Taxpayer Advocate Service News
  1. NTA Blog: Inadequate Training of IRS Employees Harms Taxpayers, Creates IRS Rework, and Erodes IRS Employee Morale

    Subscribe to the NTA’s Blog and receive updates on the latest blog posts from National Taxpayer Advocate Nina E. Olson. Additional blogs from the National Taxpayer Advocate can be found at www.taxpayeradvocate.irs.gov/blog.

    As part of my recently released Annual Report to Congress, I identified IRS employee training as one of the Most Serious Problems facing taxpayers.  It may seem counterintuitive that an internal issue such as training could be a most serious problem for taxpayers; however, if the IRS does not properly train its employees, taxpayers will feel the negative consequences of that failure.  I previously identified IRS employee training as a Most Serious Problem in my 2013 Annual Report to Congress.  Since 2013 I have continued to hear concerns from taxpayers and practitioners about receiving incorrect answers from the IRS and complaints about employees not being able to assist if the issue presented goes beyond the scope of the script that an employee has available for that tax topic.  As a result, I decided to review the state of training four years later and found a grim situation.

    The Taxpayer Advocate Service (TAS) found that while the IRS has actually increased the training budget since a low point of nearly $23 million in fiscal year (FY) 2013, cuts to spending on training far outpace cuts to the overall IRS budget.  In non-inflation adjusted dollars, the IRS budget has been cut by just under $300 million dollars, or about 2.5 percent, since FY 2009, while the training budget has declined by nearly 75 percent.  In FY 2017 the IRS spent only $489 per employee on training, or almost $1,000 fewer when compared to $1,450 per employee spent in FY 2009.   

    When I took a closer look at how the IRS was spending training funds, I found that it did not devote any discernable resources to the Wage and Investment (W&I) division training.  W&I is the largest IRS operating division, with nearly 35,000 employees, or 43 percent of the IRS workforce, but it spent only $87 per employee on training in FY 2017.  Even more concerning is that the IRS spent $1 million fewer on training W&I employees in FY 2017 than it did at the low point of overall training spending in FY 2013.

    Consider what W&I employees do at the IRS – if a taxpayer calls or visits the IRS, he or she is most likely going to interact with a W&I employee.  W&I employees staff the Taxpayer Assistance Centers and answer the majority of calls to the IRS Toll-Free line.  In essence, W&I employees are the face of the IRS, yet the IRS is spending a de minimus amount of $87 per employee to train them.  Taxpayers and practitioners rely on these employees to receive a correct answer when they call or visit the IRS.  Whether it be an account-related issue or a tax law question, an abatement of a penalty for reasonable cause or a streamlined installment agreement, IRS employees need to be adequately trained to effectively administer the internal revenue laws. Failing to provide adequate and robust training to these customer-facing employees harms voluntary compliance and undermines taxpayers’ rights to be informed and to quality service.  Such an approach to training also negatively impacts employee morale by failing to provide employees with the tools they need to do their jobs.

    To compare the FY 2013 training to the FY 2017, I had my staff research the same key job series for FY 2017 that I identified in FY 2013 – tax examining technicians, revenue agents, revenue officers, customer service specialists, bankruptcy specialists, and tax analysts in each IRS operating division. We found that training among the same series in different operating divisions varies wildly.  For example, tax examining technicians in the Tax Exempt and Government Entities (TE/GE) division received only 19 hours of training per employee in FY 17, while those employees in W&I received 65 hours.  The IRS-wide position description for the Tax Examining Technician details that these employees must possess extensive knowledge of individual and business tax law, forms, regulations, collection techniques, notices, and many other IRS documents.  After you back out the required mandatory briefings all employees must take, the TE/GE employees received just 14 hours of substantive training per employee in FY 17.  That’s not even two full work days of training all year.  It seems far-fetched that employees could receive training on updates to the tax law, refresher courses, and training on processes and procedures in only 14 hours a year.

    I also remain concerned about the continued decrease in face-to-face training in key job series.  In FY 2013, the IRS cut almost all in-person training.  However, hours of in-person training decreased further in FY 2017 in some of the key job series we identified.  For example, Small Business/Self Employed (SB/SE) Revenue agents received 36 hours of in-person training in FY 2013, while in FY 2017 they received only 21 hours of in-person training.  Similarly, TE/GE Revenue Agents received nearly 27 hours of in-person training in FY 2013 while they received less than seven hours of in-person training in FY 2017.

