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MSP #8: TAXPAYER RIGHTS

The IRS Does Not Effectively Evaluate and Measure Its Adherence to the Taxpayer’s Right to a Fair and Just Tax System

TAS Recommendations and IRS Responses

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1.

TAS RECOMMENDATION #8-1

Revise CJEs and quality attributes to align with statutory, regulatory, case law, and IRM instructions for employees to consider the specific facts and circumstances that affect taxpayers’ underlying liabilities, ability to pay, and ability to provide timely information.

IRS RESPONSE TO RECOMMENDATION: ​​​There is no need to revise CJEs to align with the requirements included in the Taxpayer Bill of Rights (TBOR) because the Fair and Equitable Treatment of Taxpayers Retention Standard already holds all IRS employees accountable for TBOR. In particular, the standard states: “Consistent with the incumbent’s official responsibilities, administers tax laws fairly and equitably, protects taxpayer rights, and treats them ethically with honesty, integrity, and respect.”

The IRS Human Capital Office (HCO) conducted a review of twenty mission critical performance plans of occupations throughout the IRS related to tax compliance. The review revealed that all but three performance plans addressed the TBOR in additional aspects of the CJEs. Below are examples of the language contained in the aspects:

Communicates taxpayer’s legal obligations, responsibilities, and the consequences for failure to comply.
Educates and assists taxpayer on filing and paying responsibilities.
Considers the taxpayer’s point of view to develop creative approaches to reach fair and equitable resolution.
Uses effective listening and checks for understanding, applying courtesy, tact, empathy, and appro­priate purpose statements.
Provides accurate, clear, and concise verbal communication appropriate to the taxpayer’s level of understanding.
Provides customer with appropriate payment options.
Ensures that taxpayer rights are appropriately protected.
Recognizes and uses a conflict management approach to minimize taxpayer burden, avoid confron­tation, and promote voluntary compliance.

The IRS is updating its information technology with respect to performance management. If appropriate, prior to the implementation of the new system, we will review the definitions for CJE2, Customer Satisfaction-Knowledge; CJE3, Customer Satisfaction-Application; and CJE 4, Business Results-Quality, to determine if revisions are necessary to further emphasize the importance of taxpayer rights.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The Most Serious Problem explains why relying on a single, overarching standard to measure taxpayer rights is ineffective because employees may excel in one area, but be deficient in another aspect of taxpayer rights. The same argument applies to the Fair and Equitable Treatment standard. Because the IRS only requires managers to prepare a narrative justification if the standard is “not met,” compliance with the standard may in some cases be a simple check-a-box exercise instead of a thoughtful consideration of actions the employees have taken to protect certain rights and whether the employees have infringed upon other rights.

The recommendation requested the IRS revise its quality attributes and CJEs to specifically measure how well the IRS considers a taxpayer’s facts and circumstances as part of the right to a fair and just tax system and gave numerous examples of measures that would provide such an opportunity. Notably, many of the examples of CJEs listed in the IRS’s response do not relate to this aspect of the right. For example, recognizing and using a conflict management approach is not related, and providing the customer with appropriate payment options is so vague it could just be a check the box item, with no consideration as to the taxpayer’s facts and circumstances. The first two CJEs listed have nothing to do with taxpayer rights at all — they relate to taxpayer responsibilities and things the IRS must do, not rights, which are what the IRS is supposed to protect. The response misses the point entirely. Until the IRS updates the measures to capture whether employees consider a taxpayer’s facts and circumstances, it will not be able to discern whether employees are respecting this aspect of the right. Measuring how many employees meet the Fair and Equitable Treatment Standard will not provide this information.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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2.

TAS RECOMMENDATION #8-2

Update guidance for developing commitments to provide examples and emphasize how commitments can further the protection of taxpayer rights.

IRS RESPONSE TO RECOMMENDATION: ​​​​​All managers’ performance plans currently include a Customer Service and Collaboration Responsibility, as well as language on Retention Standards, that highlight the protection of taxpayer rights.

