Facebook Loses Challenge in District Court

We have previously discussed the case that Facebook has brought in federal district court, where it argued that it had an enforceable right to Appeals in a matter that spun from its transfer pricing dispute that it is litigating in Tax Court.  In particular Facebook brought two claims under the Administrative Procedure Act alleging that the IRS acted arbitrarily and capriciously in refusing to refer its case to Appeals. Facebook also brought a claim for mandamus, asking the court to order the IRS to refer its tax case to IRS Appeals.

In this order, the district court has granted the government’s motion to dismiss the suit, finding that Facebook did not have standing because it failed to establish that there was a statutory right to Appeals. That absence of a statutory right led the court to conclude that it had no legally protected interest, a necessary element to prove standing. In so holding, the district court considered the 2015 codification of TBOR, and Facebook’s argument that TBOR reflected Congress’ direction to give taxpayers a statutory right to Appeals:

[W]hat the statutory TBOR did was to impose an affirmative obligation on the Commissioner of Internal Revenue to “ensure that employees of the Internal Revenue Service are familiar with and act in accord with” preexisting taxpayer rights established in other provisions of the Internal Revenue Code. In other words, the TBOR directed the Commissioner to, for example,better manage and train IRS employees to ensure that IRS employees know what rights taxpayers have and act in a way that respects those rights.

In reaching its conclusion the court emphasized that the government’s interpretation did not render the adoption of TBOR a nullity:

First, the statutory TBOR imposes duties on the IRS Commissioner to manage and train IRS employees regarding taxpayer rights. See generally Toward a More Perfect Tax System at 23–36 (discussing proposals for improved management and training of IRS employees); Amanda Bartmann, Making Taxpayer Rights Real: Overcoming Challenges to Integrate Taxpayer Rights into a Tax Agency’s Operations, 69 Tax Law. 597, 614–24 (2016) (same). Second, Facebook’s interpretation that the TBOR itself created new rights ignores the statutory language that the TBOR rights are “afforded by other provisions of this title.” 26 U.S.C. § 7803(a)(3)

It also considered the rights collectively, rather than solely focus on the right to appeal to an independent forum. That led the court to question whether the codification of TBOR should lead to the creation of substantive or procedural rights:

Facebook focuses on only one TBOR right — “the right to appeal a decision of the Internal Revenue Service in an independent forum” — but Facebook’sarguments, if they were correct, would apply to the other nine rights too. For example, the first right is “the right to be informed[.]” 28 U.S.C. § 7803(a)(3)(A). Applying Facebook’s argument, this provision must have created a new substantive right “beyond those existing prior to [the TBOR’s] codification.” A new right to be informed about what? And when? The TBOR does not say, and neither does Facebook. It is implausible that the TBOR created ten new substantive rights that it defined so poorly. The logical reading of the TBOR is not that it created some new, wholly nebulous rights, but that it created no new rights at all, and instead that Congress meant what it said when it said that the TBOR rights were rights “afforded by other provisions of this title,” not new rights created by the TBOR itself. (footnotes omitted)

The opinion also considered the APA and Facebook’s mandamus claim. The court discussed the Revenue Procedure setting Counsel’s discretion to limit access to Appeals and the agency’s decision to not refer the matter to Appeals, and held that neither constituted final agency action.

This is a quick summary and I suspect not the last we will say about this case, nor this issue. The case was discussed last week at the ABA Tax Section meeting, and advocates will continue to press courts to consider the codification of TBOR in differing settings. As I discussed on a panel with Keith and the National Taxpayer Advocate at the Tax Court judicial conference, and as Chris Rizek raised at the ABA Tax Section meeting in response to a question from Special Trial Judge Leyden, a court’s consideration of TBOR would likely differ in a CDP case, where the Tax Court reviews IRS collection actions for abuse of discretion and is required to balance the government’s interest in collecting taxes with the individual’s right that the collection actions that are no more intrusive than necessary.

TBOR and CDP

On March 20, the Tax Court entered an order remanding a Collection Due Process (CDP) case back to Appeals to consider the collection alternative requested by the taxpayer. The remand resulted from the request of the IRS over the strenuous objection of the taxpayer. That’s not the normal scenario for a remand. The taxpayer also sought to have the IRS levy, which it refused to consider at the Appeals level of this CDP case. The facts explain the reason for this seemingly topsy turvy situation. The case also involves significant arguments by the taxpayer about the Taxpayer Bill of Rights and how the actions of the IRS are abrogating those rights. Les and I discussed this case, and others, in our panel presentation this week at the Tax Court Judicial Conference. I will briefly touch on the other cases that we discussed during the panel.

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Mr. Dang is a refugee from Vietnam. After arriving in the United States and quickly integrating, he eventually went into business. Although the business had success initially, it subsequently failed. Mr. Dang had the misfortune to hire a disreputable tax advisor who got him into trouble with the IRS during the period in which the business operated. He has an outstanding liability in the neighborhood of $100,000. That amount of liability allowed Mr. Dang to have his case handled by a revenue officer.

Mr. Dang, through his counsel at a low-income taxpayer clinic, explained to the revenue officer that his IRA was the only asset he had with which he could satisfy his outstanding tax obligation. He asked the revenue officer to levy on his IRA so that he could avoid the 10% (approximately $10,000) excise tax under IRC section 72(t). After some initial resistance, he appeared to have succeeded in convincing the revenue officer to levy on the IRA; however, before the levy occurred, the IRS assigned the case to a new revenue officer and she declined to levy on the retirement account. Instead, she asked Mr. Dang to pull the money out of the IRA and pay off the debt.

