Taxpayer Advocate Service News
  1. Advocate Releases EITC Special Report, Taxpayer Journey Roadmap

    National Taxpayer Advocate Nina E. Olson today released a special report on the Earned Income Tax Credit (EITC), a call to action, with recommendations designed to increase the participation rate of eligible taxpayers and reduce overclaims by ineligible taxpayers. Also today, for the first time ever, the Taxpayer Advocate Service (TAS) has mapped out the modern United States tax system.

    TAS Releases Detailed “Subway Map” Illustrating a Taxpayer’s Journey Through the Tax System
    TAS is releasing a “subway map” that visually demonstrates, at a very high level, the stages of a taxpayer’s journey through the tax system – from getting answers to tax law questions through audits, appeals, collection and litigation. The map makes clear the complexity of tax administration, with its many connections, overlaps, and repetitions between stages. Notably, it shows why the road to tax compliance isn’t always easy to navigate.

    The National Taxpayer Advocate’s 2018 Annual Report to Congress included a series of “roadmaps” depicting a taxpayer’s “journey” through the tax system. The subway map expands on the earlier roadmaps by providing a visually clear depiction of the taxpayer’s journey. The subway map is now available to view online and will be available in hard copy as a print map next month. To place an order, call 800-829-3676 beginning July 12 and request Publication 5341.

    “Anyone looking at this map will understand that we have an incredibly complex tax system that is almost impossible for the average taxpayer to navigate,” Olson said.

    View a video introduction to the subway map.

    TAS will be working to develop a fully interactive version of the subway map in the coming year. When the interactive map is completed, a taxpayer or representative will be able to enter into it at any step and learn more about that step and the surrounding steps. TAS envisions that a taxpayer or representative will be able to input the number of an IRS letter or notice and generate a pop-up window that provides key relevant information, including where in the process the taxpayer is and what the next steps will be.

    “This digital roadmap will be the culmination of many years of work and research by TAS into human cognition and learning, notice clarity, and taxpayer empowerment,” Olson said. “It is my firm belief that taxpayers must have knowledge about their rights within a bureaucracy as complex as the IRS. If only taxpayers who are represented by tax professionals have access to that knowledge, then we do not have a fair and just tax system. Thus, the digital roadmap will be a powerful tool to improve access to justice.”

    Special Report on Earned Income Tax Credit
    The EITC report, Earned Income Tax Credit: Making the EITC Work for Taxpayers and the Government, presents a detailed examination of the strengths and weaknesses of the EITC as currently structured and administered, and makes legislative and administrative recommendations to improve it. The report runs more than 100 pages – roughly half text and half appendices consisting of EITC data tables (page 49) and a comprehensive literature review (page 82).

    “But this report is not just a research document,” Olson wrote in her preface. “It is a call to action. As we show throughout this report, the way the EITC is structured and the way the IRS is administering it often harms the very taxpayers it is intended to serve. We have made specific, common sense recommendations to mitigate that harm and reform the administration of the EITC.”

    The report makes several recommendations, including:

    • The IRS, which views itself primarily as a tax collection agency, should more explicitly acknowledge that it has a second mission – that of administering benefits programs like the EITC.

    • Congress should consider the administrability of tax provisions, especially family and child-related provisions whose eligibility criteria may be difficult if not impossible for the IRS to verify.

    • Congress should conduct regular oversight hearings of the IRS on a permanent basis. These hearings would provide an opportunity for the IRS to identify successes and challenges with the laws it administers.

    • Congress should consider redesigning the EITC to reduce fraud by separating the worker component from the family-size component of the credit and by revising the definition of a “qualifying child” to better reflect existing family relationships.

    • Congress should authorize the IRS to establish minimum standards for tax return preparers and software providers to protect taxpayers and improve the accuracy of EITC claims.

    • Congress and the IRS should take steps to ensure EITC compliance procedures are consistent with due process norms and fundamental taxpayer rights.

