Final week, I submitted to Congress the Nationwide Taxpayer Advocate’s 2022 Annual Report and the sixth version of the National Taxpayer Advocate’s Purple Book, which presents legislative suggestions designed to strengthen taxpayer rights and enhance tax administration for all taxpayers.
In my function because the Nationwide Taxpayer Advocate, I function the voice of the taxpayer on the IRS, and this report can be a product of listening to particular person taxpayers, enterprise taxpayers, and tax practitioners and listening to their considerations. The dangerous information final 12 months was that tens of millions of taxpayers and tax professionals skilled continued distress due to IRS paper processing delays and poor service. The excellent news is that the IRS has made appreciable progress, and as I state within the report, we will begin to see the sunshine on the finish of the tunnel. I’m simply undecided how far we have to journey earlier than we see daylight – and well timed refunds for our taxpayers.
The 2022 Annual Report to Congress accommodates details about the important thing challenges taxpayers are experiencing of their dealings with the IRS and makes suggestions to resolve them. As required by statute, I establish and focus on the ten most severe issues encountered by taxpayers:
- Processing Delays
- Complexity of the Tax Code
- IRS Hiring and Coaching
- Phone and In-Particular person Service
- On-line Entry for Taxpayers and Tax Professionals
- E-File and Free File
- IRS Transparency
- Insufficient Return Preparer Oversight
- Appeals Procedures
- Challenges Confronted by Abroad Taxpayers
The report additionally features a taxpayer rights and repair evaluation that presents efficiency metrics for every of the previous 4 fiscal years, an summary of our TAS advocacy actions and highlights of our successes, an outline of the ten federal tax points most steadily litigated over the past 12 months, and two analysis research. One research examines other ways to restructure the Earned Earnings Tax Credit score (EITC) to extend participation amongst eligible taxpayers whereas lowering improper funds. The opposite research studies on the performance of on-line companies provided by over 40 state tax businesses and three overseas tax businesses, which might function some extent of reference to assist the IRS enhance its personal on-line companies.
Along with making administrative suggestions in my report, I additionally suggest 65 legislative suggestions for consideration by Congress within the Purple Book. Listed here are just some:
- Amend the “Lookback Interval” to permit tax refunds for sure taxpayers who took benefit of the postponed submitting deadlines as a result of COVID-19 and different disasters;
- Authorize the IRS to ascertain minimal requirements for paid tax return preparers;
- Broaden the U.S. Tax Courtroom’s jurisdiction to adjudicate refund circumstances and assessable penalties;
- Modify the requirement that written receipts acknowledging charitable contributions should pre-date the submitting of a tax return;
- Restructure the Earned Earnings Tax Credit score (EITC) to make it easier for taxpayers and cut back improper funds; and
- Broaden the safety of taxpayer rights by strengthening the Low Earnings Taxpayer Clinic (LITC) program.
The IRS touches extra Individuals and companies than some other authorities company, so it’s essential to make the tax administration course of run easily. I sit up for assembly extra taxpayers and tax professionals this 12 months, listening carefully to the problems which can be inflicting heartburn for taxpayers, after which utilizing my seat on the desk to encourage the IRS and Congress to make significant, good modifications that can enhance taxpayer service, shield taxpayer rights, and strengthen tax administration.