Prior to the implementation of the new performance management system, we will assess the Customer Service and Collaboration Responsibility to determine if revisions are necessary to further emphasize the importance of taxpayer rights.

CORRECTIVE ACTION: N/A

TAS RESPONSE: Customer service is part of the TBOR — specifically it falls under the taxpayer’s right to quality service. However, this is only one of the ten rights. The Most Serious Problem focused on the right to a fair and just tax system, which is not addressed by the Customer Service and Collaboration Responsibility. The IRS points to the Fair and Equitable Treatment of Taxpayers Retention Standard, which Congress requires the IRS to measure, but this by itself is insufficient for the reasons discussed above. Managers should be held accountable by committing to take actions and set goals related to those actions. Managers can then be appraised based on their adherence to these commitments, which will incentivize them to follow through with actions and initiatives to protect taxpayer rights. The National Taxpayer Advocate is concerned about the IRS not providing specific examples of how commitments can further the protection of taxpayer rights.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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3.

TAS RECOMMENDATION #8-3

Add information throughout its strategic plan to tie goals and objectives to taxpayer rights under the TBOR and add objectives: (1) to evaluate employees’ performance with respect to and in accord with taxpayer rights, and (2) to train all employees on taxpayer rights.

IRS RESPONSE TO RECOMMENDATION: ​​​​The IRS has taken actions to address the NTA’s recommendation to add information throughout its strategic plan to tie goals and objectives to taxpayer rights under the TBOR. The draft FY 2018- 2022 IRS Strategic Plan, which will be published by June 30, 2018, includes references to taxpayer rights throughout the document, as follows:

The full text of the TBOR is featured prominently at the beginning of the strategic plan.
The TBOR is mentioned by name in the “Message from the Agency” which introduces the plan.
The Empower Taxpayers goal includes an objective to “help taxpayers understand their rights and responsibilities through proactive education and tailored outreach.”
The Protect the Integrity of the Tax System goal mentions that the IRS will ensure “taxpayers are aware of the Taxpayer Bill of Rights and resources afforded to them.”
The Partnerships goal includes references to “safeguarding taxpayers’ right to privacy and confi­dentiality” and “promoting global tax administration, including protecting taxpayer rights.”
The Workforce goal mentions “a workplace culture that empowers employees to improve the tax­payer experience and uphold the tax code fairly” and states that “employees will be trained with the necessary skills to serve a taxpayer base that is increasingly diverse and complex in terms of tax situations and demographics.”

The IRS has not added the specific objectives on evaluation of employee performance and on employee training on taxpayer rights requested in TAS Recommendation #8-3, as this level of specificity is not consistent with the broad objectives described in the five-year strategic plan. It is important to note that the National Taxpayer Advocate has had an opportunity to provide input on the goals and objectives in the draft strategic plan.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The National Taxpayer Advocate commends the IRS for including the full text of the TBOR in the strategic plan and specifically mentioning education and outreach related to the TBOR to improve taxpayers’ awareness of their rights. And indeed, the IRS accepted several, but not all, of the National Taxpayer Advocate’s recommendations regarding language in the strategic plan. However, in terms of employees, the only action the IRS seems to aspire to is protecting the right to confidentiality and a portion of the right to a fair and just tax system. The IRS has missed an opportunity to infuse the entire strategic plan with the TBOR by tying specific goals, and more importantly, measures to specific rights. This would have helped the IRS ascertain how its objectives support the taxpayer rights included in the TBOR. Because IRS performance documents relate back to the goals in the strategic plan, the IRS could have identified objectives that would drive employees to operationalize the TBOR in their actions.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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4.

TAS RECOMMENDATION #8-4

Collaborate with TAS in developing and delivering a mandatory annual training on taxpayer rights.

