Taxpayer Advocate Service News
  1. NTA Blog: Volume 2 of NTA Objectives Report Features IRS Responses to Most Serious Problems

    Subscribe to the NTA’s Blog and receive updates on the latest blog posts from Acting National Taxpayer Advocate Bridget T. Roberts. Additional blogs can be found at www.taxpayeradvocate.irs.gov/blog.


    Each December, the National Taxpayer Advocate identifies the Most Serious Problems facing taxpayers and makes recommendations for addressing them in the Annual Report to Congress (ARC). Each June, the National Taxpayer Advocate submits the Objectives Report to Congress, which includes a second volume that contains the IRS’s responses to our recommendations together with our analysis of the IRS’s responses.

    As the Acting National Taxpayer Advocate, I believe it is important for taxpayers, tax practitioners, and Members of Congress to see how the IRS responded, and I will highlight a few examples of its responses and related analysis.

    • Most Serious Problem 1 - Tax Law Questions: The IRS has agreed to study the feasibility of returning to its previous practice of answering in-scope tax law questions year-round on the phones.
    • Most Serious Problem 2 - Chief Counsel Transparency: IRS Counsel has agreed to clarify the standards that should be considered when deciding whether legal advice should be issued in a formal memorandum.
    • Most Serious Problem 4 -  Free File: The IRS has agreed to make numerous improvements to the Free File program, including evaluating ways to expand the program for English as second language taxpayers.
    • Most Serious Problem 5 - False Positive Rate: The IRS has agreed to take steps to evaluate the effectiveness of its fraud detection systems (and their associated high false positive rates) and to collaborate with TAS on a study analyzing why some taxpayers delay responding to IRS identity-authentication notices.
    • Most Serious Problem 9 - Field Examination and Most Serious Problem 10 – Office Examination: For these two problems, the IRS continues to disagree that it needs to more carefully track what happens after an audit, including whether the taxpayer appeals and maintains future compliance, to better refine its audit selection process and maximize limited resources.
    • Most Serious Problem 11 - Post Processing Math Error and Most Serious Problem 12 – Math Error Notices: The IRS has declined to adopt a policy to limit its use of math error authority to circumstances least likely to burden taxpayers or waste IRS resources. While it did agree to implement some of TAS’s recommended changes to improve math error notice clarity, the IRS has not adopted TAS’s recommendations to improve the efficiency of math errors and protect taxpayer rights.
    • Most Serious Problem 13 - Statutory Notices of Deficiency: The IRS has agreed to include specific TAS office information in statutory notices of deficiency.
    • Most Serious Problem 15 - Economic Hardship: While the IRS has implemented certain safeguards for taxpayers experiencing economic hardship, it has not agreed to implement a systemic economic hardship indicator that would identify taxpayers who have incomes lower than their allowable living expenses and no detectable assets. We recommended the IRS implement an economic hardship indicator to help ensure it doesn’t collect from low income taxpayers under circumstances that would leave them without adequate means to provide for their basic living expenses.

    For those interested in more detail on the IRS’s full responses to all 20 Most Serious Problems identified in our Annual Report to Congress, I encourage you to read this year’s Volume 2 included in our Fiscal Year 2020 Objectives Report to Congress.

    The views expressed in this blog are solely those of the Acting National Taxpayer Advocate. The Acting 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. Success Story: TAS's advocacy helps taxpayer get refund using wire deposit to a foreign bank account

    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’s tax issues. All personal details are removed to protect the taxpayer’s privacy.

    The mission of TAS is to help taxpayers resolve problems with the IRS and recommend changes to prevent the problems. When constituents contact their congressional office for help with tax matter, TAS works closely with the congressional staff member to assist in the resolution.
     
    In this case, the taxpayer was living overseas where their foreign bank had changed its policy for cashing checks, and consequently the taxpayer could not cash his IRS refund check. The taxpayer returned the refund check to the IRS but wasn’t successful in getting it reissued as a direct deposit. The taxpayer then contacted his congressional office for help.
     
    The taxpayer’s congressional representative contacted TAS for assistance in getting the taxpayer’s tax refund reissued to a bank account. The case advocate quickly determined that the usual method for reissuing a check as a direct deposit wouldn’t work because the foreign bank and routing account numbers weren’t universal – but the case advocate did not give up. The case advocate began an extensive research and investigative process and determined that an alternative approach of a wire deposit could be used in this situation. It took just one day after discovering this process for the taxpayer to successfully receive the refund in his bank account.

    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 more about whether TAS can help you: TAS eligibility.

  3. Alert: Planning to travel outside of the U.S. this year? Don’t risk a passport revocation - arrange to settle large IRS debts now

    The Internal Revenue Service is urging taxpayers to resolve their significant tax debts, $50,000 or more, to avoid putting their passports in jeopardy. If you owe $50,000 or more and haven’t made payment arrangements, please contact the IRS now to avoid travel delays later.