    The subway map expands on seven roadmaps featured in the National Taxpayer Advocate’s 2018 Annual Report to Congress by providing a visually clear depiction of the taxpayer’s journey. The subway map is now available to view online and will be available in hard copy as a print map next month.

    “This digital roadmap will be the culmination of many years of work and research by TAS into human cognition and learning, notice clarity, and taxpayer empowerment,” Olson said. “It is my firm belief that taxpayers must have knowledge about their rights within a bureaucracy as complex as the IRS. If only taxpayers who are represented by tax professionals have access to that knowledge, then we do not have a fair and just tax system. Thus, the digital roadmap will be a powerful tool to improve access to justice.”

    Learn more about the Taxpayers Journey Roadmap: taxpayeradvocate.irs.gov/roadmap.

  2. NTA Blog: Happy Fourth of July

    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

    So that our staff can enjoy the Independence Day festivities with family and friends, we are taking a break this week from posting our blog. We want to wish everyone a happy and safe Fourth of July!

    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. NTA Blog: The IRS's Position on the Application of the Religious Freedom Restoration Act to the Social Security Requirement Under Internal Revenue Code ยง 24(h)(7) Has the Effect of Denying Child Tax Credit Benefits to the Amish and Certain Other Religious Groups

    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 the Tax Cuts and Jobs Act (TCJA) passed in December 2017, the Child Tax Credit (CTC) (Internal Revenue Code (IRC) § 24) was amended to require a Social Security number (SSN) for all qualifying children for whom the credit is being claimed. The stated purpose for the TCJA amendment was to prevent taxpayers who are not eligible to obtain a work-eligible SSN from improperly or fraudulently claiming the CTC or the American Opportunity Tax Credit (AOTC). This requirement raised concerns for some taxpayers—most notably the Amish—some of whom will refrain from obtaining SSNs for their children altogether or for themselves until later in life, due to their deeply held religious beliefs. Prior to this amendment, IRC § 24 only required that a taxpayer identification number (TIN) be provided, and the IRS developed a procedure that allowed Amish taxpayers to claim the dependent exemption under IRC § 151 and the CTC without placing an identifying number on the dependent line of the return. These procedures, described below, have been in place for over 30 years.

    After I raised this issue back in the summer of 2018, and after the IRS reversed course several times, IRS Chief Counsel issued program manager technical advice (PMTA) on March 29, 2019, concluding “… the [IRS] need not provide administrative relief for these taxpayers.”  The IRS revised its guidance on April 15, 2019, to reflect the Chief Counsel’s advice and is disallowing the CTC where qualifying children do not have SSNs on the basis of religious beliefs. Under the TCJA, the maximum CTC for 2018 was $2,000 per child. However, without an SSN, the taxpayer can only receive a partial $500 credit allowed for a dependent—a significant reduction of 75 percent.

    In my recent Fiscal Year 2020 Objectives Report to Congress, I discuss how I consider the conclusion in this advice to be incorrect because the IRS is disallowing the Child Tax Credit to taxpayers who do not provide an SSN for their dependent(s) due to their deeply held religious beliefs, but is allowing the credit to taxpayers who do not have an SSN for their dependent because the child was born and died within the same or consecutive year. Providing an exception for an unprotected class (albeit a very sympathetic one) while denying an exception for a protected class (i.e. the Amish) is a violation of the holding in Sherbert v. Verner as incorporated into the Religious Freedom Restoration Act (RFRA).

    Tension between an individual’s free exercise of religion and a statutory obligation set out in the Tax Code is not a new issue, and is something the Amish community in particular has addressed beginning in about the 1950’s. Amish beliefs prohibit them from accepting government benefits because they believe that God and the community should care for those in need. One consequence of observing these and other core beliefs is that the Amish refrain from accepting Social Security and Medicare benefits, and in some cases from even obtaining a Social Security number, at least until later in life. To accommodate this deeply held belief, Congress passed IRC §§ 1402(g) and 3127, which relieve qualifying religious individuals from complying with the old-age, survivors, and disability insurance obligation.

