Taxpayer Advocate Olson: 'My role is not to be a shill for the IRS'
National Taxpayer Advocate Nina Olson delivered what is likely to be her final public speech Friday before retiring at the end of July from nearly 19 years of running the Taxpayer Advocate Service at the IRS, announcing plans to start a nonprofit to continue her work advocating for taxpayer rights, while promising future battles against the entrenched tax bureaucracy, perhaps in front of the Supreme Court.
During a keynote speech at New York University’s annual Tax Controversy Forum, Olson described how she felt free to speak out even more independently about her relationship with the IRS now that she is nearing her retirement. She released her final report to Congress on Thursday, in which she assessed this past tax season and how the new tax law affected the IRS and taxpayers.
“When I raised issues about [Section] 965 last year, I raised them internally all over the place and with a number of cases as well, and then I went public with my concerns through the NTA blog,” she said. “I was told as a result of my going public that I was not a team player, that I had embarrassed people in the IRS. I feel that’s a very interesting concept. I want to talk about the concept of being a team player. Every single commissioner I have worked for has said to me in one form or another, ‘You are not being a team player, Nina.’ And my response to that has been, 'I am a team player. The NTA is a team player. I just have a different role to play on that team. My role is not to be a shill for the IRS.'”
Olson echoed criticism from an earlier panelist at the conference, TaxMam president Claudia Hill, about how the IRS had stealthily added about a dozen extra items to the online FAQ explaining the Section 199A pass-through deduction only four days before the April 15 filing deadline. “When you get guidance related to the filing season that comes out on April 11 or April 13, like we've seen with 199(A) or we've seen with 965 last year, that is really a violation of the taxpayer’s trust,” said Olson. “I view FAQs as an important tool, but they are vastly overused by the IRS. And to Claudia’s point about having to take screenshots of the IRS FAQ list every single day or every single week, where does that put you in the way of trust? And the kinds of tripping up that taxpayers can get because they just didn't take the screenshot that day, or they missed an FAQ the day before they filed their return -- it makes people feel like they're being entrapped, and there goes trust.”
Olson pointed out that the first IRS commissioner she worked with, Charles Rossotti, once asked her how the Taxpayer Advocate Service differed from other watchdogs like the Government Accountability Office or the Treasury Inspector General for Tax Administration.
“We are inside the IRS,” she responded. “We not only point out the most serious problems that taxpayers are having, we not only express our concerns about things, but it doesn't stop there. The amount of work that my employees do day in and day out, on teams, on reviewing the regs before they’re published, on looking at green-sheet regulations, the amount of time my employees spend trying to track down things — ... the number of times that we barge into meetings — invite ourselves to meetings that we were not invited to, for good reason — that is every single day happening somewhere in the IRS with my employees. There is nothing like it in the world. There's nothing like it in the federal government.”
Olson regularly issues reports to Congress on her concerns, and Congress views the Taxpayer Advocate Service as its eyes and ears. “If you care about taxpayer rights, you need to care about TAS,” she said. “Because I have a direct line to Congress, because over the years we have built this relationship, because Congress really views the Taxpayer Advocate Service as an institution that it has created. They can use the Taxpayer Advocate Service as the eyes and ears of Congress inside the IRS as well as the voice of taxpayers. They wrote the statute to get an unfiltered, uncensored view of what's going on in the IRS, as well as the voice of taxpayers.”
She bypasses the agency heads when she delivers her annual reports. “My reports go to Congress before anyone in the IRS sees them,” said Olson. “Believe me, people don't like that. I have had many, many executives tell me, ‘We don't think this is a real serious problem.’ And my response is, “Well, funny, you don't get to decide that. That's what Congress said.’”
Olson demonstrated her independence from the IRS throughout her tenure. “I have heard so many times, ‘Nina, be reasonable.’ I think I’m a very reasonable person, but the IRS may not think I’m a reasonable person because I’m not giving in to their point of view,” she said. “That goes with the phrase, ‘Look at it from the IRS perspective.’ If you read the annual reports to Congress, you will see that we actually do portray as fairly and accurately as we can the IRS perspective. We disagree with it. So I do look at the IRS perspective, but it is not my job to look at things from the IRS’s perspective. It is my job to look at things from the taxpayer's perspective. And the next NTA should not get sucked into that kind of language.”
So far, the IRS has not named a successor for her job. But Olson recommended the next NTA not give in to demands that they be more of a team player. “The next NTA needs to know what his or her role on that team is, and not get sucked in that being a team player means that you give in, when the taxpayers need you to not give in.”
The workload for her successor will be immense. “Right now, the Taxpayer Advocate Service is drowning in cases,” said Olson. “We are being slammed. And here is why: Since 2010, my employees who do the front-line work with taxpayers in cases have declined by 31 percent. Our cases have only declined by 17 percent. They have declined because we've been trying to do some other stuff with them like quick contacts and things like that. So you have already an imbalance.”
She pointed out that while the IRS can set up work plans spelling out how many tax audits or collection cases they will work on for that year, the Taxpayer Advocate Service tries to help any taxpayer who is experiencing significant hardship.
Among the biggest accomplishments of her tenure, Olson listed her role in getting Congress to pass a Taxpayer Bill of Rights and in setting up Low-Income Taxpayer Clinics. She also praised the Taxpayer First Act that Congress passed this month, which will make a number of significant changes in the way the IRS operates. Unlike the IRS, which has been shuttering many of its in-person Taxpayer Assistance Centers, Olson said the Taxpayer Advocate Service has been opening up offices around the country to help taxpayers.
Even as she nears the date of her retirement, Olson is gearing up to start a mobile van service this summer that will visit taxpayers in remote areas of the country, particularly hard-hit disaster areas where people are looking for tax relief. In addition, she showed off a draft version of a "Taxpayer Roadmap" graphic that will be available on the Taxpayer Advocate Service website showing taxpayers how to navigate through the various resources and services available, and find the help they need with their tax problems. Olson pointed out that the Taxpayer Advocate Service website is the only place where Spanish-speaking taxpayers can find a copy of the new Form 1040 translated into Spanish.
Olson thanked the audience for all the support and encouragement they have given her and her office and she gave some hints about what her own plans are for the future. “I have formed a nonprofit called the Center for Taxpayer Rights, so that is where I will be working,” she said. “On Monday, I got sworn in to the Supreme Court bar, so there will be something in that area. I would think there will be some amicus briefs coming down.”
She hinted she may be doing some advocacy on behalf of Amish taxpayers. Because of changes in the Tax Cuts and Jobs Act, she noted that the Amish and other sects who do not believe in participating in any social welfare programs like Social Security do not have Social Security numbers, and therefore the IRS is taking the position that they will be denied the Child Tax Credit and the entire college tax credit. She is also looking forward to the next International Conference on Taxpayer Rights, which she helped originate during her busy tenure.