At the height of the pandemic, between October 1, 2020, and September 30, 2021, the Taxpayer Advocate Service (TAS) received 2,976,415 calls—a 990% increase from the prior 12 months. Those calls were largely from taxpayers seeking answers at a time when the IRS was struggling to process returns and issue refunds. Unsure of where to go next, taxpayers reached out to the TAS, an organization that had gone under the radar for many until that moment.
TAS is an independent organization within the IRS. TAS’ job is to ensure that every taxpayer is treated fairly and that taxpayers know and understand their rights.
Background
While it feels like the TAS has been around forever—that’s not the case. An early version of the organization surfaced in 1979 after the IRS created the Office of the Taxpayer Ombudsman to serve as the primary advocate within the IRS for taxpayers. That office was eventually codified in the Technical and Miscellaneous Revenue Act of 1988—section 7811 of the tax code granted the Ombudsman the statutory authority to issue Taxpayer Assistance Orders (TAOs) when taxpayers were suffering or about to suffer significant hardships. The law also directed the Ombudsman and the IRS Assistant Commissioner (Taxpayer Services) to provide an annual report to Congress about the quality of the IRS’s taxpayer services.
Nearly a decade later, in 1996, Congress officially replaced the Ombudsman with the Office of the Taxpayer Advocate, considered the “voice of the taxpayer.” At the same time, Congress gave the Advocate the authority and responsibility to make Congress aware of recurring, unresolved problems and difficulties taxpayers encounter in dealing with the IRS. The new law also tasked the Advocate with bringing two annual reports to Congress. Those reports are due June 30 (objectives of the Taxpayer Advocate for the coming fiscal year) and December 31 (includes a summary of at least 20 of the Most Serious Problems facing taxpayers) of each year.
In 2014, the IRS formally adopted a new Taxpayer Bill of Rights, a document repeatedly proposed by then-National Taxpayer Advocate Nina E. Olson. The document enumerated taxpayer rights, making them clear, understandable, and accessible for taxpayers and IRS employees.
Today, has at least one local taxpayer advocate office in every state, the District of Columbia, and Puerto Rico, and self-styles as “your voice at the IRS.”
National Taxpayer Advocate
Heading up the agency? The National Taxpayer Advocate (NTA). The NTA is appointed by the Secretary of the Treasury and reports to the IRS Commissioner.
Erin M. Collins is the third and current NTA. She earned her undergraduate degree at the University of California, Irvine, before attending Southwestern Law School in Los Angeles, California.
Appointed in 2020, Collins has a long history with the IRS, having served as IRS Chief Counsel for 15 years. While at the IRS, she worked complex tax cases. Litigating with the IRS, she told Forbes, helped her develop a tax policy focus and an understanding of the national impact of tax administration.
Collins left the IRS to join the Big Four accounting firm KPMG, finding a home in its controversial West Coast practice. At KPMG, she assisted taxpayers by advising positions on returns, drawing on her years of experience at the IRS to handle examinations and appeals.
In 2019, two things happened. First, Collins retired from KMPG after more than 20 years at the firm. Second, Nina Olson—the then-serving NTA—stepped down from her role after 18 years of service.
Collins had not planned on continuing in tax as a profession—she had decided that it was time for a change. The vacancy at the NTA, however, made her rethink her plans. It was, she says, an amazing position. She knew she could add value and bring a different voice, so she threw her hat in the ring.
She was appointed NTA in March 2020. If that sounds familiar, a national emergency was declared on March 13, 2020, due to Covid. Collins had signed on just as some of the most challenging times at the IRS, and by extension, the TAS, were about to begin.
Collins describes the time as “such a difficult four years,” specifically noting the challenges of the filing seasons during the pandemic—and playing catch-up afterward. The IRS typically processes nearly 170 million individual tax returns each year. During the pandemic, they had to sort out processing with a reduced in-person workforce, even as the numbers of returns were increasing to include those filed to claim pandemic-related credits and obtain refunds.
The Sausage
Today, the TAS boasts 2,000 employees and an annual budget of $271 million. Collins notes that the TAS is hiring (“Thank you to Congress for additional funding,” she adds) but says that the results of those new hires might not be immediately apparent.
Historically, some new hires came from the IRS, but the TAS is not seeing that right now.
Some IRS and TAS hires may also boomerang—not unlike Collins—meaning that they leave to go somewhere else and come back to the organization. They bring more experience when they return, which is a good thing.
But there are still a lot of new faces: sixty percent of case advocates have less than three years of experience, says Collins, while the average case advocate has just two to two and a half years.
Since case advocates may touch a bit of everything in their job, they are expected to be familiar with the entire agency and taxpayer experience—from processing returns and interacting with IRS systems to examinations and collections. That can take some time to get up to speed. And, Collins notes that “we train our own.” That means that senior workers may have to be removed from the line to train new employees, slowing down the chain of service even more.
On the plus side, however, these efforts should eventually pay off. Collins says that, 12 months down the road, she expects the TAS to be in “a really good place.”
TAS Workloads
One of the trickier issues to manage is that TAS is downstream from IRS problems. That means that when problems begin to bubble up at IRS, they eventually make their way to TAS. As those IRS issues trickle down, they may significantly impact the level of service at TAS.
For example, when taxpayers were experiencing issues related to delays in processing paper returns, the TAS was limited in how it could assist taxpayers. “We would reach out to our counterparts at the IRS,” Collins explains, “but we couldn’t get the returns.”
