Friday, Jan. 9
Posted 2 p.m. EDT
Taxpayer Advocate suggest ways to help taxpayers
Suddenly, everyone is the taxpayer's friend.
The IRS has taken steps of late to help out taxpayers hit hard by the crashing economy. First there was the release of liens on homes back in December and then just this week the announcement that it would work with taxpayers who, in this bad economy, are having trouble paying their tax bills.
Now it's the National Taxpayer Advocate's turn.
Nina Olson, who holds the job as the IRS' in-house but independent watchdog, issues an annual report to Congress each January on how the IRS is doing its job and where it needs to improve. Part of that report is a list of the 20 most serious problems facing taxpayers, and there's more on that a bit later.
But Olson also used this year's report to call on the IRS to help taxpayers who are in financial trouble. With a deepening recession expected in 2009, she said the tax agency must consider the circumstances of taxpayers facing financial hardship before it initiates enforcement actions.
In the report, Olson specifically cited "taxpayers who previously were able to pay their taxes find themselves unemployed, behind on housing payments, and unable to meet their basic living expenses."
Did IRS Commissioner Doug Shulman manage to get his hands on the report before it was released? Or was it just coincidence that he and Olson basically had the same message this week when it comes to working with taxpayers during these trying financial times?
I guess it doesn't really matter. What is important is that the IRS, both its leader and the person charged with keeping an eye on how it's doing, agree. Let's just hope that the consolidated recognition of the problem will lead to actual results that help the taxpaying public.
What's your biggest tax problem? The smart alec quip of paying taxes doesn't count. But you'll probably see some other things on the list below that do cause you filing problems:
1. Complexity of the tax code.
2. Taxpayer economic difficulties and IRS enforcement actions.
3. Understanding and reporting cancellation of debt income.
4. Employment taxes.
5. Identity theft and the IRS response.
6. IRS service to taxpayers.
7. Navigating the IRS.
8. ITIN (taxpayer ID numbers) applications.
9. IRS access by taxpayers outside the United States.
10. Customer service within compliance.
11. Local compliance issues.
12. Customer service issue in the automated collection system.
13. Emerging issues, such as "virtual worlds" and taxation.
14. Examination process.
15. IRS notice problems.
16. Impact of centralized IRS administration.
17. Incorrect examination referrals and prioritization.
18. Inadequate files management by IRS.
19. Miscalculated interest and penalties.
20. Inefficiencies in and employer burdens imposed by the wage reporting program .
You can read Olson's detailed discussion of these taxpayer problems in the full report, available at the special Taxpayer Advocate's Web page.