Today, the Ways and Means Oversight Subcommittee, chaired by Rep. Vern Buchanan (R-FL), held a hearing on the need to reform the Internal Revenue Service (IRS) to better serve taxpayers.
As Chairman Buchanan explained at the start of the hearing:
“It is important to emphasize that our efforts to reform the IRS should not be seen as a punishment or a criticism of the average agency employee. Instead they are a recognition that the IRS mission is important. Every government entity, just like private companies, can benefit from a thorough review and some thoughtful long-term planning. And that is what we are trying to do here.”
“The Taxpayer Bill of Rights contains ‘the Right to Quality Service’ as second on its list. An IRS publication describes that right as ‘the right to receive prompt, courteous, and professional assistance in [taxpayer] dealings with the IRS.’ As we consider reforms to the IRS, we should keep this right as well as the other nine in mind.”
Members discussed challenges within the agency and examined opportunities for improvement with Nina Olson, National Taxpayer Advocate at the Internal Revenue Service, who has dedicated her career to protecting taxpayer rights. Throughout the hearing, Ms. Olson offered insights and recommendations for how to improve efficiency and customer service at the IRS. As she noted:
“It has been nearly two decades since Congress last reviewed and updated the laws governing IRS operations. A lot has changed during that time and tax administration would benefit from a fresh review of those laws.”
“Sound tax administration should be predicated on foundational principles, and the most important principle is respect for taxpayer rights.”
When Rep. Jackie Walorski (R-IN) asked about how the IRS has failed to protect taxpayers—for example a single mom or a small business owner—from fraud, Ms. Olson said:
“Identity theft and refund fraud have been the top two case receipts in taxpayer advocate service for the last five years. And they really are a significant part of the inventory. It’s devastating … this affects people who are low income, high income, it doesn’t matter. People are having to get their preparers to call and people often submit documentation multiple times. There is no one person assigned to their case so every time they call they have to tell their story to a different person. These are all recommendations we’ve made.”
When Rep. Diane Black (R-TN) asked about the way IRS communicates guidance to taxpayers, Ms. Olson said:
“Rather than going through what it views as the cumbersome regulatory process, which would require notice and comment, it does stuff to get guidance out faster … they are moving more toward FAQs, which are great in the sense that you get things up quickly, but you cannot tell when a change has been made unless you print out the FAQ every single day and track it word for word. And they’re not reliable … as that gets done more, you’re really leaving the taxpayer in a vulnerable situation.”
As Members discussed recommendations, Chairman Buchanan raised the need to help small businesses resolve disputes with the IRS. In response, Ms. Olson recommended:
“[W]e should take a look at the Appeals function and see how we really make it work as the safety valve that it was intended to be.”
CLICK HERE to learn more about today’s hearing.