It can be especially challenging if those matters hit at once, since case advocates may have 100 to 150 open cases at any given time (overall, the TAS works about 250,000 cases per year).
That may surprise taxpayers who assume that the TAS is simply an extension of the IRS. That’s not true, explains Collins, adding, “We are not a second IRS.”
So, what exactly does the TAS do? The TAS typically steps in to help taxpayers whose tax issues fall into one of three main categories:
- Financial Hardship (Are you or will you experience a significant economic burden due to your tax problem?)
- IRS System Issue (Have you experienced a significant delay while trying to resolve your tax problem, or has an IRS system or procedure failed to operate as intended or failed to resolve your tax-related problem or dispute?)
- Fair & Equitable Treatment (Are the ways that the tax laws being administered raising concerns of equity or will impair your taxpayer rights?)
You can find out more about how the TAS assists taxpayers here.
Cases that dominate TAS dockets currently include processing of returns, identity theft, and Employee Retention Credit (ERC) matters. And, Collins says, she expects that as processing and collections pick up, the TAS will start seeing more collections matters.
Despite heavy caseloads and challenges, Collins says the TAS is doing a “pretty good job.”
Criticisms
That doesn’t mean that things have been perfect.
Taxpayers and tax practitioners alike have voiced concerns about slow response times from TAS—a particularly frustrating pain point for taxpayers who have already attempted to resolve problems directly with the IRS.
Taxpayer letters may not be clear, offering shifting dates for a resolution—and limited options to respond.
Phone calls may go unanswered and callback wait times can take weeks—one practitioner shared that a case advocate’s voicemail advised that the wait for a return call would be between four and six weeks.
There also appears to be a disconnect between the information provided by the intake representative and the case assignments. One practitioner reported that the intake representative advised that there could be a wait of up to two weeks for a matter to be assigned to a case advocate. In reality, the wait times were closer to four months (the case advocate later said that wait was typical for his office). Others reported being turned down by the TAS because extraordinary processing times at the IRS made taking the case impractical, but the TAS was not able to offer a firm follow-up date or advice other than to wait.
Collins admits that TAS can do better and says they are working to make improvements.
Those complaints about confusing correspondences? That should be changing, she says. TAS is working to redesign its letters, which the IRS has also been doing. In addition to making the letters easier to understand, the new look will include better contact information for case advocates.
TAS is also examining ways to improve customer service in other areas, such as shortening wait times and instituting callback features.
As for the intake issues? TAS doesn’t answer that line, says Collins. That falls to IRS Taxpayer Services, which does an initial layer of screening. Better training and communication could help with those disconnects.
Annual Report
Collins is mindful that eyes are on the TAS—even as she has her eyes on the IRS. Each year, the NTA presents an Annual Report to Congress, identifying at least 10 of the most serious problems facing taxpayers.
In her most recent report, Collins identified the following issues:
- Processing (Ongoing processing delays burden and frustrate taxpayers awaiting refunds and other account actions.)
- IRS Hiring, Recruitment, and Training (Shortcomings in the IRS’s employee hiring, retention, recruitment, and training programs adversely affect the quality of taxpayer service the IRS provides and undermine effective tax administration.)
- IRS Transparency (The IRS still does not provide sufficiently clear and timely information to the public, causing confusion and frustration and complicating agency oversight.)
- Telephone and In-person Service (Taxpayers continue to experience difficulties and frustration obtaining telephone and face-to-face assistance to resolve their tax issues and questions.)
- Return preparer oversight (Taxpayers are harmed by the absence of minimum competency standards for return preparers.)
- Identity theft (Lengthy issue resolution delays and inadequate notices burden taxpayers who are victims of identity theft or whose returns the IRS has flagged for possible identity theft.)
- Online account access for taxpayers and tax professionals (Digital services remain inadequate, impeding efficient case resolution and forcing millions of taxpayers to call or send correspondence to the IRS)
- International (The IRS’s approach to international information return penalties is draconian and inefficient.)
- Compliance challenges for taxpayers abroad (Taxpayers abroad continue to be underserved and face significant challenges in meeting their U.S. tax obligations.)
- Appeals (Despite some improvements, many taxpayers and tax professionals continue to perceive the IRS Independent Office of Appeals as insufficiently independent.)
Overall, she noted that the year 2023 “was one of extraordinary transition for the IRS and therefore for taxpayers,” adding, “Despair has turned to cautious optimism.”
Collins went on to laud IRS advances, citing the elimination of the backlog of paper-filed Forms 1040 and answering a much higher percentage of taxpayer telephone calls as two of the most significant improvements for taxpayers while signaling that more changes are needed.
It’s clear that some of the improvements at the IRS were directly related to funding, with Collins writing, “When I look back eight years from now on how the IRS spent its Inflation Reduction Act (IRA) funding, the changes I consider ‘transformational’ will primarily involve the deployment of new technology and innovative thinking.”
The IRS has projected it will run out of IRA funding for the Taxpayer Services and Business Systems Modernization (BSM) accounts in 2026. She has continued to encourage Congress to reallocate, or authorize the IRS to move, funds from enforcement those accounts.
“I look forward to working with Congress and the IRS,” she wrote in the Executive Summary, “as the agency refines and implements its plans, and together with my TAS team, we stand ready to help improve taxpayer service and tax administration for the benefit of all taxpayers and to continue to serve as their safety net when the system fails.”
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