    The Amish community once again finds its free exercise of religion at odds with a statutory requirement and IRS Chief Counsel’s advice on how it should be implemented. As the discussion below will illustrate, I think Chief Counsel’s conclusion is incorrect.

    There are four landmark Supreme Court cases that established the framework for analyzing free exercise of religion cases: Sherbert v. Verner, Wisconsin v. Yoder, United States v. Lee, and Employment Division, Department of Human Resources of Oregon v. Smith. A brief discussion of these cases follows. For a more in-depth discussion of these cases, read my most recent Objectives Report to Congress.

    In Sherbert v. Verner, 374 U.S. 398 (1963), after being fired for being unable to work on Saturdays due to her religious obligations, appellant applied for unemployment compensation, which was denied because the state’s law provided that a claimant is ineligible for unemployment if he or she has failed, without good cause, to accept other available work offered. Appellant refused other offers that required her to work on Saturdays, the day she observed as the holy Sabbath.

    The Court held that denial of Ms. Sherbert's unemployment claim represented a substantial burden upon her free exercise of religion. Justice Brennan, who wrote the majority opinion, stated, "... to condition the availability of benefits upon this appellant's willingness to violate a cardinal principle of her religious faith effectively penalizes the free exercise of her constitutional liberties."  The Court next considered “whether some compelling state interest enforced in the eligibility of the South Carolina [unemployment insurance] statute justifies the substantial infringement of appellant’s First Amendment right.”  The Court concluded there was none and noted:

    Significantly, South Carolina expressly saves the Sunday worshipper from having to make the kind of choice which we here hold infringes the Sabbatarian's religious liberty. When, in times of "national emergency," the textile plants are authorized by the State Commissioner of Labor to operate on Sunday, "no employee shall be required to work on Sunday . . . who is conscientiously opposed to Sunday work, and if any employee should refuse to work on Sunday on account of conscientious . . . objections, he or she shall not jeopardize his or her seniority by such refusal or be discriminated against in any other manner." S.C. Code, § 64 4. No question of the disqualification of a Sunday worshipper for benefits is likely to arise, since we cannot suppose that an employer will discharge him in violation of this statute. The unconstitutionality of the disqualification of the Sabbatarian is thus compounded by the religious discrimination which South Carolina's general statutory scheme necessarily effects.

    Further, this opinion established what is known as the Sherbert Test, which requires the demonstration of a compelling interest and a narrow tailoring of a law that substantially burdens an individual’s free exercise of religion.

    In Wisconsin v. Yoder, 406 U.S. 205 (1972), the U.S. Supreme Court held that Wisconsin's compulsory school attendance law, requiring children to attend school until age 16 (Amish children stop attending school after 8th grade) was unconstitutional when applied to the Amish, because it imposed a substantial burden on their free exercise of religion and was unnecessary to serve a compelling governmental interest.

    After Sherbert and Yoder, in United States v. Lee, 455 U.S. 252 (1982) and Employment Division, Department of Human Resources of Oregon v. Smith, 494 U.S. 872 (1990), the Court began to erode the compelling governmental interest standard of scrutiny. Specifically, in Smith, the Court held that the “right of free exercise does not relieve [an] individual of [the] obligation to comply with [a] valid or neutral law of general applicability on [the] ground that [the] law proscribes, or requires, conduct that is contrary to his religious practice.” 

    Congress responded to the Smith ruling by passing the Religious Freedom Restoration Act in 1993 on a bipartisan vote. The stated purpose of RFRA was:

    1. To restore the compelling interest test as set forth in Sherbert and Yoder and to guarantee its application in all cases where free exercise of religion is substantially burdened; and
    2. To provide a claim or defense to persons whose religious exercise is substantially burdened by government (42 U.S.C. 2000bb-(1),(2)).

