The Internal Revenue Service’s Taxpayer Advocate Service could improve its processing of so-called “systemic burden” cases that involve instances in which an IRS process, system or procedure has not operated as intended, according to a new report.
The report, from the Treasury Inspector General for Tax Administration, noted that Congress established the office of the National Taxpayer Advocate, who runs the Taxpayer Advocate Service, to assist taxpayers who experience difficulties resolving their tax problems with the IRS or receiving timely and appropriate responses to their inquiries. However, many of these taxpayer issues fall under the systemic burden category. The report underlined the importance of the Taxpayer Advocate Service, or TAS, effectively and efficiently assisting taxpayers with systemic burden cases to ensure they are not further harmed by problems with IRS processes.
TIGTA’s report estimates that TAS responses to such cases affect more than 85,000 taxpayers each year. The report found that the TAS properly exercised its authorities when taking account-related actions to assist taxpayers. For example, TAS personnel can input a change of address to a taxpayer account, but the TAS does not have the authority to accept or deny requests for penalty abatements.
However, TIGTA’s review of the TAS’s handling of a statistical sample of cases found several areas where taxpayer service could be improved. Specifically, TIGTA identified in more than half the cases that TAS personnel bypassed taxpayers’ authorized representatives, made unauthorized disclosures to third parties or made numerous processing errors.
To help keep its workload manageable, the TAS has policies in place as to which types of cases it will accept and which it will refer to other IRS functions. “However, the TAS often accepted cases that its policies noted should have been referred to other IRS functions,” said the report. “Accepting these cases increases the TAS’s workload; nonetheless, it is within the TAS’s discretion.”
TIGTA also identified unreliable data that was captured on the Taxpayer Advocate Management Information System, which could affect management decisions. In the 100 cases that TIGTA statistically sampled, more than half had incorrect criteria, primary core issues and/or relief codes.
TIGTA recommended that the National Taxpayer Advocate reissue guidance to TAS personnel explaining the requirement to contact only authorized representatives; review three potential unauthorized disclosures of tax return information; provide training regarding the systemic burden case acceptance criteria; and reinforce the importance of ensuring that all actions taken on cases are correct and accurate.
In response, the TAS agreed with seven of the eight recommendations and plans to take corrective actions to address them. For the one TIGTA recommendation with which TAS disagreed, TIGTA said it continues to believe that TAS would benefit from tracking cases that were accepted using TAS’s discretion.
“Processing systemic burden cases efficiently is of vital importance to the Taxpayer Advocate Service, to the IRS operating divisions, and particularly to the taxpayers we serve,” wrote National Taxpayer Advocate Nina Olson in response to the report. “Although I feel that TAS has performed well in processing the high volume of cases, I acknowledge there is room for improvement. TAS is already working on a number of initiatives to improve case processing and reduce delays and errors.”
Olson pointed out that the draft report did not adequately describe the many exceptions that TAS already makes to the general policy of no longer accepting certain systemic burden cases.