The National Taxpayer Advocate Service (TAS) has filed its annual report with Congress setting out the most serious problems encountered by taxpayers in dealing with the Internal Revenue Service, the most litigated tax issues, and the TAS's recommendations for legislation.
According to the report, the function of the TAS is to provide taxpayers with timely service, correct responses, and efficient advocacy.
The TAS recommends expanded confidentiality provisions, authority for the National Taxpayer Advocate to intervene in federal tax litigation, and the creation of an independent counsel to the National Taxpayer Advocate.
Problems the IRS needs to address that are cited in the report include:
- Getting help from the IRS
- Processing Offer-In-Compromise cases
- Deficiency of IRS notices in describing math errors and other confusing IRS notices
- Processing claims for refunds
- Several problems with the Earned Income Tax Credit
- Language and cultural barriers in communicating with taxpayers
- Options for free income tax preparation
- Awareness and understanding of the federal deposit system
- Access to IRS automated collection system representatives
- Delays in collection due process, including scheduling of hearings
- Problems with access and accuracy of toll-free telephone service
- Problems with inquiries concerning tax refunds
- Problems with obtaining employer identification numbers
- Delays with requests for documents
- Misapplied and lost payments
- Relief from joint and several liability
Among the most litigated tax issues described in the report are pro se litigation (taxpayers representing themselves before the court), nonfiler/unreported and underreported income, collection due process, trade or business expenses, valuation, the earned income tax credit, abusive trusts, itemized deductions, capital gain and loss, civil fraud penalties, joint and several liability, and barred refunds.
You can read the 416 page report.