    Why is the State Department allowed to limit or revoke my passport due to unpaid taxes?


    In December 2015, Congress passed the Fixing America’s Surface Transportation (FAST) Act. That act authorized the IRS to certify to the State Department taxpayers who owe a seriously delinquent tax debt. A seriously delinquent tax debt is an unpaid, legally enforceable federal tax debt totaling more than $50,000 (Please note that this amount is adjusted annually for inflation.) for which a notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted, or a levy has been issued. The IRS began certifying these debts to the State Department in 2018. Under the law, the State Department must deny your passport application and may revoke or limit your passport if the IRS has certified you as having a seriously delinquent tax debt. A seriously delinquent tax debt does not include non-tax debts collected by the IRS, such as the FBAR penalty and child support.

    When will my seriously delinquent tax debt be certified to the State Department?


    The IRS already began certifying certain taxpayers in phases and will continue certifying all seriously delinquent individual taxpayer accounts. The IRS will send a Notice CP 508C to your last known address at the time it certifies your seriously delinquent tax debt to the State Department.

    There are some exceptions from passport certification; see more on denying, revoking passports because of tax debt for a list of those special circumstances. For taxpayers serving in a combat zone and who have a seriously delinquent tax debt, the IRS will postpone certifying their tax debt to the State Department while they remain performing such service.

    In addition, taxpayers who have open cases with the Taxpayer Advocate Service will now temporarily be excepted thanks to TAS’s past advocacy efforts.

    How will I know if I’m at risk of revocation?


    Before contacting the State Department about revoking your passport, the IRS will send you a Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to let you know what it intends to do and give you another opportunity to resolve the debt before it takes that action.

    What should I do if I receive an IRS Notice or Letter about passport revocation?


    Don’t delay! Call the IRS immediately or at least within 30 days from the date of the letter. There will be a special telephone number to call listed on the notice or see the IRS Contact information below. Generally, the IRS won’t recommend revoking your passport if you’re making a good-faith attempt to resolve the tax debts. However, some payment resolutions take longer than others, so don’t take a risk by waiting.
    If you believe you have been a victim of identity theft which has resulted in your receiving Letter 6152 or other IRS notice concerning your tax debt, use the resources available at Identity Protection: Prevention, Detection and Victim Assistance to correct your account.

    What if I’ve already been certified and my travel plans are in jeopardy?


    The IRS has an expedited decertification procedure for taxpayers who live abroad or have plans to travel within 45 days.

    If you’re leaving soon for international travel, need to resolve passport issues and have a pending application for a U.S. passport, you should call the phone number listed on top right-hand corner of your Notice CP 508C.

    If your passport is cancelled or revoked after you’re certified, you must resolve the tax debt by paying the debt in full, making alternative payment arrangements or showing that the certification was erroneous.

    The IRS will reverse your certification within 30 days of the date you resolve the tax debt and provide notification to the State Department as soon as practicable.

    However, if you’re unable to resolve your balance with the IRS or your passport issue, the Taxpayer Advocate Service may be able to help.

    TAS References and Resources

    IRS Resources:

  4. NTA Blog: IRS Agrees to Temporary Exclusion from the Passport Certification Program for TAS Cases

    Subscribe to the NTA’s Blog and receive updates on the latest blog posts from Acting National Taxpayer Advocate Bridget T. Roberts. Additional blogs can be found at www.taxpayeradvocate.irs.gov/blog.

    In my first blog as the Acting National Taxpayer Advocate, I’d like to address a topic that has been in the news a good deal over the past year—“passport certification.”  Under section 32101 of the FAST Act, if the IRS “certifies” a taxpayer as having a “seriously delinquent tax debt” (currently more than $52,000 and meeting certain other requirements under Internal Revenue Code (IRC) § 7345(b)), the Department of State must deny the taxpayer’s passport application (original or renewal) and may revoke or limit an existing passport.

    Previous National Taxpayer Advocate blogs have discussed aspects of the passport certification program, including the lack of a stand-alone notice issued to taxpayers before the IRS certifies their debtsand the IRS’s refusal to hold off on certifications while taxpayers are working with TAS to resolve their liabilities.

    In today’s blog, I have some good news to report. The IRS recently agreed to temporarily exclude taxpayers with open TAS cases from passport certification and to reverse certifications for TAS taxpayers who were certified before coming to TAS. Although not permanent at this time, this change is a step in the right direction that protects taxpayers who are working with TAS to resolve their liabilities from the severe consequences of passport denials and revocations. 