    One of the most recent and significant cases where the standards set out in RFRA were applied to a federal law and a regulation was Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014). In Hobby Lobby, the Court weighed a free exercise claim against the Patient Protection and Affordable Care Act’s (ACA) requirement that businesses’ health insurance include coverage for contraception. Three closely held corporations and their owners asserted that such a requirement violated their religious beliefs. The least-restrictive-means standard is exceptionally demanding, said the Court, and it was not satisfied that the government met that standard in this case. The relevant inquiry is whether an agency is able to show that it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion. The Court noted that the Secretary of Health and Human Services had previously adopted other means by which the regulation could be complied with while not substantially burdening a person’s free exercise of religion. Additionally, the Court determined that failing to provide this alternative means of compliance would force the companies’ owners to either violate their deeply held religious beliefs or honor those beliefs and ultimately pay a financial penalty of millions of dollars, thereby substantially burdening their free exercise of religion.

    I think it is clear that the Supreme Court’s Hobby Lobby decision demonstrates its expectation that agencies must conduct an RFRA analysis when developing administrative policies and procedures. For this reason, the IRS must consider whether its interpretation of IRC § 24(h)(7)—or any statute—would run afoul of RFRA. When conducting such an analysis to the issue at hand, I think the Chief Counsel’s advice rightly concludes that the IRS has a compelling governmental interest to ensure uniform and orderly tax administration and to prevent improper CTC claims.

    However, the conclusion in the Chief Counsel’s advice regarding the SSN requirement in IRC § 24 (h)(7) that “… the least restrictive, and the only, means to further those compelling interests is to require a qualifying child's eligible SSN” is inconsistent with the holding in Sherbert which Congress reinstated in RFRA. Essentially, the IRS’s position seems to be that because IRC § 24 is a generally applicable and neutral statute that on its face categorically requires an SSN to fulfill a compelling government interest, it need not conduct any further analysis. Indeed, under First Amendment Free Exercise jurisprudence after Smith, that may be the case.

    But Congress enacted RFRA to statutorily provide greater protection to the free exercise of religion than the courts grant.

    However, I think the government’s argument falls flat when trying to meet RFRA, which requires the application of the Sherbert analysis to determine the least restrictive means to achieve its compelling purpose. Since about the mid-1980s there has been, and still is, a procedure whereby the IRS processes returns from religious and conscientious objectors claiming dependent exemptions without SSNs. (These procedures still apply to late-filed returns for which the dependent exemption under IRC § 151 is still available.)  This procedure requires the taxpayer to state on his or her return that he or she is “4029 Exempt,” because that taxpayer filed and received both Social Security Administration and IRS approval of the Form 4029, Application for Exemption from Social Security and Medicare Taxes and Waiver of Benefits. Up until the issuance of the new IRS guidance, it corresponded with the taxpayer and required him or her to provide detailed information and documentation demonstrating the existence, age, relationship, and residence of the child before the IRS processed the return. This procedure, which amounts to a pre-processing audit, more than addresses the risk of fraud, which, as noted earlier, is the stated purpose for the SSN requirement when claiming the Child Tax Credit.

    But that is not the end of our analysis. Here, as in Sherbert, the government is applying the SSN requirement disparately between groups of taxpayers. Specifically, despite the statutory requirement that qualifying children have SSNs for taxpayers to claim and receive the CTC and Earned Income Credit (EITC), the IRS has put in place procedures that allow parents of children who were born and died in the same or consecutive tax years to claim these credits even if they do not have an SSN for the child. Internal Revenue Manual (IRM) 3.12.3.26.17.6 (3), updated April 15, 2019, after the issuance of the Chief Counsel memo, states:

    Allow the Child Tax Credit when the child’s SSN is missing, and the child was born and died in the same or consecutive tax period if the taxpayers provide documentary support in the form of a copy of the birth certificate, death certificate, or hospital record …

    Moreover, the IRS has provided guidance regarding these procedures to taxpayers in general, in the form of an FAQ on its website.

