National Taxpayer Advocate Erin Collins Delivers Her First Report to Congress

WASHINGTON, June 29, 2020 /PRNewswire/ -- National Taxpayer Advocate Erin M. Collins today released her first report to Congress, identifying taxpayer challenges arising from the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the IRS's implementation of the Taxpayer First Act (TFA) as priority issues the Taxpayer Advocate Service (TAS) plans to focus on in the coming year.  

"I am proud to advocate for taxpayers' rights and to work toward improving the taxpayer experience to ensure a fair and just tax administration. The effects of COVID-19 will continue to be felt for the foreseeable future. We will continue to identify areas where taxpayers' needs are not being met and will continue to advocate for alternative approaches to meet those needs," Erin M. Collins said.

Taxpayer Challenges Arising from COVID-19 Pandemic

While the report praises the IRS for acting quickly to postpone over 300 filing, payment, and other time-sensitive deadlines, provide broad relief from compliance actions under its "People First Initiative," and disburse some 160 million Economic Impact Payments (EIPs) authorized by the CARES Act, there have been notable adverse taxpayer impacts, including:

• Taxpayers who filed a 2019 paper return and are entitled to refunds may be in for a long wait.
• Some taxpayers whose returns were mistakenly flagged by IRS processing filters are experiencing lengthy delays in receiving their refunds.
• Taxpayers who have needed help from the IRS have had difficulty obtaining it.
• IRS systems prepared over 20 million notices during the pandemic that could not be mailed due to closure of notice production centers between April 8 and June 1.

Taxpayer Challenges Relating to the CARES Act

The report says the IRS generally did a commendable job implementing the CARES Act, but taxpayer challenges remain, including:

• Individuals who did not receive some or all of their EIPs may have to wait until next year to receive them.
• Employers are struggling to determine whether they qualify for the Employee Retention Credit (ERC) and in what amounts.
• Businesses are facing challenges when seeking to utilize the CARES Act provision that authorizes the use of net operating losses to offset taxable income in prior years.

Implementation of Taxpayer First Act (TFA)

The report details some steps the IRS has taken to receive input from taxpayers, practitioners, and TAS, and identifies over two dozen TFA provisions that the IRS has implemented.  It expresses concern that the IRS has not properly implemented a provision directing it to establish a single point of contact for identity theft victims and that it may not properly implement a provision directing it to exclude taxpayers with adjusted gross incomes at or below 200 percent of the Federal Poverty Level from assignment to private debt collection agencies by December 31, 2020. 

Filing Season Review and Other TAS Areas of Focus for Fiscal Year 2021

The report provides a partial review of the 2020 filing season and identifies ten additional systemic areas TAS plans to focus on in the upcoming fiscal year.

IRS Responses to National Taxpayer Advocate Administrative Recommendations

The National Taxpayer Advocate's 2019 Annual Report to Congress, delivered six months ago, made 78 administrative recommendations for IRS consideration. Section 7803(c)(3) of the Internal Revenue Code requires the IRS to respond within three months to any such administrative recommendations. The IRS's responses are published in full in an appendix to the report.

Fifty-nine of the administrative recommendations were made in the "Most Serious Problems" section of the 2019 annual report. The IRS responded to those in full and has implemented or agreed to implement 41 (or 69 percent). The report also made 19 administrative recommendations in other sections of the report. The IRS has taken the position that it is not required to respond directly to them and has provided only general narrative responses. The National Taxpayer Advocate believes the IRS is required to provide direct responses. "The intent of the statute is clear," the report says. "If the National Taxpayer Advocate makes an administrative recommendation to mitigate a taxpayer problem – regardless of whether or where it has appeared in a report – the IRS should evaluate it and respond in writing so that TAS, Congress, and the taxpaying public know whether the IRS plans to implement the recommendation and, if not, why not. General narrative discussions that do not address recommendations directly fail to satisfy this objective."

The National Taxpayer Advocate is required by statute to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The first report must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year. The second report must discuss the ten most serious problems encountered by taxpayers, identify the ten tax issues most frequently litigated in the courts, and make administrative and legislative recommendations to resolve taxpayer problems.

About the Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local advocate's number is in your local directory and at https://taxpayeradvocate.irs.gov/contact-us. You can also call TAS toll-free at 877-777-4778. TAS can help if you need assistance in resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn't working as it should. Our service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to https://taxpayeradvocate.irs.gov. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA. 

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SOURCE Taxpayer Advocate Service