Well. It’s been a while since we’ve sent out an NTA Blog — ten weeks, to be exact. We had intended to take a break while we finalized the Annual Report to Congress in December and start back up again with the publication of the Report in January. But as they say, all good plans turn to dust. The shutdown intervened, and by the time TAS staff reported back to work on January 28, the press of casework and getting the Annual Report out meant the blog would be in hiatus for a bit longer.
But now we’re back! This blog will be a hodgepodge of issues, and then we will start with a weekly series discussing different aspects of subjects we’ve covered in the Annual Report and elsewhere. The first item today is the 2018 Annual Report to Congress itself. We published it on Tuesday, February 12; in total, it is over one thousand pages long, spanning three volumes plus an Executive Summary. That’s a lot of pages to work through, so consider this blog a bit of a Baedeker guide to the Annual Report.
As in prior years, Volume 1 of the Report contains the Preface (written by me) and sections discussing 20 of the Most Serious Problems taxpayers face in dealing with the IRS along with our administrative recommendations, ten Legislative Recommendations to mitigate problems, ten Most Litigated Issues, and Case Advocacy trends. There is also a nifty part of the Report, at the beginning of the Most Serious Problems section, in which we present a series of “roadmaps ” to a tax controversy. More about that later in this blog. Volume Two contains six research studies and one literature review. And then we have the Purple Book —a concise summary of 58 past and current legislative recommendations, written in the format that Congress uses to explain legislation it has passed.
If you want a “top things to see” tour of the Report, I suggest you look at our press release here. It highlights some of the major topics covered in the report. The Executive Summary is more of a “Cliff’s Notes” version of the report—almost every aspect of it is discussed in one- or two-page summaries, so you have a synopses of each of the Most Serious Problems, Legislative Recommendations, Research Studies, and Literature Review. The Executive Summary is very helpful for getting a sense of our concerns about the topic and some basic data; the reader can then decide if he or she wants to delve into the detailed discussion contained in the full Annual Report.
The full discussions in the Report are precisely that—full discussions. We have copious footnotes, not because we like to show off our research, but because we believe in transparency of government. I want the public to know that we have sources to back up what we write; most of those sources are (or should be) available to the public, and that is why we cite them. Readers (or the IRS, for that matter) may disagree with our conclusions or recommendations, but they will have enough information from our discussion to form their own opinions and conduct further research, should they choose.
Now, about those roadmaps. I conceived the Most Serious Problem section of the 2019 Annual Report to Congress back in February of 2018 as a presentation of the taxpayer’s journey through tax administration. My reasoning was that we would have a new Commissioner by the time the Report came out, and it would be very helpful to have a sort of baseline of the IRS’s state of affairs and the taxpayer’s experience at the beginning of the new Commissioner’s service.
In this year’s Report we have done precisely that, and a bit more. We have actually created roadmaps of the taxpayer’s journey! Now, they are high level roadmaps, but the 7 maps trace the taxpayer’s path from obtaining tax information and preparation, through return submission and processing, into exam, collection, appeals, and litigation, with a detour into the various notices the taxpayer may receive along the way. It was fun to work on this—I spent many, many hours with the TAS Executive Director of Communications working on these maps. I brought the tax administration knowledge, and she brought the perspective of the non-tax person, i.e., the taxpayer. Other staff checked the accuracy of the maps and pointed out wrong turns.
But, but, but: for every box one sees on the maps, there are often five, if not 20, steps not shown. The process of creating these maps brought home to me how insanely complicated the U.S. tax administrative structure is. So we are not resting on our laurels regarding these diagrams. We are working on mapping out the next levels, and identifying the IRS letters and notices associated with each step. Our plan is to create an electronic roadmap, in which the taxpayer can input the number of the letter or notice he or she just received, and up will pop the appropriate roadmap and their location on the map. We will have pop-up windows explaining the legal import of the notice and the options available to the taxpayer in response to the notice; we will link to discussions of their rights and more detailed explanations of the various alternative resolution mechanisms. By building on the foundation of the Report’s nifty but basic roadmap diagrams, we will provide taxpayers with a truly valuable tool which will both educate them about their rights and help them find their way through the forests of tax administration.
Speaking of taxpayer rights, I’m proud to announce that registration is now open for the 4th International Conference on Taxpayer Rights. This year, the conference is back in the United States, held in Minneapolis, Minnesota, on May 23 and 24, and hosted by the University of Minnesota School of Law. The theme of this year’s conference is Taxpayer Rights in the Digital Age: Implications for Transparency, Certainty, and Privacy. You can see the full agenda and speaker roster for the conference here. In 2015, when I conceived of the International Conference on Taxpayer Rights, I hoped but hardly dared to dream that we would still be going strong four years later. But with the support of all sorts of folks, we have brought together an international community of scholars, government officials, and practitioners, all of whom care deeply about taxpayer rights. You can register for the conference here; I encourage you to do so early, because we tend to fill up our slots quickly! We have posted full videos and papers from the past conferences on the conference’s website here.
One last item about the Annual Report. By the very nature of the Report, we tend to work on issues that are very complex or about which the IRS does not agree with us regarding the path to resolution. Thus, it can take many years for one of our recommendations to be adopted. And sometimes our administrative recommendations find an audience in quarters outside of the IRS. I was pleased to see that happen this week, when the Ninth Circuit Court of Appeals in J.B.; P.B.; v United States of America held that the IRS failed to meet the IRC § 7602(c)(1) advance notification requirement for third party contacts by including boiler plate language in Publication 1. I objected to this IRS stance when they first implemented it, and we identified it as a Most Serious Problem in the 2015 Annual Report to Congress as well as an Area of Focus in the Fiscal Year 2018 Objectives Report to Congress. (We’ve also blogged about it here.) It is gratifying to see the Court’s opinion cite to both of these discussions.
So. It’s been a busy few weeks. Please check out the Annual Report, including our roadmaps, and take a look at the agenda for the 4th International Conference on Taxpayer Rights. In upcoming blogs, we will dive more deeply into the topics covered in the Report, and provide more updates on the Conference.
It’s good to be back!
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.
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