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William Perez

National Taxpayer Advocate Releases 2012 Annual Report to Congress

By January 15, 2013

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In her 2012 Annual Report to Congress, National Taxpayer Advocate Nina Olson identifies 23 of the most serious problems facing American taxpayers. Top among her list is the complexity of the tax laws.

The top 23 most serious problems identified by the Taxpayer Advocate are:

  1. The Complexity of the Tax Code
  2. The Alternative Minimum Tax Corrodes Both the Tax System and the Democratic Process
  3. The IRS Is Significantly Underfunded to Serve Taxpayers and Collect Tax
  4. The IRS Has Failed to Provide Effective and Timely Assistance to Victims of Identity Theft
  5. The IRS Harms Victims of Return Preparer Misconduct by Failing to Resolve Their Accounts Fully
  6. Despite Some Improvements, the IRS Continues to Harm Taxpayers by Unreasonably Delaying the Processing of Valid Refund Claims that Happen to Trigger Systemic Filters
  7. The IRS's Compliance Strategy for the Expanded Adoption Credit Has Resulted in Excessive Delays to Taxpayers, Has Increased Costs for the IRS, and Does Not Bode Well for Future Credit Administration
  8. The IRS Offshore Voluntary Disclosure Programs Discourage Voluntary Compliance by Those who Inadvertently Failed to Report Foreign Accounts
  9. The IRS's Handling of ITIN Applications Imposes an Onerous Burden on ITIN Applicants, Discourages Compliance, and Negatively Affects the IRS's Ability to Detect and Deter Fraud
  10. The Preservation of Fundamental Taxpayer Rights Is Critical as the IRS Develops a Real-Time Tax System
  11. Overextended IRS Resources and IRS Errors in the Automatic Revocation and Reinstatement Process Are Burdening Tax-Exempt Organizations
  12. The IRS Telephone and Correspondence Services Have Deteriorated Over the Last Decade and Must Improve to Meet Taxpayer Needs
  13. The IRS Has Failed to Make Free Return Preparation and Free Electronic Filing Available to All Individual Taxpayers
  14. The IRS Is Striving to Meet Taxpayers' Increasing Demand for Online Services, Yet More Needs To Be Done
  15. Challenges Persist for International Taxpayers as the IRS Moves Slowly to Address Their Needs
  16. IRS Processing Flaws and Service Delays Continue to Undermine Fundamental Taxpayer Rights to Representation
  17. The IRS Lacks a Servicewide Strategy that Identifies Effective and Efficient Means of Delivering Face-To-Face Taxpayer Services
  18. The IRS Is Substantially Reducing Both the Amount and Scope of its Direct Education and Outreach to Taxpayers and Does Not Measure the Effectiveness of its Remaining Outreach Activities, Thereby Risking Increased Noncompliance
  19. A Proactive Approach To Developing a Government Issued Debit Card to Receive Tax Refunds Will Benefit Unbanked Taxpayers
  20. The Diminishing Role of the Revenue Officer Has Been Detrimental to the Overall Effectiveness of IRS Collection Operations
  21. The Automated Collection System Must Emphasize Taxpayer Service Initiatives to Resolve Collection Workload More Effectively
  22. Although the IRS "Fresh Start" Initiative Has Reduced The Number of Liens Filed, the IRS Has Failed To Determine Whether its Lien-Filing Policies Are Clearly Supported by Increases in Revenue and Taxpayer Compliance
  23. Early Intervention, Offers in Compromise, and Proactive Outreach Can Help Victims of Failed Payroll Service Providers and Increase Employment Tax Compliance

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