Every year, the annual report of the National Taxpayer Advocate to Congress identifies at least 20 serious IRS tax problems faced by taxpayers. Some of the issues significantly affect the way taxpayers pay taxes and receive refunds, even if they do not involve disputes with Uncle Sam. As the voice of taxpayers, the National Taxpayer Advocate sends an annual report to the IRS with the aim to elevate these IRS issues and recommend permanent solutions. Continuing further, in this blog post, we look at four of the most serious IRS problems faced by taxpayers. Read on!
1. Tax Law Questions
In 2014, the government implemented a policy of answering questions related to tax law only during the filing season, ie. from the month of January to mid-April. The IRs justified this change in policy as a step towards cost-savings during a time of budget constraints. This change eroded taxpayers’ rights and undermined their confidence in the IRS as there were many tax situations round the year about which they needed help. This 3.5 months short window to ask questions forces them to take help related to IRS problems from third-parties, which further frustrates them and, as mentioned before, results in eroded confidence in the IRS.
2. Navigating the IRS
Taxpayers have often faced issues in locating the right people at the IRS who can provide accurate information regarding their IRS issues. The agency asks taxpayers to call on its main toll-free number which includes many options that are difficult-to-interpret and often lead to confusion and extended hold times. If the taxpayers, in some cases, get the phone number specific to a particular branch, most often they are for a group, rather than an individual employee, making it difficult to have a sense of continuity and rapport with a single individual working on their case.
3. False Positive Rates
The IRS’s detection systems sometimes generate long processing times and false positive rates (FPRs), which increases the taxpayer’s burden, creates TAS cases, and generates phone calls to the IRS. There are many policies that affect the taxpayer’s ability to receive refunds on time, including the failure of the IRS to capture important information to evaluate the efficiency and accuracy of its IDT and non-IDT refund fraud programs; IRS’s past failure to look at the third-party information on regular basis, and its failure to implement systemic verification in its detection systems.
4. Economic Hardship
Economic hardship occurs when someone is not capable of paying for expenses necessary for living. Although Congress asks the IRS to pause on some collection actions such as levy if a taxpayer is suffering from economic hardship, the federal tax agency is not proactive in locating such individuals throughout the collection process. The IRS has no systematic alert system that can tell its tax collection employees that a particular taxpayer is at the risk of economic hardship so that they can determine the appropriate collection method. As a result, taxpayers enter into installment agreements (IAs) that they cannot afford and unnecessarily get into disputes with the IRS.
Although all these IRS issues are common among taxpayers, there are specific procedures that can help you solve issues including taking advantage of IRS tax relief. All you need to do is to seek assistance from a professional tax attorney who can analyze your IRS issues and advise on possible solutions. If you need help with any IRS issues in Texas, reach out to the Law Offices of Nick Nemeth’s team of seasoned IRS tax attorneys in Dallas, Texas. For a free and no-obligation consultation, simply call (972) 484-0829 or fill out our contact form and we will take it from there.