Each filing season, tens of thousands of taxpayers experience the unfortunate circumstance of having their refunds stolen by bad actors. Some thieves divert taxpayer refunds into their own bank accounts, while others physically steal taxpayer’s paper checks from the mail. As if this wasn’t frustrating enough, the IRS’s process for resolving this issue can be slow and cumbersome, with taxpayers often waiting months to receive their replacement checks. The Treasury Department’s Bureau of the Fiscal Service (BFS) may have to issue the replacement check in paper format. Reissuing a refund via a paper check increases the risk of it being stolen again, which revictimizes the taxpayer and results in an additional burden on the government.

Proposed regulations permitting the IRS to shorten third-party notice requirements in certain circumstances erode important taxpayer protections and could result in a taxpayers bearing the consequences for IRS-caused delays.

The IRS Restructuring and Reform Act of 1998 (RRA 98) instituted major reforms to IRS tax administration. RRA 98 included new provisions providing added taxpayer protections in circumstances where the IRS intends to contact a person other than the taxpayer (a third-party) to obtain information that will assist the IRS in assessing or collecting a tax (IRC § 7602(c)). RRA 98 provided that prior to contacting a third-party, the IRS must provide taxpayers with “reasonable notice” of the contact.

Many taxpayers experience difficulties with correspondence audits. Once a return is selected for examination, the IRS notifies the taxpayer by letter and, as the name implies, conducts the audit via correspondence. Correspondence audit letters fail to provide a point of contact – the taxpayer is not given a direct phone number or the name of an IRS employee to contact. Instead, the letter provides a phone number for all correspondence audits. If no response to the initial contact letter is received, the IRS generally makes no effort to contact the taxpayer before proposing adjustments, issuing a Statutory Notice of Deficiency, and closing the case. Taxpayers wishing to speak with someone regarding an audit are limited to calling a representative on a toll-free line. The correspondence audit process is meant to create efficiency; however, these audits can present a host of challenges for our nation’s most vulnerable taxpayers and have downstream consequences for taxpayers and the IRS, as discussed in my 2021 Annual Report to Congress, Low-Income Taxpayers Encounter Communication Barriers That Hinder Audit Resolution, Leading to Increased Burdens and Downstream Consequences for Taxpayers, the IRS, TAS, and the Tax Court.

The form 12153 is used to request a Collection Due Process (CDP) hearing within 30 days of receiving the notice, or an Equivalent Hearing within 1 year of the notice.

Identity theft is a constant threat that can happen to anyone. As the saying goes: an ounce of prevention is worth a pound of cure. With the annual filing season beginning this week, it is a good time to highlight resources available to help mitigate the potential of becoming a tax-related identity theft victim. Generally, the Federal Trade Commission (FTC) is the federal agency tasked with identity theft prevention, reporting, and recovery. The FTC annually holds Identity Theft Awareness Week, and its 2025 iteration is underway this week. For additional tax-related identity theft information, the Security Summit, a public-private partnership working to protect against identity theft fraud in taxation, recently held its ninth annual National Tax Security Awareness Week.

National Taxpayer Advocate delivers 2023 Annual Report to Congress. his year’s report focuses on the taxpayer impact of processing delays.  

National Taxpayer Advocate delivers 2022 Annual Report to Congress.The report assesses taxpayer service challenges in 2022 and the outlook for 2023.

As the U.S. population ages, taxpayers and their representatives are increasingly confronted with the question of how to appoint a power of attorney (POA) to act on behalf of taxpayers in the event of incompetence or incapacity. When taxpayers are competent, they use a Form 2848, Power of Attorney and Declaration of Representative, for this purpose. However, an incompetent or incapacitated taxpayer is in no position to execute a Form 2848. Likewise, even a preexisting Form 2848 is usually voided if taxpayers become incompetent or incapacitated. In other contexts, individuals typically rely on various types of POA instruments to enable representation, but the IRS often will not recognize these for tax purposes. Thus, in the event of unforeseen circumstances, taxpayers can find themselves without a voice in their own tax matters beyond that of a court-appointed fiduciary.

After several decades of working in the tax controversy arena, both in the private sector and with the Office of Chief Counsel, I am amazed at how many people have never heard of or availed themselves of the benefits that the Taxpayer Advocate Service (TAS) provides for taxpayers. Everyone has heard of the IRS but oftentimes when I tell people I am the National Taxpayer Advocate and lead TAS I need to explain my position and what we do.