We are always interested in the goings-on in Washington DC. From last weeks NAEA E@lert, we provide you a peek behind the curtain, as Bob Kerr summarizes Taxpayer Advocate Nina Olsen’s bi-annual report to congress:
The National Taxpayer Advocate’s Annual Report to Congress landed with a thud yesterday in Washington, DC. The 60+ page executive summary kept NAEA Senior Government Relations chief Bob Kerr company on yesterday’s flight from DC to Sacramento and he offers the following observations:
The NTA, Nina Olson, focuses on IRS’ deteriorating customer service:
- “If you are a tax professional trying to resolve a problem for a client, you have a 20-minute wait on the line inaptly named “Practitioner Priority Service.”
- “IRS has abandoned return preparation in its walk-in sites… [and] also has shut down tax law assistance on the phones after April 15. …Thus, in the United States today, tax preparation and assistance is now, for the most part, privatized. That is, for a taxpayer to comply with his or her requirement to file a tax return, the taxpayer generally must pay for assistance, pay for software, pay for advice. This is an unprecedented change in tax administration… [and] particularly devastating when one considers that over 50 percent of prepared individual returns are completed by unenrolled return preparers.”
With respect to IRS’ budget, Olson states the agency desperately needs more funding:
- “Since fiscal year (FY) 2010, the IRS budget has been cut by nearly eight percent while inflation has risen by about six percent. As a result, the IRS has been hampered in its ability to provide “top quality service” and maintain effective enforcement.”
- “The requirement to pay taxes is generally the most significant burden a government imposes on its citizens. The National Taxpayer Advocate believes the government has a practical and a moral obligation to make tax compliance as simple and painless as possible.”
- “Since fiscal year 2009, budget cuts and sequestration have led the IRS to cut its training budget by over 85 percent…The IRS drastically cut its training budget to meet its required overall reductions under the Budget Control Act of 2011. Even before the sequester, however, the IRS had sharply reduced the dollars it spent on training…In FY 2013, the IRS spent less than $250 per employee on training, as compared with $1,450 per employee in FY 2009.”
With respect to return preparer oversight, the NTA remains convinced of the importance of a return preparer oversight system:
- “…minimum competency standards are essential to protect taxpayers and improve return accuracy.”
- “Filing a tax return is not merely a ministerial act. The taxpayer is taking a position before the federal government regarding items of income, expenses, and eligibility for government benefits that are administered by the IRS. Taxpayers pay preparers for their knowledge and skills because they are uncomfortable navigating the complexity of the tax laws by themselves. Taxpayers often suffer significant consequences when a preparer is incompetent or unethical.
Olson also focuses on the agency’s enforcement policies, and seems particularly interested in collection policies (ACS case selection, general collection procedures, and CSED extensions).