Eventually, the IRS issued a CDP notice and Mr. Dang requested a hearing. At the hearing, he requested that the IRS levy on his retirement account. The Appeals employee declined to accept that levying on his retirement account could serve as a collection alternative. He denied relief and issued a determination letter sustaining the right of the IRS to levy on Mr. Dang. A Tax Court petition followed and in their answer to the petition, the lawyers at Chief Counsel IRS admitted that the Appeals employee should have considered Mr. Dang’s request and considered whether a levy on the retirement account would serve as the best way to collect from Mr. Dang. The answer filed on December 1, 2017, stated “respondent will seek to remand this case to Appeals for a supplemental Collection Due Process hearing in which the Settlement Officer’s errors can be corrected.” The answer also stated that respondent “admits petitioner’s CDP hearing was incomplete and did not properly consider all collection alternatives.”

On January 3, 2018, the IRS filed its motion to remand. In that motion, respondent said:

  1. SO True incorrectly believed this request did not qualify as a ‘collection alternative’ and was thus outside the scope of Appeals CDP hearing jurisdiction….
  2. SO True’s determination regarding Appeal’s ability to consider the request was incorrect. Appeals should have evaluated petitioners’ request to pay his liability via a levy on petitioner husband’s Individual Retirement Account and determined whether it was in the best interests of the taxpayers and the government.
  3. Pursuant to Treas. Reg. 301.6330-1€(3) Q&A-E6, taxpayer can request a ‘substitution of assets’ be considered as a collection alternative during a CDP hearing. Requesting respondent collect from a specific revenue source or asset is an acceptable ‘collection alternative’ request and should be considered by Appeals….
  4. A remand for a supplemental hearing is appropriate when it will be helpful or productive…. A remand would be helpful and productive because resolution of this issue would preserve the parties and the Court’s time and resources.”

Petitioners objected to the motion, arguing that it was unnecessary to remand the case and that the Tax Court should simply order the IRS to levy on his retirement account. In the brief filed in support of their objection, petitioners made several arguments and requested “sanctions for violating the Taxpayer Bill of Rights, unnecessarily delaying the resolution of this matter, and needlessly increasing the cost of litigation.” They stated “by refusing to levy on Petitioners’ IRA but insisting upon a voluntary withdrawal from that same IRA, RO Neville rendered meaningless the taxpayer relief enacted by Congress.” They cited to several violations of TBOR, including the right to a fair and just tax system and the right to pay no more than the correct amount of tax.

In remanding the case, the Court gave the IRS a very short time frame to hold the remand hearing and render its opinion regarding taxpayer’s request. Short time frames are a regular feature of CDP cases for taxpayers but not very often for the IRS. It will be interesting to watch this case not only for the substance of the argument that the IRS should levy upon the IRA but also for the role that TBOR might play in the ultimate resolution of the case.

In the panel discussion at the judicial conference, we not only discussed this case but discussed the case of Winthrop Towers previously blogged here, the Harris case  we blogged here and the case of Facebook previously blogged here. It is interesting that in the government brief in opposition to the relief requested by Facebook that it took time to distinguish the Winthrop Tower’s case.

As more and more litigants begin to focus on TBOR, it will be interesting to see how the rights enshrined in legislation in 2015 will impact outcomes of cases (and outcomes of administrative action.) National Taxpayer Advocate Nina Olson, who participated on the panel at the judicial conference said that she did not know how this might turn out but she was watching anxiously. She also said that quotes attributed to her in the government’s brief in opposition quoted her discussing the administrative publication of TBOR and not the legislative enactment. She indicated that by putting it into the Code, Congress changed the impact of TBOR in ways that we do not yet know.

Conclusion

In addition to the CDP and TBOR issues brought to light by this case, the case also raises the issue of levy on retirement accounts. The IRS requires that front line employees get approval two levels up in order to levy on retirement accounts. That approval process generally inures to the benefit of holders of those accounts but serves as a disadvantage to someone like Mr. Dang who wants the IRS to make the levy on his retirement account while the revenue officer does not want to go through the trouble. It seems like there should be a relatively easy path to levy upon a retirement account when it is made at the taxpayer’s request. It is also troubling that those with retirement accounts have their assets more protected from IRS collection action than poorer clients whose only retirement is social security and from whom the IRS can take 15% with no extra approval.

 

Chamber of Commerce Files Amicus in Facebook Case: In Praise of Appeals

The Chamber of Commerce, no stranger to cases challenging fundamental issues in tax procedure, has filed an amicus brief in the case I discussed earlier this week where Facebook is suing IRS due to the agency denying Facebook access to Appeals.

The amicus largely repeats the substantive arguments Facebook has made though emphasizes 1) the importance that taxpayers place on ensuring access to a fair and impartial Appeals function and 2) the cost to the system if IRS is allowed to bypass Appeals when it in its unreviewable discretion believes that decision is consistent with “sound tax administration.”

The brief highlights how taxpayers value privacy (uhh a privacy argument  in a case involving Facebook?) and unlike cases in federal court, Appeals proceedings are outside the public eye. The brief also discusses how Exam is kept in check by Appeals’ mission to settle cases fairly and on the hazards of litigation, a balancing act that Exam does not apply in evaluating possible resolutions:

Taxpayers no longer can feel confident that they will have access to an independent forum to serve as a safety valve on an overzealous examination team. Taxpayers and examination teams alike may focus more energy on convincing IRS Counsel whether it is in the interests of “sound tax administration” to permit access to IRS Appeals at the expense of devoting effort to developing the merits of the issues in the case. The effects of Revenue Procedure 2016-22 will be felt far beyond those cases in which access to IRS Appeals is actually denied.

The brief also emphasizes the Chamber’s view that IRS is trying to carve out a different path and extend dreaded tax exceptionalism:

The IRS continues to resist application of the APA, arguing in this case that “Congress has provided specific rules for judicial review of tax determinations; those specific rules control over the more general rules for judicial review embodied in the APA.”

***

Whatever the underlying merits of the IRS Appeals process, and Facebook’s claims in this case, it is nonetheless astonishing for the IRS to argue in its Motion to Dismiss that it has the authority to deny taxpayers access to an independent administrative forum in an arbitrary and capricious manner, and that taxpayers that are adversely impacted by those actions have absolutely no judicial recourse. Whatever one can say about the goals of “sound tax administration,” a system in which the IRS is above the law—the very same law that applies to all administrative agencies of the federal government—is not one that the Supreme Court has approved and is not one that this Court should approve.

