The Taxpayer Advocate Service (TAS), created by Congress in 1996, is designed to be a “safety net” for taxpayers who are experiencing problems with the IRS. The TAS’s mission is to make sure taxpayers’ rights are protected when they’re up against a government agency that many Americans find intimidating, if not downright terrifying. Lately, however, TAS’s effectiveness has been hampered by an increasing case load and the resulting delays.
Since its inception, TAS has helped millions of taxpayers resolve problems, ranging from frozen tax refunds to tax liens that threaten an individual’s livelihood. TAS helps taxpayers who have a significant hardship or are about to experience a significant hardship as a result of IRS actions. TAS may also get involved even though the IRS is doing nothing wrong, but it’s not acting fast enough, and because of that it’s going to create economic harm. Of course, TAS can’t possibly help all of the six to twelve million taxpayers who may be having problems at any given time. Consequently, in June 2012, TAS provided information to better clarify the types of cases where they can add the most value. The cases generally fall into four categories:
- 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 these cases, time is of the essence: if the IRS doesn’t act quickly (e.g. to remove a levy or release a lien), the taxpayer will experience even more financial harm.
- Where many different IRS offices and steps are involved, and the case needs a “coordinator” to make sure everyone does their part. TAS plays that role.
- Where the taxpayer has tried to resolve a problem through normal IRS channels but those channels have stalled or broken down.
- 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 a different perspective for those circumstances.
TAS generally will not accept cases involving pure processing issues such as processing original tax returns, amended returns, rejected returns, and injured (but not innocent) spouse claims. In these situations, TAS asks that tax professionals and their clients follow regular IRS procedures first and contact TAS only if they can really add value to the case. After all, TAS is a finite resource that Congress created not to substitute for regular IRS procedures, but to help taxpayers who need special attention.
So, how effective has the Taxpayer Advocate Service been over the years? Tax practitioners have given the agency mixed reviews. Most recently, the criticism concerns long delays. Taxpayers and their representatives are finding it harder than ever to reach employees at TAS. It can often take several weeks just to get a return phone call or the standard letter acknowledging receipt of the request for assistance, which isn’t the norm for the local office in Denver.
TAS is aware of the issue and has publicly acknowledged the delays. They claim a combination of large case inventories and reduced staffing are key factors. And of course, the 35-day partial government shutdown didn’t help the problem.
The shutdown delayed the agency’s ability to hire and train new case advocates in advance of the 2019 tax return filing season, resulting in fewer fully-trained employees to handle the influx of cases. TAS has pointed out that the hiring process takes time, and when new hires are made, experienced case advocates must be pulled offline to train them. All of these factors together have meant that case workers in many offices are taking longer than usual to respond to taxpayer calls.
The significant increase in TAS’s workload stems primarily from an influx of cases related to identity theft and the IRS’s Pre-Refund Wage Verification Program. In cases involving identity theft, refunds were being held up while taxpayers tried to prove to the IRS they were who they said they were. For cases involving refund verification, a relatively new program freezes a taxpayer’s refund when it detects potentially false wages or withholding. If there isn’t a perfect match between a tax return and the W-2 filed by the taxpayer’s employer, the IRS freezes the return, and the taxpayer won’t get a refund. Unfortunately, the program last year had major problems and refunds were unnecessarily frozen. These cases alone increased 58% in fiscal year 2019 through June 15 compared with the same period last year, and that was on top of a 230% increase in pre-refund wage verification cases the organization saw in fiscal year 2018 compared to fiscal year 2017. According to National Taxpayer Advocate Nina E. Olson, the TAS workers are still “drowning in these cases.”
The higher caseload has hurt morale in TAS offices around the country. Local advocates have seen a three-fold increase in the number of cases they work at a time. Instead of a typical workload of between 50 to 80 cases per person, caseworkers currently have about 180 cases, with some being assigned more than 200. With such high inventories, it has been challenging for TAS employees to get the results they’re used to and take pride in the work they’re doing. This also puts TAS advocates in the tough position of having to decide which cases are addressed immediately and which are pushed to a later date. For taxpayers who are seeking TAS assistance, the consequences of having their cases resolved in months rather than days is huge.
Contact Anderson & Jahde, PC, if you have questions about the Taxpayer Advocate Service or need assistance with any tax problem.