IRS PARTNERS WITH TAX PREPARER GROUPS
Washington, D.C. -- The Internal Revenue Service is joining with several national tax and accounting organizations to give taxpayers new options and tips on selecting reputable tax professionals and avoiding unscrupulous preparers.
IRS Commissioner John Koskinen spoke at a press conference in mid-December in conjunction with members of several national organizations that represent hundreds of thousands of tax professionals across the nation.
"Some taxpayers may want to get help with the new provisions of the Affordable Care Act, and tax professionals provide one of several options available," Koskinen told reporters. "Most people only have to check a box on their Form 1040 return to indicate they have health care coverage, but some taxpayers claiming exemptions from coverage and those without coverage and those with premium tax credits may have questions. Tax professionals will be able to help guide taxpayers through what they need to do in these circumstances."
Commercial software programs will be able to help as well, he acknowledged. "We especially want to warn people about one type of scheme prevalent at tax time in particular where scam artists pose as tax preparers, make misleading promises to entice people to cut corners on their taxes, or even commit outright fraud in order to get bigger refunds. Last year we saw nearly 200 abusive tax return preparers receive criminal convictions."
He noted that IRS.gov contains advice on finding a reliable preparer and now provides links to outside tax professional organizations that can help.
Koskinen also noted that there is some free tax preparation help available for low-income taxpayers, the elderly, people with disabilities and those who have limited proficiency in English. The IRS supports volunteer income tax assistance centers and tax counseling for the elderly in the U.S. In addition, the service's Free File program offers free federal tax preparation and e-file options for all taxpayers in conjunction with tax software providers.
TAXPAYER ADVOCATE HIGHLIGHTS DECLINE IN TAXPAYER SERVICE
Washington, D.C. -- National Taxpayer Advocate Nina Olson released her 2014 Annual Report to Congress in mid-January, which expresses concern that taxpayers this year are likely to receive the worst levels of taxpayer service since 2001, when the IRS implemented its current performance measures.
The report recommends that Congress enact a principles-based Taxpayer Bill of Rights, adopt additional safeguards to make those rights meaningful, and provide sufficient IRS funding to make the "Right to Quality Service" a reality.
The report is the second of two annual reports required by the Internal Revenue Code to the House Ways and Means Committee and the Senate Finance Committee. The first report, due by June 30 of each year, must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year that begins in that calendar year.
The report says that the combination of the IRS's increasing workload, the erosion of public trust occasioned by the IRS's use of "Tea Party" and similar terms in screening applicants for tax-exempt status, and the sharp reduction in funding have created a "perfect storm" of trouble for tax administration, and therefore for taxpayers.
"Taxpayers who need help are not getting it, and tax compliance is likely to suffer over the longer term if these problems are not quickly and decisively addressed," Olson said.
In the preface to the report, Olson stressed four points:
"First, the budget environment of the last five years has brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively;"
"Second, the lack of effective administrative and congressional oversight, in conjunction with the failure to pass taxpayer rights legislation, has eroded taxpayer protections enacted 16 or more years ago;"
"Third, the combined effect of these trends is reshaping U.S. tax administration in ways that are not positive for future tax compliance or for public trust in the fairness of the tax system; and,"
"Fourth, this downward slide can be addressed if Congress makes an investment in the IRS and holds it accountable for how it applies that investment."
The report praises the IRS for implementing the NTA's longstanding recommendation to adopt a Taxpayer Bill of Rights. In addition, she said, "The IRS ran a generally successful filing season (although taxpayer services were sub-optimal largely due to staffing limitations), instituted a more equitable approach to its Offshore Voluntary Disclosure initiative, and introduced a voluntary system for educating unenrolled return preparers."
"All this is generally good news," she wrote. "But as we note in the report, the good news also raises additional questions and concerns." The report urges Congress to enact comprehensive tax reform, pointing out that simplification would ease burdens on taxpayers and the IRS alike.
In response to the report, National Treasury Employees Union president Colleen Kelley said, "The nation, along with the IRS workforce, is suffering from the $1.2 billion worth of budget cuts the IRS has endured since fiscal year 2010. It is appalling to me that only half of the callers will be able to get through to a customer service representative during this filing season, that Taxpayer Assistance Centers will be forced to turn people away and that millions of people who file paper returns will see their refunds delayed."
Kelley said that repeated budget cuts prevent the IRS from serving taxpayers, and also thwart its revenue-collection mission.
"IRS employees are doing their best to handle the rising demand for their services, but they will simply not be able to keep up," she warned.
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