SURVEYED TACS ARE RIGHT 75 PERCENT OF THE TIME: Using one of dozens of scenarios, undercover government auditors were mostly satisfied with the levels of assistance that they received at several of the Internal Revenue Service's Taxpayer Assistance Centers. A report from the office of the Treasury Inspector General for Tax Administration details the results of auditor visits to more than 70 TACs during the 2006 filing season. Using 47 standard scenarios, the auditors made anonymous visits to 50 TACs asking 200 tax law questions. Later, an additional 10 scenarios relating to the Katrina Emergency Tax Relief Act of 2005 were developed and another 20 visits to additional TACs were made to ask 80 questions.The report found that TAC workers:
* Correctly applied the tax law when answering 73 percent of the 200 standard-scenario questions, and misapplied the tax law for another 15 percent. For the remaining 13 percent of queries (26 questions), TAC assistors could not answer the questions and referred taxpayers to other IRS sources.
* Correctly applied the tax law when answering 75 percent of the 80 Katrina-related questions, and misapplied the tax law for another 8 percent. For the other 18 percent of queries (14 questions), TAC assistors could not answer the questions and referred taxpayers to other IRS sources.
The TIGTA report said that assistors answered questions incorrectly because they did not use the required tools, while other contributing factors included the complexity of the tax law and the number of potential questions that assistors have to be prepared to answer. Additionally, the report cited the fact that taxpayers making payments are not given priority at the TACs. At one center, taxpayers waiting for assistance with payments totaling $135,000 were turned away so that the location could close on time. The average wait time for auditors visiting the 13 surveyed TACs was 23 minutes.
The full report is available at www.ustreas.gov/tigta/auditreports/2006reports/200640122fr.pdf.
TAX COURT TO KEEP CASE ANONYMOUS: For the first time in its history, the U.S. Tax Court will allow a taxpayer to proceed with their petition anonymously.
The petitioner is a foreign national who had a family member kidnapped, held for ransom and subjected to physical harm several years ago - something not uncommon in the country where the petitioner lived and where the petition was originally filed. The petitioner's concern is that they or other members of their family could again be put in danger if their identity or financial circumstances were made public.
Though the court wrote that it has no provision in its rules allowing for a case to proceed anonymously, the court said that it is allowed some flexibility under the Federal Rules of Civil Procedure. "The risk of extreme physical harm to petitioner and petitioner's family outweighs the countervailing public interest favoring open judicial proceedings," the court wrote. It declined to rule on whether or not later opinions in the case would be made public.
The court's decision is available at www.ustaxcourt.gov/inophistoric/anonymous.tc.wpd.pdf.
IRS ANNOUNCES FEES FOR RESIDENCY CERTIFICATION: As previously announced, the Internal Revenue Service will soon begin charging user fees for the residency certification letters used to avoid foreign value-added taxes. The fee will be applied to Form 8802, Application for U.S. Residency Certification, for all applications postmarked after Oct. 2.
The form is actually used to request Form 6166, a letter that the applicant may use as proof of their status as a resident of the U.S. to claim benefits under an income tax treaty, or an exemption from a foreign country's value-added tax.
A single Form 8802 can be used to request multiple Forms 6166. The initial user fee of $35 covers a single Form 8802 requesting up to 20 letters for a single taxpayer identification number. From there, for each additional $5 supplied with the Form 8802, an additional 20 letters can be requested, regardless of the country for which certification is requested or the tax period to which the certification applies.
Accordingly, the following fee schedule applies based on the number of Forms 6166 requested per Form 8802:
* One to 20 letters - $35;
* 21 to 40 letters - $40;
* 41 to 60 letters - $45; and,
* 61 to 80 letters - $50.
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