    Thus, despite the IRS’s position that the statute on its face requires it to deny CTC claims where a child does not have an SSN for religious reasons, the IRS has found a way—and established a procedure—to permit CTC claims where a child does not have an SSN because the child was born and died in the same or consecutive years. Of course, I find this group extremely sympathetic, but they are not a protected class under the Constitution, and they are not entitled to greater legal protection than that of a legally protected class such as the Amish. Providing an unprotected class with an exception to the SSN requirement under IRC § 24(h)(7) while denying the same exception to a protected class does not comport with the holding in Sherbert as incorporated into RFRA, which requires the law to be neutral and generally applicable: if an exemption is offered to one, it must be offered to everyone.

    Furthermore, providing this exception for the parents of children who were born and died in the same or consecutive years illustrates the fallacy of the Chief Counsel’s claim that:

    In light of the unambiguous language of section 24(h)(7), the least restrictive, and indeed the only, means to further those compelling interests is to require a qualifying child’s eligible SSN for CTC. The Service has no ‘viable alternative’ to implement this clear congressional mandate to require an eligible SSN for a qualifying child.

    Some have suggested that the IRS’s exercise of prosecutorial discretion would enable the IRS to permit parents of children born and deceased in the same or consecutive years to claim the CTC without an SSN. That may well be true, but the government cannot then argue that its compelling government purpose—to combat improper or fraudulent claims of CTC—is a justification for substantially burdening the religious beliefs of Amish taxpayers when it is clearly applying a less restrictive means to another (non-religious) group of taxpayers.

    Others have lamented that Congress has created this mess by not writing an exception into the law for the Amish and others with religious objections to an SSN. Again, that may be true, but RFRA is Congress’ acknowledgement that despite its best intentions, it may write neutral and generally applicable laws that still substantially burden the free exercise of religion. Through RFRA, Congress has attempted to provide those persons with an avenue to challenge that burden. Lamenting about the current state of affairs does not excuse one from conducting a rigorous and complete RFRA analysis.
    For these reasons, I think that the recent Chief Counsel advice on the CTC issue impermissibly and substantially burdens the free exercise of religion under RFRA. The existence of effective and less-burdensome anti-fraud procedures means the IRS can continue to exercise prosecutorial discretion to grant the CTC and EITC to parents whose children were born and died in the same or consecutive years and apply the exemption afforded to this group of taxpayers to the Amish and similar taxpayers as well.

    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.

  4. TAS Tax Tip: Use your 2018 return to get 2019 tax withholding right

    Done with taxes this year? Then use your 2018 return to get your 2019 tax withholding right.

    It’s very important to have the correct amount of taxes withheld from your paycheck. Use the IRS Withholding Calculator and your 2018 tax return information to adjust your withholdings to ensure you don’t have too little or too much withheld. 

    Checking and then adjusting tax withholding can help make sure you:

    • don’t owe more tax than you are expecting;
    • don’t get a surprise tax bill, and possibly a penalty, when filing next year; and
    • don’t receive a refund that is much larger or smaller than expected.

    It’s important to do this as early in the year as possible, so that if a tax withholding adjustment is needed, there is more time for withholding to happen evenly during the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax.

    For 2018, the average refund was around than $2,700. As you do your new calculation, decide if you want to reduce withholding to have a larger paycheck and smaller refund and adjust accordingly. Then provide your employer with the new information on Form W-4, Employee’s Withholding Allowance Certificate. It’s that simple!

    Are You Self-Employed, Work or Participate in Non-Traditional Employment or Service Industries, or Make Money Online?


    If you use one of the many online platforms available to rent a spare bedroom, provide car rides or to connect and provide a number of other goods or services, you’re involved in what is sometimes called the sharing economy.

    If you receive income from a sharing economy activity, it’s generally taxable even if you don’t receive a Form 1099-MISC, Miscellaneous Income, Form 1099-K, Payment Card and Third-Party Network Transactions, Form W-2, Wage and Tax Statement, or some other income statement. This is true even if you do it as a side job or just as a part-time business and even if you are paid in cash.