The Chamber brief hangs its hat in part on the argument that the courts have been pushing back on tax exceptionalism. That to me is atmpospherically relevant, but it proves too much: administering the tax system is different from say regulating noxious emissions or ensuring airplane safety.  The devil is in the details of the particular procedures or path IRS believes warrant a separate approach.

IRS has not helped itself in this case though by promulgating essentially a standardless standard that allows Counsel to bypass Appeals that as the brief indicates allows Counsel to “mask illegitmate reasons for denying access to Appeals.” Even if in this case the reason for cutting off access to Appeals is legitimate, the lack of guidance on what should inform or explain that bypass decision generates a perception of illegitimacy, and that is not sound tax administration.

 

Facebook Asserts that TBOR Mandates Right to Appeals

Facebook and IRS are squaring off in Tax Court over billions in taxes relating to its transfer of intangible assets to Irish subsidiaries. That fight has spawned major procedural side skirmishes in a California federal district court, including battles over privilege and IRS’s refusal to allow the social media giant access to Appeals.

Perhaps in a later post I will return to the interesting privilege battles. This post is about the important legal issues in Facebook’s challenge to the IRS’s rules that allow Counsel discretion to eliminate a taxpayer’s right to Appeals.

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In its complaint that it filed last November, Facebook seeks a declaratory judgment that IRS unlawfully issued a 2016 revenue procedure that unlawfully denied its access to an administrative forum. IRS began its audit of Facebook in 2011, and Facebook repeatedly sought Appeals consideration. After Facebook declined to extend the SOL on assessment for a sixth time because IRS did not agree to provide a timetable for Appeals consideration, IRS issued its stat notice. Facebook petitioned to Tax Court and renewed its request for Appeals consideration. IRS refused, referring to the 2016 revenue procedure that allowed Counsel to bypass its right to Appeals review in its transfer pricing deficiency case in the interest of “sound tax administration.”

The case tees up Appeals role and whether taxpayers have the right to Appeals’ consideration in light of developments over the last two decades. Prior to 1998, it was generally accepted that the right to Appeals was discretionary, and the product of IRS procedural rules that IRS was not required to follow. The pre-1998 Code barely acknowledged Appeals’ role in tax administration.   When we rewrote the Saltzman and Book IRS Practice and Procedure chapter on Appeals (currently slated for another refresh this summer) we discuss how the 1998 IRS Restructuring and Reform Act of 1998 (RRA 98) changed that through a host of Code provisions that directly mention Appeals and an off Code but still statutory directive to IRS to ensure an independent Appeals function. In addition, the 2015 codification of TBOR in Section 7803(a)(3)(E) requires that the Commissioner ensure that IRS employees be familiar with and act in accord with taxpayer rights, including the “right to appeal a decision of the Internal Revenue Service in an independent forum.”

In its response to government’s motion to dismiss Facebook argues that RRA 98 and Section 7803(a)(3)(E), taken together, mean that IRS is not free to cut off Appeals’ rights as it has done via the revenue procedure (and as an aside in the IRM when it allows for bypassing Appeals in cases designated for litigation). In making its argument, Facebook claims that TBOR itself creates a substantive right. In response to the IRS view that Section 7803(a)(3)(E) does not directly provide a remedy for violations, Facebook argues that when Congress explicitly directs agency action (as it argues was done with Appeals consideration), an agency cannot dismiss that as meaningless. In addition, Facebook claims that Section 7803(a)(3)(E) justifies the court ordering a remedy for agency violations, through Supreme Court precedent that courts should not read language in statutes as “mere surplusage.”  This argument syncs with our recent guest post on the subject.

The government makes a number of arguments in response, including that TBOR merely expresses general principles and does not create binding rights, the TBOR reference to an independent forum refers to judicial and not administrative review, and that in any event Facebook does not have Article III or statutory standing to bring the litigation.

The matter is scheduled for a hearing in April. We will keep a close eye on this litigation.

Even apart from this case, the broader issue of the role of taxpayer rights in tax procedure is an issue that is picking up steam and is likely to become one of the major issues in tax procedure in the next few years. On PT Christina Thompson recently discussed Alice Abreu and Richard Greenstein’s article on taxpayer rights (which flags some of the issues in this litigation). In addition, Keith and I will be on a panel at the Tax Court judicial conference in Chicago later this month that will consider taxpayer rights, and in May Alice and I will be moderating two panels at the ABA Tax Section Individual and Family Tax Committee and Pro Bono and Tax Clinics Committee that will consider rights in controversies and include more on the Facebook litigation. One of the main promoters of taxpayer rights in tax administration, Nina Olson, is convening the third International Taxpayer Rights Conference in May.

Article Review: How Can Tax Collection Be Structured to Observe and Preserve Taxpayer Rights: A Discussion of Practices and Possibilities

We welcome back guest blogger Sonya Watson who teaches at UNLV law school where she is an assistant professor in residence and the director of the Rosenblum Family Foundation Tax Clinic. As mentioned before, she is one of the new clinic professors now writing a regular feature which describes law review articles on tax procedure issues. She has selected an article I wrote a couple of years ago on taxpayer rights. Assisting her in the preparation of this post is her student, Vincent Kwan. Keith

In this article by Keith Fogg and Sime Jozipovic, the authors address the U.S. tax system and explore the rights of taxpayers in different countries for comparison. The article generally focuses its discussion on taxpayer rights and collections, but specifically on the enforcement mechanisms used by various governments.

Generally, the government’s inability to collect and enforce collection can be seen as a failure of the system that makes those who comply with tax laws feel as if others have an unfair advantage. However, the government must balance forced compliance against those who do not pay voluntarily with caution so as not to “drive [noncompliant taxpayers] to an underground economy, to discontinue producing income or to economic positions that fall through the necessary social safety net.” To properly and effectively enforce the tax laws, the government must consider the rights of the taxpayer as well as what the government can do to ensure compliance.

