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Regulation and Compliance > Federal Regulation > IRS

IRS' National Taxpayer Advocate Retires

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The National Taxpayer Advocate at the IRS has retired after 18 years on the job and no permanent replacement has been named. 

In an interview with The Wall Street Journal on Friday, Nina Olson, whose job was to represent the interests of American taxpayers before the agency, estimates she has solved problems for 4 million tax filers, made about 40 tax-related recommendations that were enacted by Congress and convinced the IRS to make hundreds of administrative changes. Olson was also the force behind the Taxpayer Bill of Rights, which the IRS adopted in 2014.

“My role is not to be a shill for the IRS,” Olson told the Journal.

Olson managed the Taxpayer Advocate Service consisting of more than 1,600 employees helping taxpayers address their problems with the IRS and oversaw annual reports to Congress abut taxpayers’ most serious problems and about her offices goals and planned activities.

In the Wall Street Journal interview, she lamented some of the shortcomings of the IRS, including its embrace of digitization at the expense of conversations with taxpayers.

Only 33% of taxpayers were able to get through to the IRS by phone to address compliance issues like liens and levies, and the average wait time for those who did get through was 41 minutes, according to Olson. 

In addition, said Olson, the agency’s technology is like a “Rube Goldberg contraption built on 1960s architecture that’s ripe for disaster.” Data on taxpayers such as collections and audits are stored in “bits and pieces” and may not be accessible to IRS employees who need the information, according to Olson.

The Taxpayer First Act, signed into law by the president on July 1, addresses some of these issues. It requires the IRS to develop a comprehensive strategy for customer service that it will submit to Congress by July 2020, creates an independent appeals process, strengthens the ability of the agency to combat identify tax refund fraud and requires the IRS commissioner to appoint a chief information officer responsible for the development, implementation and maintenance of information technology for IRS that is secure and integrated within its system.

It also allows IRS personnel to advise taxpayers of the availability of advice and assistance from qualified low-income taxpayer clinics that receive funding under the government along with location and contact information. 

In the Wall Street Journal interview, Olson said Congress needs to do more oversight of the agency and increase its funding — last year’s spending was more than $600 million below the 2011 level in nominal dollars. 

She also offered some examples of tax systems in other countries that Congress and the Treasury Department, which incorporates the IRS, may want to consider.  

Other countries base the taxation on the earnings of individuals rather than the family, which is the foundation for the U.S. system and which contributes to its complications. And many countries withhold enough money from individual taxpayers throughout the year so that they  don’t ever have to file returns.

Olson said the IRS has studied that possibility of such a “pay-as-you-earn strategy” and found that if taxes were withheld on about seven types of income, 62% of U.S. taxpayers would not have to file a return. 

Although she’s gone from the IRS, Olson, who’s 65, will continue to be an advocate for  taxpayers, as the founder and executive director of the Center for Taxpayer Rights. The center will be organizing, in partnership with the Taxpayer Advocate Service, the fifth international Conference on Taxpayer Rights: The four previous international conferences were organized by Olson when she was the taxpayer advocate at the IRS.

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