its latest use of private bill collectors to bring in old unpaid taxes is working. In fact, this latest iteration has produced enough additional money to allow the IRS to hire new in-house employees. Third time's a collection charm: The use of private collection agencies, or PCAs as they are known in tax acronymese, was restarted in 2017 after being mandated as part of a 2015 transportation law. It's the third attempt after two previous PCA... Read more →

The Earned Income Tax Credit (EITC) was created more than 40 years ago as a way to give lower-earning workers a tax break. But from the get-go, the EITC has been problematic. Now, just weeks before the National Taxpayer Advocate retires, her office has offered Congress some suggestions on how to improve the tax credit, as well as how it can be more effectively administered. Some tax credit history: The way we got to today's EITC is almost as complicated and intricate as the tax break itself. When created in 1975, the EITC was supposed to be a temporary tax... Read more →