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According to Fogg and Jozipovic, there are three taxpayer rights that must be preserved to main an effective tax system, which include the right to be informed, the right to challenge the underlying liability and proposed collection action, and the right to a fair and just tax system. To give a more well-rounded and holistic view of the way in which the government can preserve taxpayer rights, the authors discuss the tax collection systems of the United States, England, Germany, Switzerland, Croatia, and Australia. The article highlights the differences between tax systems and taxpayer’s rights in each country, judging the efficacy of each system in protecting the rights of its citizens. The article concludes with a proposal on how to best structure the tax system to maximize taxpayer rights with an optimal collection strategy.

The authors start with the United States tax system and describe the process in detail; however, for the sake of brevity, we will note only the highlights. The collection of taxes begins with a volunteer assessment except when taxpayers fail to file a return, in which case the government will ultimately prepare a return for the taxpayer. After voluntary assessment, or an assessment that is the result of an examination, IRC Section 6303 requires the IRS to send a “Notice and Demand” letter within 60 days of the assessment, alerting the taxpayer that the collection process has begun. If the taxpayer has taxes owed, the letter states the amount of tax owed and requests payment within 10 days.

IRS collection alternatives provide debt relief for those taxpayers who are unable to pay. Collection alternatives include Currently Not Collectible status, Offer in Compromise, and installment agreements. Additionally, taxpayers can seek relief from all debts through bankruptcy by obtaining a discharge of taxes which have grown old. There is also the option of postponing and restructuring the payment of the taxes in the Bankruptcy Code’s reorganization chapters.

The Taxpayer Bill of Rights plays a large role in ensuring that IRS collections is fair and just. It mandates that taxpayers have the right to be informed and the right to pay no more than correct amount of tax. The IRS often falls short of honoring these rights. A few ways the IRS falls short is by sending taxpayers notices that are difficult to understand, by providing account transcripts that are difficult for taxpayers to read, and by failing to have adequate staff available to answer taxpayer questions about tax debt collection. To address this, the authors propose having “the IRS send taxpayers an account transcript with the annual statement of outstanding liability” and also “having an adequate phone presence with properly trained assistors who can explain the account transactions, which would ensure that taxpayers will have the opportunity to learn the basis of their liability when questions arise.” Such measures would help to ensure that taxpayers who cannot afford representation have as good a chance of obtaining a good result as those taxpayers who can afford representation. Not all taxpayers receive the same treatment when they owe taxes. Sometimes, there is discrimination of taxpayers based on who they work for, such as “encouraging” government employees to pay their federal taxes. However, doing so removes fairness from the system.

Through the Taxpayer Bill of Rights, the U.S. has tried to systematize the procedural rights of taxpayers around the world. However, due to the many differences and complexities between countries, systemization is somewhat difficult as there is great divergence in the various tax systems. The authors compare the U.S. tax system to solutions in the field of tax debt enforcement in the UK, Australia, Germany, Croatia, and Switzerland, analyzing the tax mechanism in those countries and what the U.S. can learn from them.

 

Switzerland

Unlike the U.S., where taxation is generally centralized in the federal government, there is a high level of decentralization in the Swiss tax system in that the Swiss regional entities— cantons—can implement their own taxes and their own measures of tax collection.

By relying on preventive distraints, the Swiss tax law has a developed system to prevent tax collection default. Preventive distraints can be voluntary and involuntary. Voluntary distraints exist “with the consent of the taxpayer pursuant to a compromise agreement between the taxpayer and the tax authorities.” On the other hand, an involuntary preventive distraint can only occur under certain circumstances defined by law such as “where the taxpayer has no permanent residence or headquarters in Switzerland, and where the tax authorities have objective reasons to believe that it may not be possible to collect the tax.” The term “Sicherungsverfügung” describes the administrative act that contains the reasoning of the taxing authority and the measures to apply. If the taxpayer fails to pay on time, taxing authorities utilize a preventive distraint, which permits them to take possession of “property of the taxpayers valuable enough to satisfy the tax liability, including any interest and penalties, while title to the property remains with the taxpayer.”

As far as tax debt forgiveness, there is a unified system to regulate forgiveness of federal taxes. The procedure begins with the taxpayer’s request. “If the tax authorities agree to settle the debt, they can decrease, forgive or defer the debt and as mentioned above, if they deem necessary, include a voluntary preventive distraint as requirement.”

Regarding taxpayer rights, there are few guidelines published for taxpayers and they only briefly touch on taxpayer rights. Generally, most taxpayer rights such as the right to equal treatment, the right to be informed, and the right to challenge the underlying liability, have their basis in the Swiss Federal Constitution (“Bundesverfassung”). The general provision in “article 8 of the Federal Constitution guarantees equal treatment before the law, and article 127 (2) guarantees equal treatment of taxpayers and taxation based on the economic capacity of an individual.” Also, see Article 29 (1) for procedure before a public authority, Article 29 (2), for the right to be heard in any procedure before a public body, and Article 36 (3) for the rule of proportionality. 

Australia 

Similar to the U.S., Australia primarily uses a centralized taxing authority. Regarding tax collection enforcement, if a taxpayer does not satisfy a tax obligation, the taxing authorities file a claim of summons with the court to have the court recognize that the debt is duly owed. The taxing authorities then have several methods for enforcement to seize a taxpayer’s personal and real property to satisfy a liability. Also, taxing authorities can force both corporations as well as individual taxpayers into a bankruptcy proceeding. On the extreme end, if the company [d]oes not pay or enter a payment plan within 21 days, the tax authority can place it into a liquidating procedure, also known as a “wind-up.” If this occurs, a trustee will liquidate the company and assuming sufficient assets exist, the creditors will receive payment from the liquidated assets.”

Also similar to the U.S. tax system, there are many ways to discharge a tax liability in full, including deferral rules, agreements with taxpayers, and special hardship rules. Also, taxpayers can enter into an installment plan, but the decision rests within the discretion of the taxing authorities. If there is hardship, there is a limit on certain individual taxes and duties, requiring that relief “must have a positive effect on the economic situation of the taxpayer; accordingly, a taxpayer who would be insolvent regardless of the hardship release would not be granted tax forgiveness.”

Unlike the U.S. and other countries, Australia does not have a taxpayer bill of rights. Instead, Australia has a taxpayer charter—a sort of bill of rights that taxpayers can expect in their interactions with taxing authorities. However, it is not as comprehensive as that of the U.S. Therefore, Australian taxpayers have scant rights. Three rights of significance in the charter include the right to receive an explanation of decisions, the right to fair and reasonable treatment, and the right for an independent review.

As the authors note “The European Union serves as a supranational body limited to influencing just those areas of legislation of the member states within the competences explicitly transferred to the EU.” Many aspects of European law overlap with tax collection and enforcement. Such overlap results from the EU fundamental freedoms which include the free movement of capital, the free movement of goods, the free movement of persons, and the free movement of services. In this vain, the EU’s laws limit the types and amounts of relief that its member states may provide. Additionally, the EU’s Tax Claims Recovery Act, an enforcement network covering all of the EU, affects how tax compliance is enforced. However, member nations can use their own enforcement mechanisms to collect tax debt. However, because the EU strictly limits debt forgiveness, debt forgiveness is largely the result of state aid.

Germany

The German tax collection system, like the U.S. system, is built around the country’s federal structure. Tax collection is within the competences of the Länder, the German federal states, which agree on an interstate contract, defining the basic procedures of tax collection. Germany has been a stable country economically, requiring little restricting compared to other EU states.

Enforced tax collection in Germany is executed by either the authority that issued the primary tax assessment or by any other tax authority in the country as the result of cooperation rules. Enforcement methods include seizure of personal and real property, forced insolvency proceedings in the case of corporation, and forced property evaluations for individuals. Once an assessment is made, taxpayers have limited options to protect themselves from enforced collection.

However, debt forgiveness is available based on the German Duties Act (Abgabenordung, AO), which “contains the essential material rules of tax forgiveness.” There are two main rules regarding tax forgiveness: a substantive rule contained in section 227 for tax forgiveness in cases defining application of the merits of the imposition of tax, and a procedural rule contained in the interstate agreement called a deferral agreement “Stundungserlass” which addresses forgiveness from a collection perspective.” While tax debt forgiveness is possible for every taxpayer in Germany, and the German system exhibits a good measure equitable treatment for all taxpayers, the German system is very rigid in granting the tax relief. The German Fundamental Law, “Grundgesetz,” the de facto constitution, of Germany has rules that form basis for taxpayer rights, but does not contain rules that specifically apply in matters of tax law.

Croatia

While Croatia has membership in the EU, it is the least developed country analyzed in this article. Despite reforms in recent years, it still has not achieved the efficiency and sophistication of the systems of Western European countries. This likely stems from Croatia’s economic crisis, which results from “a nation-wide high unemployment rate and significant private debt have lead in recent years to a steep increase of tax collection problems. Currently in Croatia, about 8% of the adult citizens and more than 40,000 corporations have blocks on their bank accounts.”

Regarding enforced tax collection, like in the U.S., Croatian taxing authorities in have the right to seize tangible property, funds in bank accounts, and tax refunds. Croatian taxpayers do have to receive notice about their tax debt but not necessarily the right to be heard regarding the tax debt. Only when taxing authorities fail to at least attempt to provide appropriate notice to taxpayers prior to taking collection action do taxpayers possibly have the right to challenge the decision of the taxing authority. Also like in the U.S., Croatian taxing authorities may levy a taxpayer’s salary until a tax debt is satisfied.

Unlike in the U.S., Croatia does not provide for tax debt forgiveness through insolvency (bankruptcy). Therefore tax debts remain on the books until the expiration of the statute of limitations plus four years after the statute of limitations and tax collection is not possible, or until taxing authorities decide to remove the debt from the books. However, pre-insolvency “procedure allows the creditors and the taxpayer to reach an agreement on debt forgiveness, payment plans, potential debt-equity swaps or the transfer of certain property between the taxpayer and the creditors.”

In Croatia, the constitution provides the main source of general tax principles, and in comparison to the other analyzed systems, the Croatian tax system is simpler, aiming to have a system that the citizens can understand. The Croatian General Tax Code (Opći porezni zakon), regulates the fundamental procedural issues for all types of taxes, and contains its own bill of procedural taxpayer rights. Unfortunately, only corporations may receive tax debt forgiveness in Croatia, which leaves individuals, for whom only forbearance is available, vulnerable. This policy promotes noncompliance in individuals, making them likely to work “under the table” rather than voluntarily participate in the tax system.

United Kingdom

Like the U.S., the United Kingdom has a highly developed tax system, based on a federal agency that is responsible for the collection. Also like the U.S., it has a special department for enforcement procedures. Before the taxing authority may proceed with enforced collection, there must be a fixed and determined tax liability and a demand for payment which the taxpayer refuses. Enforcement methods include seizure of income and property as well as initiation of bankruptcy proceedings. While debt relief generally may occur only through a bankruptcy proceeding, other debt relief options include forbearance and installment agreements.

The constitution of the UK is composed of various sources, such as the Human Rights Act of 1998, and the European Convention on Human Rights, which have a very narrow impact in the area of tax law and tax procedure. Instead, the UK has a separate Charter of Taxpayers’ Rights. There are many rights, such as the right to be treated even-handedly, the right to appeal, the right to “be respected,” and the right to have the taxpayer’s personal circumstances considered. UK taxpayers also have “the right to help and support to get things right [which] includes a broad right to information about which taxes are owed and why.”

