In January, the National Taxpayer Advocate delivered the Annual Report of the agency to Congress.
The office of the National Taxpayer Advocate (TAS) is relatively unknown to the average American taxpayer. TAS is an independent agency within the Internal Revenue Service (IRS) with a mandate to represent the interests of taxpayers. The unit offers information and services to taxpayers to ensure they are informed, as well as offering services to consumers who are unable to resolve tax problems with the IRS.
With a staff of approximately 1,800, TAS is headed up by Erin Collins. Ms. Collins is appointed by the Department of Treasury. The agency has the ability to step into a tax controversy with the IRS on behalf of the taxpayer in specific circumstances. TAS presents two reports each year to Congress. In January, the Annual Report is delivered to legislators and in June of each year, the Advocate submits an Objectives Report.
The Annual Report is a basic “report card,” that provides a broad look at issues facing taxpayers, identifies commonly litigated issues, and highlights other topics.
The report describes the most serious problems challenging taxpayers in their interaction with the IRS. This year, some of the problems include:
- Excessive delays in processing and handling refunds
- Lack of highly trained IRS employees
- Serious difficulties in reaching IRS representatives in-person or via telephone
- Delays and difficulties throughout the 2021 filing season
- Inferior infrastructure and process to handle and administer online taxpayer accounts
- Deployment of digital tools is unsatisfactory, adding to difficulties in communicating with the IRS
Identified within the Annual Report are top issues that led to petitions to the Tax Court during the 2021 filing season. Those issues, in descending order, include:
- Petitions related to gross income
- Challenges to business and trade expenses
- Family status petitions, including child tax credits, dependency exemptions, and Earned Income Tax Credits
- Collection processes
- Issues involving Federal Income Tax Withholding
- Petitions involving charitable or standard deductions
- Tax challenges to the American Opportunity Tax Credit
- Tax court litigation around penalties for delinquent returns
The TAS recognizes the hard work of the IRS. Between 2010 and 2021, the number of individual returns filed has increased from 142 to 169 million. In addition to IRS audits, fraud investigations, and collections, Congress tasked the IRS with administering key pandemic relief measures—all on a budget that has been reduced by about 20 percent since 2010.
That said, the TAS sums it up in straightforward language, “There is no way to sugarcoat the year 2021 in tax administration: From the perspective of tens of millions of taxpayers, it was horrendous.”
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