    While I understand that in-person training can be costly, there are many effective methods of delivering in-person training that can reduce costs.  In-person training provides opportunities for employees to solve problems, exchange ideas, and learn from each other.  It also helps instructors identify areas in the training that need clarification or further development.  TAS employs many strategies to deliver in-person training.  For example, at last year’s Congressional Affairs Program conference for Local Taxpayer Advocates (LTAs), TAS delivered “train the trainer” training to the LTAs.  This training focused on effective communication with taxpayers and interview techniques.  The LTAs took this training back to their offices to train other employees in these critical skills. 

    Further, TAS makes use of outside experts in developing and deploying training.  Over the course of the last year, TAS delivered training on the Most Litigated Tax Issues from the 2016 Annual Report to Congress.  The training involved videos of the National Taxpayer Advocate, a practitioner from a Low Income Taxpayer Clinic, and a TAS attorney advisor discussing the underlying law as well as cases decided under that provision during the past year.  At points in the training, the taped program was paused for facilitated group discussions, allowing TAS employees in their local offices to discuss face-to-face the facts provided and reach a conclusion about the case, promoting collaboration and discussion.

    I am concerned about the downstream consequences of failing to adequately and appropriately train employees. When taxpayers receive an incorrect answer, it erodes trust in the IRS and leads to rework for the IRS or additional cases coming to TAS to get the right answer for the taxpayer.  In light of the recent tax code legislation, employees will need training on the changes to the tax code quickly to be prepared for the inquiries that are sure to come from taxpayers and practitioners as they attempt to figure out how the changes impact their tax situations. Given the dollars the IRS is currently spending on training and the hours devoted to training per employee, it is hard to imagine how the IRS will effectively deliver training on the new legislation.

    You can read more about my concerns about the state of IRS employee training and my recommendations to help address the issues in the Most Serious Problem: Employee Training: Changes to and Reductions in Employee Training Hinder the IRS’s Ability to Provide Top Quality Service to Taxpayers.

    The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate is appointed by the Secretary of the Treasury and reports to the Commissioner of Internal Revenue. However, 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.

  2. NTA Blog: Nonresident Aliens Still Facing Hardships In Obtaining Refunds of Withheld Tax

    Nonresident Aliens’ Ability to Receive Credit for Certain Taxes Withheld at Source Continues to Be Jeopardized

    Subscribe to the NTA’s Blog and receive updates on the latest blog posts from National Taxpayer Advocate Nina E. Olson. Additional blogs from the National Taxpayer Advocate can be found at www.taxpayeradvocate.irs.gov/blog.

    Imagine how you would feel if you were expecting your tax refund to arrive imminently, and checked the mailbox or your bank account day after day, only to be disappointed. Finally, you receive the hoped-for letter from the IRS, which you open eagerly. Disappointed to find no refund check enclosed, you read a letter that in part says, “We're holding the portion of your refund that relates to the withholding credit you claimed…while we review it. Our review can take up to 6 months from the date we received your return or the due date of the return, whichever is later.”

    In dismay, you begin the long wait. Eventually, you receive the letter you have been looking for, again minus a refund check. This time, the accompanying letter in essence says that your refund is being withheld because the specified information provided on your return does not match the information provided to the IRS by your withholding agent. The letter goes on to explain that unless you made the error and can correct it on an amended return, you must contact the withholding agent and have them remedy it on their end.

    It so happens that the error in question was made on an information report sent to the IRS by a third-party payroll processing company and it takes you a good deal of time and effort to figure out how to get in touch with the company, and then find someone to speak with about your issue. When you finally do so, you learn, to your frustration, that the company is not terribly interested in your situation, or in fixing the problem. The company gives you a number of explanations and excuses that, in the end, boil down to the message that they are simply not going to amend their information report.

