The Taxpayer Advocate Service (TAS) is a separate part of the IRS that has offices in every state, the District of Columbia, and Puerto Rico. It was first set up in 1979 as the Office of the Taxpayer Ombudsman to be the main defender for taxpayers within the IRS. The Technical and Miscellaneous Revenue Act of 1988 made the post office. Section 7803(c) is where the law says that TAS can do what it does. Here, you can find a more in-depth look at the past of TAS.
The goal of TAS is to make sure that people are treated fairly and know what their rights are. TAS is free, private, and made to fit the wants of users. Nina E. Olson, who is the National Taxpayer Advocate (NTA) and is in charge of TAS right now, is stepping down at the end of July after 18 years on the job.
TAS works in two main ways. First, it helps people with individual problems. Second, it suggests changes to the IRS or the tax rules that would make them work better as a whole. Individuals, companies, and tax-exempt groups may all be able to get help if a problem with the IRS is making them lose money or if an IRS process isn’t working right. On TAS’s website, cases are broken down into four main groups:
When a customer is having some kind of financial trouble, emergency, or problem and the IRS needs to move much faster than it usually does (or even can) under its normal processes. In those situations, time is very important. If the IRS doesn’t act quickly to remove a charge or release a lien, for example, the customer will lose even more money.
When many different IRS groups and steps are involved, and the case needs a “coordinator” or “traffic cop” to make sure everyone does their part. TAS fills that part.
When a person has tried to solve a problem with the IRS in the usual ways, but those ways have failed.
When a taxpayer brings up unique facts or problems (including legal problems) and the IRS uses a “one-size-fits-all” method, doesn’t listen to the taxpayer, or doesn’t realize it needs new rules for those situations.
On its website, TAS talks about some of these problems. Section 7811 of the law gives TAS the power to give Taxpayer Assistance Orders (TAOs), which tell the right IRS working unit to do something or stop doing something in certain cases. The IRS working unit can either follow the TAO or go to court to fight it.
If there are still disputes, the NTA and the Commissioner of Internal Revenue may have to step in. PMTA 2017-01, the Internal Revenue Manual 13.1.20, and Treas. Reg. 301.7811-1 has more information about how the TAO works. Also, Rothkamm United States, 802 F.3d 699 (5th Cir. 2015), talks about who is a “taxpayer” for the purposes of giving out a TAO.
Concerning systemic assistance, TAS looks at trends in customer problems to figure out if a process or method used by the IRS is not working right. If so, TAS will suggest ways to fix the problem. The NTA gives a report to Congress every year that lists at least twenty of the most important problems facing taxpayers. Taxpayers and tax professionals are urged to use the IRS’s Systemic Advocacy Management Systems (SAMS) to report problems with the systems. Low-income citizen clinics often use SAMS to point out problems with how the IRS does things.
TAS is a key part of the IRS’s ability to work well and efficiently. Congress passed the Taxpayer Bill of Rights (TBOR) in section 7803(a)(3) of the Internal Revenue Code thanks to the work of the NTA. An earlier Tax Times story talked about the TBOR, which gives people ten basic rights.
Using TAS when you don’t have a low income or for free
As mentioned above, some tax professionals think that TAS is a resource for low-income taxpayers and may not be able to help with business customers or problems that involve a lot of money. Because of this misunderstanding, tax professionals might not know how TAS can help them with disagreements with the IRS for specific clients or for industry-wide issues.
As tax professionals know, the IRS has rules about how to do things and only so many resources, so things can sometimes fall through the cracks. For example, customers may have asked for a return or a discount that isn’t really in question but is being held up for some reason the IRS doesn’t know about and there is no one they can talk to about it. TAS has helped me in a few of these cases to fix a problem quickly so that a business taxpayer’s account is paid correctly or a return is sent. This is just one example of how TAS can help people with more money.
The current debate about how the IRS handles the section 965 transfer tax shows another way in which TAS helps business taxpayers. In this case, the IRS has taken the surprising position that taxpayers who choose under section 965(h) to pay the transition tax over 8 years through installment payments cannot use any overpayments of 2017 tax liabilities as credits for 2018 estimated tax payments or get a refund until the amount of the overpayment is more than the total amount of the 8 years of installment payments. Here, you can find out more about the history of this problem.
Many tax professionals and organizations have tried to talk the IRS out of this position, which makes it harder for some taxpayers to put off paying the transition tax and instead creates a type of advance payment to the IRS for which the taxpayer doesn’t get any credit for the interest or use of the money they won’t be able to get. To help with this situation, TAS was asked about it.
Because of these questions, TAS worked to get the IRS to change its stance. In a blog post on August 16, 2018, the NTA talked in depth about the IRS’s stance and described why it should be changed. We still don’t know if the IRS will change its mind, but it’s good to see TAS fighting for a problem that mostly affects business taxes.
As the examples above show, TAS is a tool that people of all shapes and sizes can use. Getting to know your local Taxpayer Advocate and building relationships and links with TAS can be very helpful for helping tax clients with IRS issues that can’t be fixed through normal routine processes. In some cases, TAS may decide to send out a TAO or make a suggestion about how to deal with a widespread problem.
With this process, citizens can be sure that the IRS will listen to what they have to say. TAS can often help people solve problems quickly and effectively when they are involved.