IRS RESPONSE TO RECOMMENDATION: ​​​The IRS has had a long-standing responsibility of ensuring, protecting and promoting the taxpayer rights compiled into the TBOR in the execution of our tax administration duties. IRS employees are trained to make it a personal responsibility to observe taxpayer rights in their daily interactions with taxpayers.

Employee training on taxpayer rights is designed to provide a meaningful explanation of how taxpayer rights apply to the specific skills of a particular job; while the definition of a particular right in the TBOR may not change, the application of that right can differ depending upon the nature of an employee’s work. For example, the skills and expertise required by a Revenue Agent conducting a taxpayer audit to ensure a taxpayer’s Right to Quality Service differ greatly from the skills and expertise needed by an employee in Submissions Processing, whose job it is to timely and efficiently process tax returns. As such, the training on taxpayer rights for Revenue Agents is necessarily customized to the work they do interacting with taxpayers and their representatives by, for example, focusing on oral and written communication techniques that are professional and appropriate for the taxpayer’s level of understanding and on how to advise taxpayers of considerations such as interest and penalty accumulation and of available options and resources, when taxpayers inform them they cannot pay their liability in full.

The Automated Underreporter Program (AUR) provides another example of how the IRS tailors its training for employees regarding taxpayer rights to ensure that the learning objectives are relevant and applicable to the employee’s particular job function. In AUR, employees receive training designed to explain the ten fundamental taxpayer rights included in the TBOR, in addition to explaining how to apply those rights when working AUR cases. As part of that training, AUR employees are reminded to direct taxpayers to the AUR Notice websites to view Publication 5181, Tax Return Reviews by Mail, and to Publication 1, Your Rights as a Taxpayer.

Similarly, collection representatives for the IRS Automated Collection System (ACS) receive customized training on how to uphold taxpayer rights. In continuing education courses for Fiscal Year (FY) 2016 and new hire training for FY 2017, for example, ACS employees were reminded about their responsibility to explain the Appeals process to a taxpayer or Power of Attorney, recognizing that taxpayers should be advised of their Right to Appeal whenever they indicate disagreement with a proposed or planned action by ACS. These ACS training courses were designed to ensure employees could successfully identify, address, and resolve issues regarding the appeals process, as outlined in IRM 5.19.8, Collection Appeal Rights.

HCO has developed interim guidance that requires course developers to include the TBOR at the beginning of all IRS training courses. HCO has recently begun a three year review and revision of IRS leadership training programs and will incorporate TBOR training into the materials.

The IRS observes taxpayer rights and will continue to ensure these rights are protected by training employees to understand the application of those rights in the context of their specific job. The IRS does not need to deliver a mandatory annual training on taxpayer rights given the full spectrum of TBOR already incorporated in training.

CORRECTIVE ACTION: N/A

TAS RESPONSE: Training employees on the TBOR should not be an either/or proposition, with either the TBOR incorporated into specific examples in specific courses or a broad training for all employees. Each one of these approaches has value. The National Taxpayer Advocate is pleased the IRS is giving attention to how individual courses incorporate the TBOR. However, because the individual courses vary greatly in their coverage of the TBOR and employees may take different courses depending on their positions, the IRS should agree to an annual mandatory briefing. This regular training for all employees would ensure they are periodically reminded about the TBOR and the IRS’s commitment to honor the rights. Such a training would not be a substitute for specific TBOR examples in training courses, but it would cement the TBOR as a fundamental part of tax administration and encourage an employee culture that respects taxpayer rights. Moreover, it would treat the TBOR with the same level of importance as taxpayer confidentiality. Specifically, the IRS conducts mandatory annual unauthorized access of taxpayer accounts (UNAX) training and also covers taxpayer confidentiality in function-and-job-specific training courses. The TBOR requires the same treatment. It is baffling that the IRS refuses to conduct annual mandatory TBOR training of all its employees. Therefore, the National Taxpayer Advocate does not consider her concerns to be addressed by the IRS actions described in its response.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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