    In disbelief at the entire situation, you contact the IRS and ask what to do next. Again, you come up against a brick wall and no progress is made toward resolution of the issue. Eventually, you come to understand that all you can do is contact my office, the Taxpayer Advocate Service, for assistance, go to the IRS Office of Appeals to present your case, or take the matter to court. Some of these approaches will cost money for representation and all of them will involve continued delay and uncertainty regarding whether you will ever recover the money that you earned and that was withheld from your paycheck on behalf of the IRS.

    Although this scenario sounds like an excerpt from a dystopian short story, it is precisely what thousands of nonresident aliens have been experiencing over the last few years. I have expressed deep concerns about this problem in several of my Annual Reports to Congress, but unfortunately it continues to exist. Although the number of taxpayers affected has been reduced because, as I suggested in my recommendations, the IRS has done a better job of limiting the population of tax credits being frozen, thousands of taxpayers per year are still subject to this fate.

    In January 2015, the IRS began freezing credits claimed on Forms 1040NR, U.S. Nonresident Alien Income Tax Return, associated with Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. The IRS did so based on concerns regarding potential fraud. Nevertheless, the IRS took this drastic measure without any comprehensive statistical data establishing the existence and nature of widespread fraud or noncompliance with respect to these credit claims. My own researchers have analyzed two different sets of data, both of which indicate that taxpayers seeking Form 1042-S credits are actually more compliant with their tax obligations than the overall group of Form 1040 taxpayers.

    Nevertheless, the freezes were implemented and the IRS’s Large Business & International operating division (LB&I) decided to develop its own semi-automated system for matching the Forms 1042-S issued by withholding agents against the data provided by taxpayers on their Forms 1040NR. LB&I did this even though the Wage & Investment division (W&I) had already developed an automated program that it uses to match Forms W-2, Wage and Tax Statement, and Forms 1099 against information provided on tax returns in the domestic context. Although the W&I system has its flaws, and could benefit from some fine tuning, LB&I spent millions of dollars starting from scratch in an attempt to create its own mechanism. Ultimately, that semi-automated matching tool failed to work effectively and chaos ensued. Over one hundred thousand taxpayers had their credits frozen and eventually LB&I had no choice but to discontinue use of the semi-automated matching tool. In June of 2016, the IRS made the decision to issue all refunds associated with the credits.

    Much of the outcry has diminished because the IRS is now more selective regarding the Form 1042-S freezes it imposes. Nevertheless, the same underlying problems still remain. LB&I continues to operate without any automated matching capacity and to undertake manual reviews of Forms 1042-S against taxpayers’ Forms 1040NR. While this manual review is slowly taking place, impacted taxpayers must sit and wait for their refunds to arrive, hoping that withholding agents did not make any errors, which may or may not be correctible later.

    TAS was invited to attend meetings of a cross-functional Form 1042-S verification team established to examine the program adopted by LB&I and to recommend procedural and systemic improvements. This team made some effective recommendations that helped resolve a number of real problems in this area. Further, participation in the team gave my office additional insight into the existing problems and a voice in the policy decisions being developed. Nevertheless, without any explanation to TAS, the Form 1042-S verification team simply stopped meeting several months ago. The team’s work did not seem to be finished—at least the existing problems have by no means been resolved—but, for some reason, this particular vehicle for progress is no longer operational.

    Likewise, the IRS Commissioner established an Executive Steering Committee (ESC) to oversee implementation of the Foreign Account Tax Compliance Act (FATCA). Among other things, the FATCA ESC considered issues associated with the Form 1042-S matching program and received regular updates on related problems and potential resolutions. This committee, in which TAS participated, recently was disbanded even though some FATCA-related issues and risks are still unresolved. Instead, they will now be addressed only in the normal course of business by the new FATCA Governance Board comprised of LB&I and IT executives. However, the Governance Board will operate without the benefit of oversight from the top IRS executives and the National Taxpayer Advocate. While there may have been legitimate reasons to end the FATCA ESC, I am concerned about the lack of urgency to find a solution for the problems that plague the Form 1042-S matching program and the taxpayers who are victimized by its failure to function smoothly.

