National Taxpayer Advocate Erin M. Collins today released her 2022 Annual Report to Congress, saying taxpayers and tax professionals “experienced more misery in 2022” due to paper processing delays and poor customer service. But the report says the IRS made considerable progress in reducing the volume of unprocessed returns and correspondence and is poised to start the 2023 filing season in a stronger position.
In her preface to the report, Collins predicted that taxpayer service will improve in 2023. “We have begun to see the light at the end of the tunnel,” she wrote. “I am just not sure how much further we have to travel before we see sunlight.”
Most Serious Problems
By statute, the National Taxpayer Advocate is required to identify the ten most serious problems encountered by taxpayers in their dealings with the IRS. This year’s report details the following problems:
- Processing Delays;
- Complexity of the Tax Code;
- IRS Hiring and Training;
- Telephone and In-Person Service;
- Online Access for Taxpayers and Tax Professionals;
- E-file and Free File;
- IRS Transparency;
- Return Preparer Oversight;
- Appeals; and
- Overseas Taxpayers.
For each problem except complexity of the tax code, the report includes an IRS response. The report also includes a section titled “At a Glance” that provides concise summaries of the ten “most serious problems.”
Taxpayer Advocate Service administrative recommendations to the IRS
The report makes numerous recommendations to address taxpayer problems, including the following:
- Hire and train more human resources employees to manage hiring all IRS employees.
- Ensure all IRS employees – particularly customer-facing employees – are well-trained to do their jobs.
- Create robust and accessible online accounts with functionality comparable to that of private financial institutions
- Temporarily expand uses of the Documentation Upload Tool or similar technology.
- Improve the readability of tax transcripts.
- Enable all taxpayers to e-file their tax returns.
National Taxpayer Advocate “Purple Book” of legislative recommendations
The National Taxpayer Advocate’s 2023 Purple Book proposes 65 legislative recommendations for consideration by Congress. These legislative recommendations are designed to strengthen taxpayer rights and improve tax administration. Among them are the following:
- Amend the “Lookback Period” to allow tax refunds for certain taxpayers who took advantage of the postponed filing deadlines due to COVID-19.
- Authorize the IRS to establish minimum standards for paid tax return preparers.
- Expand the U.S. Tax Court’s jurisdiction to adjudicate refund cases and assessable penalties.
- Modify the Requirement That Written Receipts Acknowledging Charitable Contributions Must Pre-Date the Filing of a Tax Return.
- Restructure the Earned Income Tax Credit (EITC) to make it simpler for taxpayers and reduce improper payments.
- Expand the protection of taxpayer rights by strengthening the Low Income Taxpayer Clinic (LITC) program.
Additional information in this year’s report:
This year’s report recommends specific initiatives that Collins is urging the IRS to include in its plan showing how the additional funding it received in the Inflation Reduction Act will be spent, and it includes two research studies – one on ways to restructure the Earned Income Tax Credit to increase participation among eligible taxpayers while reducing improper payments, and the other designed to help the IRS improve its online operations by studying the functionality of online operations offered by over 40 states and several foreign countries. The report also includes the following:
- A taxpayer rights assessment that presents performance measures and other relevant data;
- An At a Glance section that provides concise summaries of the ten most serious problems;
- A description of TAS’s case advocacy operations during fiscal year 2022;
- A summary of key TAS systemic advocacy accomplishments;
- A discussion of the ten federal tax issues most frequently litigated during the preceding year; and
- A summary of some of TAS’s successes throughout 2022.
Please visit https://www.taxpayeradvocate.irs.gov/AnnualReport2022 for more information.
About the Taxpayer Advocate Service
TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local advocate’s number is available in your local directory and at https://taxpayeradvocate.irs.gov/contact-us. You may also call TAS toll-free at 877-777-4778. TAS can help if you need assistance resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. And our service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to https://taxpayeradvocate.irs.gov. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA.