With IRS scandals in the news lately, taxpayer advocate Nina Olson reports that the actual crisis is the fact that “despite the IRS having a transformed mission, there is not enough funding to carry out that mission.” As a result, the IRS is not paying attention to taxpayer rights, as it attempts to reform its organization.
In the next fiscal year, the Taxpayer Advocate Service will be looking at:
Taxpayer Fraud and putting more effort into regulating the tax return preparer industry to protect taxpayers from potential financial harm.
Olson said that “the tax preparation industry has changed substantially over the last few decades as a result of the ready availability of return preparation software, refundable credits and refund based loans.” She proposes to add new rules that would impose minimum competency standards to give shady preparers less chance to commit fraud or misconduct. She is urging Congress to increase funding for IRS employee training that has been cut by 83 percent since 2010.
Resolving faulty revocations of the tax-exempt status of small Section 501 (c) (3) organizations and the failure to provide them with pre-revocation administrative appeal.
The report is looking into lack of guidance and transparency, management and administrative failures, and EOs’ “cultural difficulty” with TAS. Olson is recommending to Congress or the Treasury Department to provide clearer standards.
Other issues include:
- Quicker and more efficient taxpayer relief to victims of ID theft
- A Taxpayer Bill of Rights enacted by Congress
- The IRS’s ambiguous criteria to screen applicants for tax-exempt status.
- Timely collection alternatives that are effective in minimizing taxpayer burden that will reduce the number and dollar amount of balance-due accounts.
- Taxpayer education for taxpayers to learn about their responsibilities under the Affordable Care Act.
- More feasible and less threatening “settlement initiatives” for taxpayer who have chosen to bank overseas and who have failed to file reports.
I find it interesting that the answer to the IRS problems is more regulation on the preparation industry. Who is regulating the IRS?
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