The Internal Revenue Restructuring and Reform Act of 1998 (RRA 98) required the IRS to replace its geographic-based structure with organizational units serving groups of taxpayers with similar needs. In doing so, however, service reductions at Taxpayer Assistance Centers (TACs), centralization of examination and collection functions and the drop in tax attaché posts in foreign cities from 15 to three were some of the negative effects of this change. While the new taxpayer-based structure has some benefits, the elimination of a functional geographic presence, with IRS employees who understand the needs and circumstances of a specific geographic economy, may harm taxpayers and erode compliance.
Failure to maintain a local presence infringes upon the taxpayer’s right to quality service, which means the taxpayer has the right to receive clear and easily understandable communications from the IRS. It also infringes upon the taxpayer’s right to a fair and just tax system, because the taxpayer has the right to expect the system to consider facts and circumstances that might affect their tax liabilities, ability to pay, or ability to provide information timely.
The IRS can retain its national policy-making structure without losing the ability to respond to local conditions and challenges. The 1998 legislation did not require the IRS to eliminate its local presence, only to reorganize in a different model.
To remedy the problems caused by a lack of local presence, the National Taxpayer Advocate recommends that the IRS introduce video-conferencing to allow a virtual remote office audit or office collection visit, and modify processing so that once the taxpayer has responded to an IRS contact, the case is assigned to one employee for the duration of the case. She also recommends that the IRS place at least one Appeals Officer and one Settlement Officer in every state, the District of Columbia, and Puerto Rico, place local Outreach and Education employees in every state; and provide face-to face service through the use of mobile vans in each state.