    TAS has long advocated for the IRS to exclude from certification taxpayers who came to TAS and were actively working with us prior to being certified. Without the exclusion from certification for open TAS cases, taxpayers could not take full advantage of TAS’s services. To cite a few examples, taxpayers who believed they did not owe a liability and were working with TAS to challenge a substitute for return, who sought penalty abatement based on reasonable cause, or who pursued an audit reconsideration, all may have felt pressured into agreeing to a payment plan that was unaffordable or based on an incorrect liability determination solely to avoid passport certification. Under the IRS’s temporary policy change, taxpayers can now present their cases and have them fully considered before losing their passport rights, thus protecting their right to a fair and just tax system, a right included in the Taxpayer Bill of Rights in IRC § 7803(a)(3).

    I should note that if a taxpayer opens a case with TAS and doesn’t work with us in good faith to address the tax liability, we will close the case and the IRS can then certify the taxpayer and recommend passport revocation at that time.

    We hope the IRS will make the exclusion of TAS cases permanent. In addition, TAS has concerns about two other aspects of the passport program’s implementation that we’re urging the IRS to address. First, the IRS recently implemented a program under which it is recommending the State Department revoke existing passports in certain cases, but its standards for deciding which taxpayers to recommend for passport revocation, as prescribed in the Internal Revenue Manual, are so vague that its decisions will risk looking arbitrary and capricious. Second, IRS technology limitations apparently are preventing the agency from sending passport certification notices, decertification notices, and revocation notices to taxpayer representatives.

    In the coming months, I am hopeful we can work together with the IRS to come up with improved procedures on each of these issues that fairly balance the revenue collection objective of the passport certification statute with the protection of taxpayer rights, so that taxpayers willing to address their tax liabilities are able to do so with minimal impact on their ability to travel. That, after all, is what Congress wanted when it enacted the passport certification provision into law four years ago.

    The views expressed in this blog are solely those of the Acting National Taxpayer Advocate. The Acting 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.

  5. TAS Tax Tip: It’s Time to Check Your Tax Withholding

    The Internal Revenue Service recently launched the new Tax Withholding Estimator, an expanded, mobile-friendly online tool designed to make it easier to have the right amount of tax withheld during the year.

    The new Estimator features include:

    • plain language to improve comprehension;
    • ability to move back and forth through the steps and correct previous entries and skip questions that don’t apply;
    • tips and links to help users quickly determine if they qualify for various tax credits and deductions;
    • automatic calculation of the taxable portion of any Social Security benefits;
    • and much more…

    In addition, the Tax Withholding Estimator tool makes it easier to enter wages and withholding for more than one job held by each taxpayer, their spouse, as well as separately entering pensions and other sources of income. At the end of the process, it provides specific withholding recommendations for each job and each spouse and clearly explains what to do next.

    Why check it at all?


    The Tax Cuts and Jobs Act created a lot of changes for 2018 and for this year too. One change directly affects the rate at which taxes are withheld from paychecks for last year and again for this year, generally reducing the amount taken out. This change, combined with the other changes, may reduce the amount of an expected refund or may even cause an amount to be owed. But if you check now, you can make any adjustments needed before tax time.

    Who should check and when?


    It is a good practice for everyone to do a paycheck check-up every year. The earlier in the year that you do, the more accurate you can be when it comes time to file your tax return next year. Whether you did this already or not, it is a good idea to take the few minutes it takes to use the tool – to double check that you won’t be overpaying, or worse, underpaying and end up owing taxes. Checking now allows for several months still to catch-up if the results show you may owe. Keep in mind that the results will only be as accurate as the information you provide.

    This tool works for most taxpayers, however, people with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe self-employment tax, alternative minimum tax, the tax on unearned income of dependents or certain other taxes, and people with long-term capital gains or qualified dividends.

    Plan ahead before trying the Tax Withholding Estimator


    Before using this tool, you’ll need to have your latest paycheck handy, and it may help to have last year’s tax return to estimate income from investments or a side job.

    What if I don’t have enough withholding or none?


    If you think you need to make changes to the amount withheld, the tool gives you the information you need to fill out a new Form W–4, Employee’s Withholding Allowance Certificate. Because this form tells your employer how much you want them to withhold, submit the completed W-4 to your employer as soon as possible to make the changes.

    Since our federal income tax is a pay-as-you-go tax system, there are two ways to pay as you go, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, if you don’t have any at all, or if you receive income such as interest, dividends, self-employment income, capital gains, prizes and awards, or other income, you may have to make estimated tax payments. Also, if you are in business for yourself, you might need to make estimated tax payments.

    What about next year?


    The IRS recommends that you also recheck your withholding at the start of 2020. This is especially important if you reduce your withholding sometime during 2019. A mid-year withholding change in 2019 may have a different full-year impact in 2020.

    For More Resources and Information: