National Taxpayer Advocate Nina E. Olson has released her annual report to Congress, identifying the combination of the IRS’s expanding workload and declining resources as the most serious problem facing taxpayers. The result, the report says, is inadequate taxpayer service, erosion of taxpayer rights, and reduced tax compliance. The Advocate expressed her continuing concern that the IRS’s expanding use of automated processes to adjust tax liabilities is causing harm to taxpayers and once again recommended that Congress enact a comprehensive Taxpayer Bill of Rights.
“The overriding challenge facing the IRS is that its workload has grown significantly in recent years, while its funding is being cut,” Olson said in releasing the report. “This is causing the IRS to resort to shortcuts that undermine fundamental taxpayer rights and harm taxpayers—and at the same time reduces the IRS’s ability to deliver on its core mission of raising revenue.”
The sharp increase in the IRS’s workload is due to several factors, including: the increasing complexity of the tax code and the code’s frequent changes; the need to provide service to an increasingly diverse taxpayer population; the IRS’s increasing responsibility for administering economic and social policies; a surge in refund fraud and tax-related identity theft; and the implementation of new third-party information reporting requirements.