    For those who don’t pay taxes through withholding, or pay too little tax that way, you can still use the Withholding Calculator to determine if you need to pay estimated tax to the IRS quarterly during the year. Those who are self-employed or participate in sharing economy-type transactions generally pay tax this way. See Form 1040-ES, Estimated Taxes for Individuals, for details.

    For more information about non-traditional income activities, visit the Sharing Economy Tax Center.

    Need a Copy of Your Tax Return? 


    You may be able to get a copy of your tax return or return information from other sources, if you did not keep a copy. If you had your tax return completed by a paid preparer, they should be able to provide you a copy of the return. The IRS can provide a Tax Return Transcript of your 2018 return and three prior years, free of charge. The transcript provides most of the line entries from the original tax return and usually contains the information that a third party (such as a mortgage company) requires. See How to Get Tax Transcripts and Copies of Tax Returns from the IRS for options.

    Taxpayer Advocate Service Resources:

    IRS Resources:

  5. NTA Blog: National Taxpayer Advocate Nina Olson Issues Her Final Report to Congress Today

    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

    Today I am issuing my 37th, and final, Report to Congress as National Taxpayer Advocate. With my pending July 31 retirement creeping ever closer, I have approached this fiscal year (FY) 2020 Objectives Report with a great sense of urgency. The Preface for the report is particularly important this year, because it includes my reflections on the past 18 years, as well as my thoughts on the future of U.S. tax administration and the Taxpayer Advocate Service. I discuss subjects that I believe warrant the closest scrutiny and Congressional oversight. These include the following concerns:

    • Taxpayer service levels are currently very poor, and the IRS does not appear to have a taxpayer-centric strategy or a budget commitment to improve them. 

    • Research shows that forcing customers into self-service applications for anxiety-inducing transactions erodes trust and increases customer dissatisfaction. 

    • To increase taxpayer trust and improve compliance, taxpayer service should be designed around a “Taxpayer Anxiety Index.” 

    • If you don’t have taxpayer trust, you have to control (i.e., more audits, more enforced collection). 

    • Appropriate use of an “Economic Hardship Indicator” would reduce anxiety, minimize taxpayer harm, reduce re-work, and get to the right answer. 

    • There is no more important entity for achieving trust in the tax system than the Taxpayer Advocate Service.

    I also report on the status of my “short-list” of items for resolution with respect to TAS and the IRS before my retirement.

    This Year’s Report Consists of Several Components

    In fact, today’s release is only the first volume of the FY 2020 Objectives Report. One casualty of the 2018-2019 government shutdown is that we were prevented from working on and timely issuing the 2018 Annual Report to Congress. We finally issued that report in February 2019, and thus got a late start on the Objectives Report. While we are releasing Volume 1 of the Objectives Report today, the next two volumes of the report will be released in mid-July 2019.

    Volume 1 includes an analysis of the 2019 Filing Season, an assessment of the impact of the recent government shutdown on the Taxpayer Advocate Service (TAS), a description of 12 key “Areas of Focus” for TAS during the upcoming year, and a discussion of TAS advocacy initiatives, casework, and research studies. As noted above, Volume 2, IRS Responses and National Taxpayer Advocate’s Comments Regarding Most Serious Problems Identified in 2018 Annual Report to Congress, and Volume 3, Making the EITC Work for Taxpayers and the Government: Improving Administration and Protecting Taxpayer Rights, will be published next month.

    The last and most creative component of this year’s Objectives Report, The Taxpayer Roadmap 2019: An Illustration of the Modern United States Tax System, also will be released in July. This roadmap—which actually will be in the form of a subway map—builds upon the seven discrete roadmaps we published in the 2018 Annual Report to Congress. This new roadmap—available in hard copy (32” by 32”) and in digital format—shows, at a high level, the taxpayer’s “journey” through the tax system—from getting answers to tax law questions and preparing a return, through return processing, audit, appeals, litigation, and collection.

