The Taxpayer Advocate Service is revising the criteria it uses to accept cases from taxpayers who are having trouble dealing with the Internal Revenue Service to cut down on its caseload.

In an email to tax professionals Friday, the IRS said, “The Taxpayer Advocate Service (TAS) is designed to be a "safety net" for taxpayers who are experiencing problems with the IRS. However, because TAS cannot help all six million to 12 million taxpayers who may be having problems at any given time, it must focus on cases where it can add the most value.”

The email then linked to a document dated June 2012 with revised case acceptance criteria on the Taxpayer Advocate site. It lists four categories where the TAS plans to focus:

1. Where a taxpayer is experiencing some financial difficulty, emergency, or hardship, and the IRS needs to move much faster than it usually does (or even can) under its normal procedures. In those cases, time is of the essence. If the IRS doesn't act quickly (for example, to remove a levy or release a lien), the taxpayer will experience even more financial harm.

2. Where many different IRS units and steps are involved, and the case needs a "coordinator" or "traffic cop" to make sure everyone does their part. TAS plays that role.

3. Where the taxpayer has tried to resolve a problem through normal IRS channels but those channels have broken down.

4. Where the taxpayer is presenting unique facts or issues (including legal issues), and the IRS is applying a “one size fits all” approach, isn’t listening to the taxpayer, or doesn’t recognize that it needs new guidance for those circumstances.

This is the second time in the past year that TAS has restricted its case acceptance criteria as budget cutbacks took a toll on the IRS. Last October, the service, which is headed by National Taxpayer Advocate Nina Olson, said it was temporarily changing the criteria it uses for accepting cases and said it would no longer deal with cases in which the problem involves an IRS delay in processing certain tax documents (see IRS Taxpayer Advocate Service Limits Its Assistance). However, in the revised case acceptance criteria, the IRS said there are some exceptions to this policy.

“ Last year, we assessed where our efforts have the greatest impact, and identified four types of issues in which the IRS seemed to get the right answer (though slowly),” said TAS. “Those cases involve the processing of original tax returns, amended returns, rejected and unpostable returns, and injured (but not innocent) spouse claims. We determined that TAS generally won’t accept cases involving these pure processing issues so we could focus on higher-impact problems.
“However, there are many exceptions to this policy. If the taxpayer is suffering an economic burden, TAS will take the case. If the case involves other issues, as in the example below, TAS will take the case. If the taxpayer is referred by a congressional office, TAS will take the case. And if the taxpayer specifically requests and insists, TAS will take the case.”

TAS provided two examples of the types of cases it will or will not accept. In the first example, a taxpayer has more than one issue. “The normal processing time for an amended return is approximately eight to 12 weeks. The taxpayer filed a 2010 Form 1040X more than four months ago expecting a refund, but also has an outstanding balance for tax year 2009 and is receiving IRS collection notices. The 2010 refund would pay the balance in full and leave a small amount for the taxpayer. TAS will accept the inquiry and establish a case because expediting the processing will resolve a collection issue. “

In the second example, the taxpayer has a single issue, but TAS will not be able to accept it. “The taxpayer filed a 2010 Form 1040X more than four months ago expecting a refund but this time has no audit or collection issues and is not facing an economic burden. TAS won’t open a case, but instead will refer the matter to the appropriate IRS unit,” said TAS.

TAS indicated that it would continue to work to the best of its ability to help tax preparers and taxpayers, but within limits. “We’ll continue striving to help tax professionals and their clients. But before you contact TAS, please remember that we’re a finite resource that Congress created not to substitute for regular IRS procedures but to help taxpayers who need special attention.”

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