National Taxpayer Advocate’s Report

Friday, September 9th, 2016 @ 7:06PM

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CFEG reports that on July 7, 2016 the National Taxpayer Advocate (Nina E. Olson) released her statutorily mandated mid-year report to Congress that contains extended excerpts from her ongoing Public Forums on Taxpayer Needs and Preferences, presents a review of the 2016 filing season, and identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the upcoming fiscal year. CFEG provides a link to the full article for your review. TAS reported on a variety issues affecting how taxpayers interact with the IRS. Besides her discussion on the identity theft tax refund fraud problem affecting taxpayers, TAS touched upon other areas such as taxpayer service, limited service options for U.S. taxpayers living abroad, the burdens of the Foreign Account Tax Compliance Act (FATCA), IRS levies on retirement accounts, online taxpayer accounts, and the Earned Income Tax Credit (EITC).

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TAS’s report on the burdens caused by identity theft tax refund fraud found that to date it does not appear that improvements have been made. The IRS screens all tax returns claiming refunds in an attempt to identify returns submitted by identity thieves. When the IRS identifies a return as suspicious, it generally sends the submitter a letter saying the submitter must verify his or her identity before it will release the claimed refund. TAS reported that the false positive rate of this program, known as the Taxpayer Protection Program (TPP), was 36.6 percent in 2015. TPP filters stopped nearly 2.1 million returns overall, so with the 36.6 false positive rate, the IRS stopped more than 760,000 returns filed by legitimate taxpayers.

TAS reported that during just the first five months of 2016, TPP filters stopped about 1.8 million returns, and the IRS was projecting a similar false positive rate of 36 percent. Taxpayers seeking to verify their identities by calling the IRS encountered extreme difficulty getting through, causing many to wait extended periods of time to receive their refunds. During the 2016 filing season, the IRS received more than 4.4 million calls on its TPP telephone line. It answered just 22.7 percent – meaning that nearly four out of every five calls was not answered, by far the worst performance on any high-volume telephone line.

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