    Anyone looking at this map will understand that we have an incredibly complex tax system that is almost impossible for the average taxpayer to navigate. I personally have spent dozens of hours designing and preparing this map, as have many members of my staff. For every step shown on the map, there are tens of steps and interactions that it is impossible to represent in a single document. Thus, TAS is working to develop a digital roadmap into which a taxpayer or practitioner will be able to input the document number of any IRS letter or notice and receive a plain-English summary of that letter or notice. From there, they can click through to the actual roadmap and see where they are. They can also learn more about that step in the tax process and the surrounding steps through pop-ups and links into additional TAS and IRS content, including links to TAS’s Taxpayer Bill of Rights content. You can read more about the digital roadmap here.

    This digital roadmap will be the culmination of many years of work and research by TAS into human cognition and learning, notice clarity, and taxpayer empowerment. It is my firm belief that taxpayers must have knowledge about their rights within a bureaucracy as complex as the IRS. If only taxpayers who are represented by tax professionals have access to that knowledge, then we do not have a fair and just tax system. Thus, the digital roadmap will be a powerful tool to improve access to justice.

    The Current State of IRS Taxpayer Service Erodes Taxpayer Trust and Voluntary Compliance.

    If I were pressed to identify an overriding message of the Objectives Report, I would have to say it is this:  the soundness and effectiveness of any tax administration is measured by the trust its taxpayers have that they will be treated fairly and justly. Throughout this report, we identify instances where IRS processes have fallen short in keeping faith with the taxpayer. This is most notable in the area of taxpayer service, where both the American Customer Satisfaction Index (ACSI) and the Forrester U.S. Federal CX Index rank the IRS in the bottom tier of federal agencies. The ACSI report for 2018 ranks the Treasury Department tied for 10th out of 12 Federal Departments and says that “most [IRS] programs score . . . well below both the economy-wide national ACSI average and the federal government average.”  For its part, the 2019 Forrester report ranked the IRS 13th out of 15 federal agencies and characterized the IRS’s score as “very poor.

    Yet despite the IRS’s remarkably poor customer service performance as measured by the benchmarks cited in the President’s Management Agenda, the Administration's budget proposal for FY 2020 would build up tax-law enforcement at the expense of taxpayer service. Specifically, it proposed to increase funding for the IRS’s Enforcement account by 5.0 percent while cutting funding for the IRS’s Taxpayer Services account by 6.6 percent. This approach is tantamount to robbing Peter to pay Paul.

    There is no doubt that budget constraints have limited the IRS’s taxpayer service capacity. But the IRS should not blame Congress for a lack of taxpayer services funding when it is itself proposing to shift funding away from taxpayer services. What’s more, budget constraints can’t be used as an all-purpose excuse for mediocrity. As I note in the report, the Taxpayer First Act directs the IRS to develop a comprehensive customer service strategy within one year. The IRS should use that requirement as an opportunity to think creatively about better ways to truly put “taxpayers first.”  At present, there is an enormous gap between the “very poor” customer service the agency provides and the “world-class” customer service to which it aspires. The IRS must think long and hard about ways to bridge that gap—and TAS and the next National Taxpayer Advocate should be intimately involved in that effort.

    Of Further Interest …

    I encourage you to look at the entire report, because it is chock full of information. But if you want to focus on just a few things, I suggest you look at my discussions of the Taxpayer Anxiety Index, the Economic Hardship Indicator, and Taxpayer Advocate Service’s challenges in the Preface, along with the Areas of Focus about the application of the Religious Freedom Restoration Act to the Social Security number requirement for the Child Tax Credit. For further reading, you can always check out the Table of Contents and go from there. And stay tuned for the release of Volumes 2 and 3, and the Roadmap, in July!

    I am always enormously proud of each Annual Report, but because this is my last, it has particular pride of place. These reports are the creation of so many people—they are a real team effort by attorney and technical advisors, research, systemic advocacy and case advocacy analysts, and last, but certainly not least, TAS’s creative communications staff. All of them have my deep gratitude and respect. Thank you!

    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.