Conclusions

Not surprisingly, the basis and presentation of taxpayer rights vary among countries. The right to information and equal treatment are generally accepted principles in all jurisdictions. However, “access to information and the right to protest are, albeit present in all jurisdictions, to a certain extent handled differently.” As the authors illustrate, developing a strong tax system grounded in due process is paramount to taxpayer rights. It is vital that taxpayers receive due process prior to enforced collections.

Despite the relatively advanced nature of the U.S. tax system compared to that of other countries, the U.S. system still leaves much to be desired. Even though due process exists, for some taxpayers, particularly low-income taxpayers, it can be inaccessible because the process is so complex. Looking to the German model, the U.S. should consider the “presented civil law model, which grants the taxpayers in most civil law countries a direct remedy against statutes or actions by tax authorities.” Furthermore, while a direct discrimination of a taxpayer would under most civil law constitutions be considered unconstitutional, and therefore such an approach as illegal, the problem in the United States does not lie with the case-by-case discrimination of taxpayers. It rather lies in the inherent discrimination of low-income taxpayers who do not have the same access to information and legal advice, and who therefore depend much more on an efficient tax authority for direction.

The authors propose that “one solution could be a fast-track insolvency procedure which would allow taxpayers to start over after just a few years similar to the solution in the UK. The authors further propose that more collection would be better pursued through regular tax procedure rather than collection enforcement procedures. They also not that a more accurate withholding system could prevent enforcement from being necessary. Additionally, the U.S. should consider reforming the procedures that take place before enforcement, which would help clean up the “complex system of debt forgiveness, information distribution, enforcement and taxpayer protection,” even though these procedures in the U.S. are more developed than those in other countries.

 

 

 

 

 

 

Substantive Rights or Normative Policy? The TBOR’s contribution to federal tax compliance and enforcement

Today we welcome Guest Blogger Christina Thompson. Christina teaches at Michigan State and assists in running the low income taxpayer clinic there. Today she writes about a recent article published that addresses the importance of the Taxpayer Bill of Rights Congress passed in 2015. Her review of this article dovetails nicely with yesterday’s post on the possible uses of those rights in litigation. This is also an opportunity to point out that you can find a discussion of those rights in the National Taxpayer Advocate’s annual reports here, here, here and here. The NTA is hosting the third conference on Taxpayer Rights in Amsterdam in May. You can find out more about that conference here. Les and I will be joining the NTA and Judge Panuthos to talk about taxpayer rights at the upcoming Tax Court Judicial conference at the end of March. The ABA Tax Section is hosting panels on this topic in their upcoming February meeting next week. I suspect we will be talking about the impact of the passage of the rights for years to come. Keith

In Embracing the TBOR (Taxpayer Bill of Rights), Alice G. Abreu and Richard K. Greenstein grapple with the question of whether the TBOR adds anything to the tax code. Their answer is yes – but with qualifications. Instead, Abreu and Greenstein appear to be making a normative argument, i.e., that the TBOR enhances compliance by fostering taxpayer confidence and enhancing the demand for remedies.

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The Value of the TBOR

The authors counter two criticisms of the TBOR: it does not introduce new rights, and does not provide remedies for violation of those rights. It is true that the TBOR does not purport to add rights to the code (or does it? That is one of the questions I will explore later in this post). It gathers taxpayers’ existing rights into one easy-to-understand document. The TBOR was originally championed by the Taxpayer Advocate Nina Olson. In her proposal to Congress, Ms. Olson argued that because the rights already existed elsewhere in the code, there should be no objection to gathering those rights together in a Bill of Rights. Abreu and Greenstein point out that while that argument likely led to a speedy codification, practitioners may have seen it as merely a reminder to the commissioner to do his job. But the authors of this article suggest there is more to it.

The authors give three reasons demonstrating the value of the TBOR: it supports voluntary compliance, it creates a normative basis for enforcement, and it may create new rights.

Supporting Voluntary Compliance

Nina Olson discussed how the TBOR supports voluntary compliance in her 2013 annual report to Congress:

“Taxpayer rights are central to voluntary compliance. If taxpayers believe they are treated, or can be treated, in an arbitrary and capricious manner, they will mistrust the tax system and be less likely to comply with the laws voluntarily. If taxpayers have confidence in the fairness and integrity of the tax system, they will be more likely to comply.”

Abreu and Greenstein list three ways the TBOR can enhance voluntary compliance. The first way is through taxpayer awareness of their rights (and not merely awareness that the rights exist, but also an awareness of how to use them), an essential ingredient in achieving better taxpayer outcomes.

The second way the TBOR enhances voluntary compliance is through the use of the language of “rights.” As the authors pointed out earlier, the TBOR does not create new rights – it is a compendium of rights that already exist in the code. These “rights” come from legal obligations imposed on the Treasury. The use of the word “rights” turns a Treasury obligation into a taxpayer’s entitlement – listing the rights in terms of a Bill of Rights likens the document to the Constitution’s Bill of Rights, giving the TBOR greater legitimacy.

Finally, the TBOR enhances voluntary compliance by allowing the taxpayer to demand procedural justice. It assures taxpayers that outcomes should be fair and just for both sides.

Creating A Normative Basis for Enforcement

After discussing how the TBOR can enhance voluntary compliance, Abreu and Greenstein examine how the rights create a normative basis for enforcement. Even though no remedies are provided, the very fact that the rights exist creates a more welcoming environment for the taxpayer to demand a remedy, i.e., enforcement of enumerated rights. And using the language of positive taxpayer rights, as opposed to mere duties of officials, emphasizes that those rights are connected to procedural protections (and ultimately, justice). Thus, linking the rights to notions of justice means that the failure to enforce a taxpayer right is a failure of justice itself.

Abreu and Greenstein argue that the lack of remedy now does not mean the lack of remedy in the future. Perhaps a future court will see fit to craft a remedy. Indeed, Facebook cited in a district court complaint the taxpayer’s right to appeal an IRS decision in an independent forum. Another taxpayer cites his right to challenge an IRS decision and be heard under §7803a)(3) in his reply to a supplemental brief in US Tax Court. Lawrence G. Graev & Lorna Graev v. Commissioner of Internal Revenue, Docket No. 30638-08 (2017). The authors do not suggest that a remedy is appropriate for every violation, but the rights’ codification allows a taxpayer to demand a remedy.

