Tax Lawyer's Blog

Let me be the first to nominate National Taxpayer Advocate Nina Olson to be the next Commissioner of the Internal Revenue Service.

It has been a near Sisyphian struggle, but Ms. Olson has somehow managed to keep the boulder of taxpayer rights at the top of the hill.

WebCPA reports that Ms. Olson has urged the IRS to do the following:

• Answer more than 71% of taxpayer inquiries
• Stop filing tax liens and ruining the credit scores of taxpayers who clearly are unable to pay their IRS debts

Here are the relevant excerpts from the article (emphasis added):

IRS Must Answer More than 71% of Taxpayer Calls

In her office’s annual report to Congress, Olson noted that the IRS has set a target for fiscal year 2010 of answering only 71 percent of calls from taxpayers seeking to speak with a customer service representative about account questions, down from 83 percent in FY 2007. 

“In other words, the IRS is planning to be unable to answer about three of every 10 calls it receives,” she said, adding that the IRS expects those who get through will have to wait an average of 12 minutes. “This level of service is unacceptable,” she wrote.

Maybe the 3 taxpayers who don’t get through are the lucky ones because statistics show that of the seventy percent of calls that are answered, IRS officials provides the wrong answer more than 30% of the time.

IRS Must Stop Filing Liens Against Taxpayers Who Clearly Cannot Pay

The IRS uses automated systems to file liens against taxpayers, even when the taxpayer possesses little or no property and the lien will do little more than damage the taxpayer’s financial viability and access to credit. A study conducted by Olson’s office, the Taxpayer Advocate Service, found that IRS procedures for determining a taxpayer’s ability to pay outstanding tax liabilities may be driving some taxpayers into long-term noncompliance because the IRS fails to consider other debts such as credit card balances, school loans, and actual hospital or medical bills. Other tax systems, including Sweden’s, consider the taxpayer’s overall financial picture.

“Any taxpayer with these debts will tell you that these creditors don’t go away,” Olson said. “Taxpayers are placed in the intolerable position of agreeing to pay the IRS more than they can actually afford (given their other debts) and then defaulting on the IRS payment arrangements when they channel payments to unsecured creditors in order to get some peace.”

The National Taxpayer Advocate recommends that Congress require the IRS, before imposing a lien, to make a determination that the benefits of filing the lien outweigh the harm to the taxpayer and will not jeopardize the taxpayer’s ability to comply with future tax obligations.

If the IRS knows that a taxpayer has no assets or has insufficient equity in his assets to pay a significant portion of his tax debt and it still files a tax lien against him, it is engaging in taxpayer harassment. In such instances – and they are myriad - the filing of a tax lien is merely punitive and, therefore, a violation of the taxpayer’s due process rights.

Related Posts:

• IRS Failed to Answer 22 Million Taxpayer Calls
• 5 Secrets the IRS Doesn’t Want You to Know
• National Taxpayer Advocate, Nina Olson, Delivers Report, Congress Pandiculates
• Taxpayer Advocate Scolds Unenrolled Preparers, Favors Regulation
• Taxpayer Advocate’s Recommendation: Go Easier on Taxpayers Experiencing Economic Hardship

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