On January 30, 2025, Senators Mike Crapo, Chairman of the Senate Finance Committee, and Ron Wyden, the Committee’s ranking member, jointly introduced a discussion draft of the Taxpayer Assistance and Service (“TAS”) Act. This proposed legislation represents a comprehensive effort to enhance U.S. tax administration. Of its 68 provisions, about 40 align with recommendations I’ve advocated for in my recent Annual Reports to Congress and Purple Book of Legislative Recommendations.

Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This success story is only one of many examples of how TAS helps resolve taxpayer issues.

A taxpayer contacted the IRS to resolve a balance due that exceeded $150,000, which required the taxpayer establish a short-term payment plan. However, the IRS assistor didn’t finalize the agreement on the taxpayer’s account, resulting in the taxpayer’s bank account being levied with over $20,000 being attached.

On May 5, 2023, the U.S. Tax Court released Administrative Order 2023-02, announcing changes to the Tax Court’s electronic filing and case management system that will protect taxpayers’ right to be informed. Beginning August 1, 2023, the Tax Court’s electronic filing and case management system will make all newly filed post trial briefs filed by government and non-government practitioners admitted to practice before the Tax Court and all newly filed amicus briefs filed pursuant to Rule 151.1 of the Tax Court Rules of Practice and Procedure in non-sealed cases available to the public remotely. This is a welcome step forward. With limited exceptions, all non-sealed documents are “public records open to the inspection of the public,” pursuant to IRC § 7461, and maintaining easy access to those public records is important for tax practitioners as well as non-practitioners. The Administrative Order limited the posting of briefs to those filed by “practitioners admitted to practice before the Court.”  In fiscal year 2022, taxpayers petitioned the Tax Court without a practitioner representing them in about 90 percent of cases so that will limit the number of petitioner briefs available for electronic viewing. But this should not limit the number of briefs filed by the government as its attorneys are admitted to practice before the Tax Court.

Your tax return may show you’re due a refund from the IRS. However, if you owe a federal tax debt from a prior tax year, the IRS may keep (offset) some or all your tax refund to pay your debt. The CP49 notice is mailed to taxpayers to notify them that the IRS used all or part of their refund to pay a federal tax debt owed.  

The IRS agreed to return of levy. A taxpayer contacted TAS because the IRS had been levying their Social Security benefits for payment of an outstanding tax liability. The taxpayer was facing an economic hardship and needed the Social Security income for their necessary living expenses. 

The assigned case advocate determined that because of the taxpayer’s financial hardship, the IRS should release the levy. The case advocate developed a persuasive recommendation to not only release the levy but to suspend collection on the account and issue a refund for the last two years’ levy payments, the maximum allowed by law. 

The IRS agreed to release the levy, report the account as currently not collectible, and refund the last two years’ levy payments to alleviate the taxpayer’s financial hardship. 

In this case, TAS advocated to protect the taxpayer’s rights to challenge the IRS’s position and be heard and to a fair and just tax system. Read more about Taxpayer Rights. 

Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This success story is only one of many examples of how TAS helps resolve taxpayer issues.

A certified public accountant (CPA) filed an amended Form 1041, U.S. Income Tax Return for Estates and Trusts, on behalf of their client. The executor of the estate was unable to distribute the estate’s assets to the beneficiaries and close the estate until the amended return was accepted by the IRS and processed. After waiting more than 20 weeks, the CPA requested a transcript to determine the status of the claim. Since the CPA’s Form 2848, Power of Attorney and Declaration of Representative, hadn’t been processed, the IRS rejected his request. That’s when the CPA contacted TAS for assistance.

Reducing your tax liability may be tempting; however, many social media schemes are illegal and can lead to serious consequences. 

Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This success story is only one of many examples of how TAS helps resolve taxpayer issues.

A taxpayer filed an offer in compromise (OIC) because they were unable to pay their IRS debts. They included the required processing fee, which the IRS applied to the outstanding balance, and the application fee. The OIC was rejected, but the payment was not returned.

Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This success story is only one of many examples of how TAS helps resolve taxpayer issues.

A business’s authorized representative contacted TAS for assistance with a notice of federal tax lien (NFTL). The business filed some amended returns with the IRS to eliminate the tax liability on which the NFTL was filed, and needed the lien released before the end of the year so they could sell some property. TAS immediately began working with the authorized representative and the IRS to get the amended returns considered, using effective communication and negotiation skills with both the authorized representative and the IRS throughout the process.

TAS successfully negotiated with the IRS to have the amended returns accepted and the lien released in time for the taxpayer to move forward with the sale.

Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This success story is only one of many examples of how TAS helps resolve taxpayer issues.

A taxpayer who became disabled after working as a first responder contacted TAS for help after the IRS denied the taxpayer’s claim for refund. The taxpayer had filed Form 1040-X, Amended U.S. Individual Income Tax Return, to properly report their pension income as non-taxable. Upon receipt of the taxpayer’s inquiry, TAS asked the IRS to reconsider the taxpayer’s claim and provided documentation that the pension income was not taxable. However, the IRS again denied the claim. TAS continued to advocate in the best interest of the taxpayer by explaining their appeal rights and encouraging them to request an appeal. Empowered by TAS, the taxpayer filed an appeal, and the Independent Office of Appeals overturned the IRS’s decision and removed the non-taxable pension from income.

Did you know that if you’re an eligible educator, you can deduct up to $300 of unreimbursed business expenses? And if you and your spouse are both teachers and file jointly, that number goes up to $600.

In addition, filers of tax year 2019 information returns (other than IIRs) filed on or before August 3, 2020, will have any portion of an information return penalty that is the result of late filing abated. Information reporting penalties assessed for reasons other than lateness, such as incorrect information or non-compliance with e-file requirements, will not be waived. For tax year 2020 information returns (other than IIRs), the same relief applies to returns filed on or before August 2, 2021.

When a taxpayer requests a Collection Due Process (CDP) hearing, they may want to argue that they do not owe the tax the IRS is trying to collect. Sometimes the law allows them to raise that issue, but it does not if the taxpayer has already received a notice of deficiency or otherwise had an opportunity to challenge the underlying liability, including through the Independent Office of Appeals (Appeals). When taxpayers are allowed to challenge the underlying liability in CDP, it is natural to expect a decision on the merits, either at the Appeals CDP hearing or if necessary from the Tax Court. But after the Supreme Court’s decision in Commissioner v. Zuch, that expectation no longer holds. Under Zuch, a taxpayer can do everything the statute requires and still leave court without a judicial determination as to what they owe. Such a result violates a taxpayer’s rights to pay no more than the correct amount of tax and to challenge the IRS’s position and be heard.

TAS is happy to report that the IRS has issued guidance on these special state tax payments. The guidance is complex. Because the taxability of these state payments varies depending on the type of payment and your state of residence, TAS urges you to carefully review the IRS-issued guidance