It is not that the authors see codification of these rights as meaningless or devoid of content, but rather that the TBOR may not add anything new. Their suggestion invites the reader to question whether the TBOR accomplishes what the authors suggest, or if barriers remain between taxpayers and full realization of their rights. And even if taxpayers are aware of their rights as such, one might also ask whether they have a sufficient understanding of their mechanical operation.

The suggestion that the TBOR’s contribution is strictly normative is a fine argument on its own. Indeed, there is reason to think that it is true – both in its description of taxpayer/government relationships and prescription for stronger tax compliance. But the authors appear to reach for more – i.e., assert that the TBOR adds substantive legal rights.

Creating New Rights

Abreu and Greenstein next tackle the idea that perhaps the TBOR does not simply restate rights found elsewhere in the code, but actually creates new rights. The authors argue that the answer depends on how the relationship between the taxpayer and the taxing authority is conceived. Here, the authors set up competing poles for understanding the TBOR’s value. On the one hand, they seem to suggest that the world of tax enforcement/compliance is Hegelian, which is to say, a world of mutual recognition by taxpayers and the taxing authority of their respective rights and obligations. In this world, positive rights are implied by governmental duties and need no separate/affirmative declaration.

At the other end of spectrum, they describe a distinctly American conception of tax compliance and enforcement. That is to say: a world in which the primary ingredient is distrust. In this world, there is no mutual recognition and no rights by implication: the individual requires procedural protection from the levies of government. The government poses a constant threat to individual liberty, and rights must exist to protect from government abuses of power. It is necessarily government over-against the individual, i.e., the taxing authority over-against the taxpayer. Rights are not left to contingency: they must be specifically and affirmatively articulated, in the absence of which the “duties” of the taxing authority are no more than ostensible.  The authors cite Supreme Court case of Richardson as an example: while a government official had the constitutional duty to keep a particular record, that duty did not give rise to a substantive right for the individual. United States v. Richardson, 418 U.S. 166 (1974). Thus, something more is needed to actually confer rights.

The First Amendment, for example, states in part “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” The authors note the absence of a “right” to anything. No positive right is conferred by that language. It restricts the government’s actions – it is a negative obligation. Other rights in the Bill of Rights do not contain the word “right.” The Amendments need ‘something more’ – and Abreu and Greenstein argue the Ninth Amendment is that ‘something more.’ The Ninth Amendment states that the “enumeration in the Constitution of certain rights, shall not be construed to deny or disparage others reserved by the people.” The Ninth Amendment designates the previous eight amendments “rights.” It confers positive rights. Similarly, the TBOR seeks to codify certain rights as positive rights, i.e., not merely implied or based on a negative formulation, but instead actionable as such. In sum: the authors assert the value of the TBOR is that it supports voluntary compliance, creates a normative basis for enforcement, and may even create new rights.

Taxpayer Obligations

The authors conclude by noting that the adopted TBOR does not contain a list of taxpayer obligations. Ms. Olson’s original vision included not only rights but obligations for the taxpayer. The obligations included the obligation to be honest, cooperative, provide accurate and timely information and documents, keep records, and pay on time. Her reason for including them was simple: it put forth a partnership between the taxpayer, advisor, and tax administrator – working together in a balanced and constructive relationship. The obligations laid out taxpayers’ legal obligations but also remind them of what they ought to do. But these obligations did not make it into the final codified language and Abreu and Greenstein give two reasons.

The Failure to Internalize Sharing Norms 

The first reason is our failure to internalize sharing norms. Abreu and Greenstein believe that unlike other areas of law, the norms that define income taxation have not generally been internalized by taxpayers. “Internalizing” means that people develop a psychological need or motive to conform to a set of shared norms. Acting in accordance with those norms is “good,” and acting outside those norms is “bad,” and people follow social norms not only because they want to but because it is consistent with their values.

The authors argue that tax laws are not internalized – these laws seem external, and compliance feels coerced. Public legal norms of tax do not coincide with personal moral norms. The authors use the example of murder. Laws against murder are reinforced by an internalized moral norm against killing. Tax sharing norms are not internalized to the same extent. For example, most people would not voluntarily transfer property to the government if no legal obligation exists. The two social norms involved with tax laws are the sharing of resources (sharing wealth for the public good) and the sharing of private information (sharing information with the government for the collection of tax). Abreu and Greenstein believe Americans are ingrained with notions of private property and privacy, which prevent tax law norms from being internalized.

The Prejudice Against Affirmative Duties 

The second reason is a prejudice against affirmative duties. Put simply, Americans do not like being told what to do. As the authors point out, requiring a person to do something limits liberty more than prohibiting an individual from doing something. Thus, Americans’ sense of liberty militates against affirmative duties.

The authors suggest that the fact that the taxpayer obligations did not make it into the final bill portends the “contentious” relationship between the taxing authority and the taxpayer, which resonates with deep cultural, political, and legal traditions in the US. The focus on rights implies an imbalance in power and infringement of liberty.

In short: The authors link the lack of taxpayer obligations to integral American values.

Conclusion

In conclusion, Abreu and Greenstein believe Ms. Olson accomplished more than she realized. Whether you carry the paradigm of a “cooperative” or “contentious” relationship, the codified TBOR is helpful to both. With increased taxpayer awareness, the TBOR fosters voluntary compliance and may change the taxpayer’s view of the taxing system – in addition to facilitating an environment wherein taxpayers can more readily enforce their rights. Tax professionals should be aware of these rights, help inform the public of their existence and proper usage, and lead the charge in demanding remedies in court for their violation.

