Problems with the IRS: Do You Agree?

(First of two parts) Taxpayer Advocate Nina Olson recently released her 2016 Annual Report to Congress. The following list discusses the first 10 of the report’s 19 Most Serious IRS Problems:

1. Voluntary compliance: The IRS focuses heavily on so-called enforcement revenue and productivity, rather than relying on behavioral insights to increase voluntary tax compliance.
2. Worldwide taxpayer service: The IRS hasn’t adopted best-in-class taxpayer service despite facing similar challenges as other tax administrations.
3. IRS structure: The IRS’ functional structure isn’t equipped to identify and address taxpayers’ compliance needs.
4. Geographic focus: The IRS lacks adequate local presence in communities, thereby limiting its ability to meet the needs of specific taxpayers and improve voluntary compliance.
5. Taxpayer Bill of Rights: The IRS must do more to incorporate the Taxpayer Bill of Rights into its operations.
6. Enterprise Case Management (ECM): The IRS’ ECM initiative lacks strategic planning and has overlooked the Taxpayer Advocate Service Integrated System as a quick deliverable and building-block for the larger ECM project.
7. Online accounts: Research into identifying taxpayer and practitioner tax service needs and preferences is critical as the IRS develops an online taxpayer account system.
8. Earned Income Tax Credit (EITC): The Future State’s reliance on online tools will harm EITC taxpayers. (Future State is IRS’ comprehensive plan to interact with taxpayers 5+ years from now.)
9. Fraud detection: The IRS’ failure to reduce high false-positive rates for its fraud detection programs increases taxpayer burden and compromises taxpayer rights.
10. Timing of refunds: The speedy issuance of individual income tax return refunds drives fraud and identity theft; more research is needed on the costs and benefits of holding refunds until the end of the filing season.

These issues, along with the nine we’ll cover next week, negatively impact taxpayers’ rights. Want to read the Taxpayer Advocate's voluminous report? Find it at https://taxpayeradvocate.irs.gov/reports/2016-annual-report-to-congress/full-report.If you need assistance with your complex tax return, the professionals at Patrick & Robinson CPAs hold decades of financial consulting experience. Contact us at Office@CPAsite.com or 904-396-5400.