Taxpayer Advocate Services

Let’s face it, Americans dread bureaucracy, and when it comes to bureaucracies, there are few as imposing as the Internal Revenue Service. Complaints and jokes about the seemingly unending string of numbered forms, schedules, tables, and references are a well-weathered American trope, and every tax season a majority of taxpayers pay for a person or software to sort through the jumble for them.

But even more daunting is when you seemingly did everything right, and then receive a letter saying that your taxes have been selected for audit. Notices are captioned with a string of numbers and letters, with large print telling you to how much to pay, and when. Once you manage to put aside the shock and worry about what this will mean for your finances, you read on and are often left with a contact number to call “if you disagree.”

Unfortunately, even if you are lucky enough not to be left on hold for half the day, and correctly navigate through every touch-tone menu, reaching a “real person” is not always the end of your bureaucracy woes. The person you reach may have no familiarity with your particular circumstances or may not even be familiar with the specific tax codes and regulations that apply to your case. They may not fully understand your procedural rights or may not communicate them to you effectively. It may be that you have a unique situation that doesn’t fall neatly within any specific department’s usual wheelhouse. In the worst-case scenario, you could even end up with someone on the other end of the phone who would rather obstruct and misdirect than deal with a difficult taxpayer or complicated situation. When this happens, it can feel particularly disheartening, as you are typically provided with only a single number, and unlike the case in many private businesses, there is no option to “speak to the manager.”

Because of the compulsory nature of dealing with the IRS, and its seemingly opaque nature, people often feel steamrolled by the Service. To help create a more just and less frustrating experience, recently retired Taxpayer Advocate Nina Olson proposed, and Congress adopted, a “Taxpayer Bill of Rights,” which ensures things such as the right to be informed, the right to appeal, and the right to a fair and just tax system, among others. The IRS tries to bring life to these rights through things such as including appeals rights information on notice forms or directing low income taxpayers to free clinics. Often though, these rights may seem illusory when faced with a complex and massive bureaucratic apparatus.

In response to the real and perceived difficulties taxpayers and tax professionals alike have experienced with the IRS, the IRS created the Taxpayer Obudsman in 1979, which was codified by Congress in 1988, and replaced by the Taxpayer Advocate Service in 1996. The Taxpayer Advocate’s job is to provide substantive help to taxpayers who are having “significant hardships” with the IRS, and to recommend administrative changes to alleviate such difficulties. They bill themselves as “your voice at the IRS” and can be a valuable resource when you seem to hit a stone wall and aren’t getting the answers or assistance you need.

The Taxpayer Advocate is by design fairly accessible. They have a useful website and can be contacted directly by phone or mail. They even have offices in every state, to best assist local taxpayers. They also have authority to issue meaningful orders to the rest of the Service, including ordering the release of property, and can seemingly cut through red tape to make things happen, even when you were previously told “that’s just not possible in our system.” Additionally, when an IRS agent fails to properly follow administrative guidance (their own internal rules), the Taxpayer Advocate is required to draft orders in a manner that is favorable to taxpayers. They are a valuable resource for taxpayers and professionals alike when navigating through the ordinary IRS channels seems to have reached a dead end.

It is important to note, however, that the Taxpayer Advocate is not a panacea for all IRS problems, and is not typically the starting point when an IRS problem arises. This is because the Taxpayer Advocate is only tasked with helping taxpayers who are having a “significant hardship” as a result of the manner in which internal revenue laws are being administered. A significant hardships is defined as (A) an immediate threat of adverse action; (B) a delay of more than 30 days in resolving taxpayer account problems; (C) the incurring by the taxpayer of significant costs (including fees for professional representation) if relief is not granted; or (D) irreparable injury to, or a long-term adverse impact on, the taxpayer if relief is not granted.

It is also important to note that while Congress created the Taxpayer Advocate Service to assist taxpayers who are experiencing hardships as the result of IRS practices, they still work directly for the government, rather than you personally, and the scope of such help may be much narrower than you would receive from a tax attorney or CPA. They may help you with a stone-walling employee, but they are not going to help make sense of your accounting, craft a legal argument that frames the facts and the law as favorably as possible, or represent you in tax court. The Taxpayer Advocate is not a one-stop shop to make your IRS woes go away, but they are an extremely useful tool for taxpayers and professionals alike when we encounter the elements of bureaucracy we most dread.

Do you have tax questions? Send us a message through the form below or call us at 816-561-5000 to schedule a consultation.

*This post was originally published on July 31, 2019