    The shortcomings in the Form 1042-S matching program not only disproportionately disadvantage a highly compliant group of taxpayers, but waste scarce IRS resources. My office will continue to monitor issues in this area and advocate for affected taxpayers. You can read more about these issues in Most Serious Problem: The IRS’s Approach to Credit and Refund Claims of Nonresident Aliens Wastes Resources and Burdens Compliant Taxpayers in my 2017 Annual Report to Congress.

    The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate is appointed by the Secretary of the Treasury and reports to the Commissioner of Internal Revenue. However, 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.

  3. Success Story: TAS helps taxpayer validate eligibility for Earned Income Tax Credit

    Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This story is only one of many examples of how TAS helps resolve taxpayer issues. All personal details are removed to protect the privacy of the taxpayer.

    A taxpayer filed returns for three tax years as head of household and claimed the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) for two dependents. The taxpayer asked for Taxpayer Advocate Service (TAS) assistance after the IRS audited her returns and denied the claimed credits.

    The case advocate researched the taxpayer’s account and determined the taxpayer asked the IRS to reconsider her audit, but hadn’t heard anything from the IRS. The case advocate also discovered the EITC was denied because the taxpayer did not provide typical records the IRS usually accepts for proof of residency. The taxpayer had submitted a lease agreement to prove where she lived, along with a letter from her pastor. The taxpayer had custody of the children because their mother was a victim of domestic violence. TAS strongly recommended the IRS reconsider the documentation. Through excellent advocacy efforts, the IRS accepted the taxpayer’s documentation and issued refunds for each of the three tax years.  

    When working with the Taxpayer Advocate Service, each individual or business taxpayer is assigned to an advocate who listens to the problem and helps the taxpayer understand what needs to be done to resolve their tax issue. TAS advocates will do everything they can to help taxpayers and work with them every step of the way. Occasionally TAS features stories of taxpayers and advocates who work together to resolve complex tax issues. Read more TAS success stories.

    Learn about TAS eligibility

  4. Government Shutdown

    As of February 9, 2018, all Taxpayer Advocate Service offices have resumed normal operations.

    Please be aware that due to the lack of an approved federal budget, all Taxpayer Advocate Service offices across the country are closed. No staff will be available to assist you during this time.  Please check your local media for news about when our offices will reopen. We apologize for the inconvenience.

  5. TAS assistance offered at local Problem Solving Days

     

    The Taxpayer Advocate Service (TAS) will conduct Problem Solving Day events in communities throughout the country in the coming months and year. During these events, TAS employees from a local office will be available to assist taxpayers in person with tax problems they have not been able to resolve with the IRS. Generally, TAS can assist taxpayers whose problems with the IRS are causing financial difficulties, who’ve tried but haven’t been able to resolve their problems with the IRS, or believe an IRS system or procedure isn’t working as it should. And our service is free.

    Why is TAS holding Problem Solving Days?

    Congress created the Office of the National Taxpayer Advocate as we know it today through the IRS Restructuring and Reform Act of 1998 (RRA 98). The law further strengthened the role of TAS and provided for Local Taxpayer Advocates in each state. TAS maintains a geographic presence in each state, the District of Columbia, and Puerto Rico, and continues to look at changing taxpayer demographics to adjust its footprint to meet taxpayer needs. Recognizing the importance of personal contact, we work one-on-one with taxpayers and their representatives within our area to resolve their tax issues.

    As the IRS develops its “Future State” plan that focuses on assisting taxpayers digitally rather than in person, the National Taxpayer Advocate continues to elevate her concerns about the plan through her Reports to Congress. Ms. Olson conducted twelve public forums in 2016 to hear from taxpayers throughout the country on their needs and preferences when dealing with the IRS. A consistent concern raised during the forums was IRS’s continuing trend away from person-to-person and face-to-face taxpayer service and compli­ance activities, including audit, collection, and appeals, as well as a declining geographic IRS presence and increased centralization. The National Taxpayer Advocate included her findings in her 2016 Annual Report to Congress Special Focus which discussed her vision for a taxpayer-centric 21st century tax administration.

    We are Your Voice at the IRS. Look for a Problem Solving Day event in your community from the list below. Otherwise, you can contact your local TAS office by visiting www.TaxpayerAdvocate.irs.gov/contact-us.

    Upcoming Problem Solving Day Events:

    Past Problem Solving Day Events: