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I have posted several times about the discussion draft of the Taxpayer Assistance and Service Act since it was jointly released earlier this year by Senate Finance Committee Chairman Mike Crapo and Committee ranking member Ron Wyden. The act has 68 provisions with approximately 40 that resemble recommendations from past Taxpayer Advocate Service (TAS) Annual Reports to Congress and my recent Purple Book.
In this blog I focus on how the Taxpayer Assistance and Service Act includes my recommendation to clarify TAS’s ability to access certain types of IRS information and what it means for TAS’s independence.
Taxpayers and their representatives generally seek TAS assistance for tax issues involving economic burden, IRS system breakdowns, or issues affecting taxpayer rights. Upon request, TAS may open a case for the taxpayer and intervene to work with the IRS to appropriately resolve the issue(s). From the inside, but independently, TAS works to uphold and defend taxpayer rights.
The list of issues that taxpayers can experience is expansive and ranges from easy to complex. Some of the issues taxpayers bring to TAS are simpler to resolve, but many taxpayer cases often become incredibly involved. The IRS has resources and expertise at its disposal that it uses to acquire and evaluate information for taxpayer cases and its operations. The facts and circumstances of a case may dictate a need for meetings between taxpayers and the IRS and even the IRS’s receipt of legal advice from the Office of Chief Counsel. It generates, analyzes, and uses the information for various purposes like case development, to establish legal positions, and to support administrative case determinations.
The IRS secures a lot of important information. Timely access to important information such as audit files, legal guidance, and meetings helps TAS be more efficient and effective doing our job. With regard to this important information, I believe that legal clarity would benefit all involved. Clear legal access would make it easier for TAS to secure the information we need and would also make it easier for the IRS to provide. It would ensure that this information is always available to TAS in fulfilling our statutory duties.
Independence is a foundation of TAS’s advocacy work, and TAS employees must notify taxpayers of TAS’s independence on initially meeting with a taxpayer. Generally, IRC § 7803(c) requires TAS to help taxpayers resolve their IRS problems and to identify tax administration problems and make recommendations to the IRS and Congress to mitigate them. Congress also mandates TAS annually submit reports with full and substantive analysis of our findings and recommendations for its review.
Legal authority for TAS to access and review tax return information comes from IRC § 6103(h). Currently, the IRS determines if TAS gets to access certain types of information that may not fit neatly under IRC 6103(h), but rather align within the scope of TAS’s statutory duties directed by IRC 7803(c). Because of the information’s importance and connection to TAS’s independent statutory duties, it would be beneficial for taxpayers to have the law explicitly grant TAS access and remove any barriers in assisting taxpayers.
Independence enables TAS to provide direct advocacy to taxpayers for their IRS issues, objectively identify problems in tax administration, and make administrative and legislative recommendations to fix those problems. It is the key to TAS fulfilling its statutory responsibilities to taxpayers and to Congress. Independence fortifies the foundation of taxpayer trust in TAS. Here, clarifying TAS’s access to this type of IRS information will also clarify the strength of TAS’s independence.
Enactment of the Taxpayer Assistance and Service Act would definitively resolve this issue. All five provisions in Title IV of the Taxpayer Assistance and Service Act are specific to TAS. Section 403 provides clarity on TAS’s access to the types of IRS information in question. It recognizes that TAS’s statutory duties necessitate access to this type of IRS information and would permit TAS to access information like taxpayer meetings, audit files, and legal advice.
TAS provides direct assistance to eligible taxpayers and works to improve tax administration for all taxpayers. The law requires TAS to assist taxpayers with their IRS issues, identify problems that adversely affect taxpayers, taxpayer rights, and tax administration, as well as recommend solutions to fix the problems. Access to this type of IRS information is necessary to fulfill our statutory requirements.
Among its many impactful provisions, the Taxpayer Assistance and Service Act would reinforce TAS’s independence by providing statutory authority to TAS to access this important IRS information. Resolving this issue requires congressional intervention, so it is encouraging that this provision is included in the Taxpayer Assistance and Service Act.
The views expressed in this blog are solely those of the National Taxpayer Advocate. 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.