 

Housing Law May Provide a Model for Application of the Taxpayer Bill of Rights in Litigation

We welcome first time guest blogger Steve Sharpe, who works for the low-income taxpayer clinic covering Southwest Ohio, including Cincinnati. Steve also has significant experience in housing and consumer advocacy. It’s not unusual for an attorney at a low income tax clinic housed in a legal services organization to arrive in the tax clinic with the type of background Steve possesses rather than a solely tax background. Steve’s cross functional knowledge allows him to provide us with an interesting insight into the importance of the taxpayer bill of rights (TBOR).  

If you read the IRM, you quickly become aware that TBOR is making a difference in tax administration at the IRS in the way it now frames its discussion of many issues concerning taxpayers. You can also find mention of it in GAO reports and TIGTA reports. Since the IRS adoption of TBOR in June of 2014 and its codification in 2015, there has been a debate on whether TBOR will make a difference in case outcomes in litigation. Special Trial Judge Panuthos has mentioned it in a Tax Court case. Facebook mentions it in a complaint it filed in November, 2017, seeking to cause the IRS to allow it the opportunity to meet with Appeals. Maybe over time, other litigants will make more direct arguments about the protections afforded by TBOR and more court opinions will address those protections. Steve provides insight into how TBOR might follow a similar path to an aspirational type of law that exists in the housing arena and provide protections many may not have imagined when TBOR was passed. Keith

As the IRS enters into an intense period of rulemaking and implementation following the passage of the tax overhaul, advocates for taxpayers must be vigilant and ensure that any new rules or other IRS decisions protect our clients’ basic rights.

Advocates will naturally look to the Taxpayer Bill of Rights for guidance, and I suggest we evaluate whether Congress’s decision to codify the Taxpayer Bill of Rights into a statute impacts how the IRS must act. Looking at litigation under Congress’s longstanding national housing policy codified at 42 USC 1441 (hereinafter, the “National Housing Goals”) may be particularly useful and relevant. Under this frame, the Taxpayer Bill of Rights may provide more than general standards and may provide additional legal support for taxpayers challenging IRS decisions, including rulemaking, pursuant to the Administrative Procedure Act (“APA”).

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It is important to note up front that I have not completed a broad survey of recent APA litigation or research into the legislative history for the Taxpayer Bill of Rights. I may be missing something very obvious. The goal of this post is to raise some ideas for people to explore. Obviously, significant research is needed before taking any action.

In 2015, Congress passed the Taxpayer Bill of Rights that were incorporated in 26 U.S.C. 7803(a)(3). The statute codifies basic concepts to ensure that people are treated fairly, pay only the amount of tax they owe, and have the ability address errors, among other things. On their own and divorced from specific procedures, they are important and provide fundamental ideas for the tax system to include.

The impact of the Taxpayer Bill of Rights, however, may reach well beyond overarching goals and should directly impact actions taken by the IRS. This is not an argument without precedent. Rather, the Taxpayer Bill of Rights shares a similar structure with the National Housing Goals, which have been the subject of housing litigation. According to the Taxpayer Bill of Rights,

In discharging his duties, the Commissioner shall ensure that employees of the Internal Revenue Service are familiar with and act in accord with taxpayer rights as afforded by other provisions of this title, including…

26 U.S.C. 7803(a)(3) (emphasis added). The statute then lists the particular rights that the Commissioner must protect when discharging its duties.

Similarly, the National Housing Goals provide directives for federal agencies addressing housing.

The Department of Housing and Urban Development, and any other departments or agencies of the Federal Government having powers, functions, or duties with respect to housing, shall exercise their powers, functions, and duties under this or any other law, consistently with the national housing policy declared by this Act and in such manner as will facilitate sustained progress in attaining the national housing objective hereby established . . .

42 U.S.C. 1441 (emphasis added). As with the Taxpayer Bill of Rights, the National Housing Goals then list specific objectives for housing agencies to attain.

The National Housing Goals have not simply served as lofty goals that lack practical meeting. Rather, Courts have looked to the National Housing Goals in evaluating whether a housing agency has acted appropriately. For example, in United States v. Winthrop Towers, 628 F.2d 1028 (7th Circuit 1980), HUD sued to foreclose on a low-income housing development. The owner of the development argued that the decision to foreclose was not completely committed to agency discretion. Even if there was no law to apply, the owner argued that the agency had to act consistent with National Housing Goals. The court agreed and stated:

In this case the law to be applied includes s 2 of the National Housing Act, 42            U.S.C. s 1441, which contains a detailed statement of national housing objectives, as well as 42 U.S.C. s 1441a, 42 U.S.C. s 1437 and 12 U.S.C. s 1715l (a). Section 1441 specifically provides that HUD shall exercise its powers and perform its duties “consistently with the national housing policy declared by this Act. . . .” This language compels our conclusion that HUD’s decision to foreclose may be reviewed to determine whether it is consistent with national housing objectives.

Id. at 1034-35 (emphasis added). Simply put, the National Housing Goals went beyond providing general standards – the goals impacted review of agency action. As the Seventh Circuit stated, “the language of s 1441 ‘is not precatory; HUD is obliged to follow these policies. Action taken without consideration of them, or in conflict with them, will not stand.’” Id. at 1035 (emphasis added) (quoting Commonwealth of Pennsylvania v. Lynn, 501 F.2d 848, 855 (D.C.Cir.1974)); see also Russell v. Landrieu, 621 F.2d 1037 (9th Cir. 1980); Lee v. Kemp, 731 F.Supp. 1101 (D.D.C. 1989).

The National Housing Goals have specifically limited agency action in rulemaking as well. In United States v. Garner, 767 F.2d 104 (5th Cir. 1985), borrowers with loans from the Farmers Home Administration (“FmHA”), a subdivision of the USDA, challenged the validity of a regulation that prevented the agency from refinancing its own loans. In reviewing whether the agency acted in an arbitrary and capricious manner, the Fifth Circuit noted that

[I]n enacting the section 502 loan program and its amendments, Congress generally intended the Secretary to exercise his refinancing authority in accordance with the goals of national housing policy as defined in the Act. For our purposes, the most important among these is providing government credit to responsible rural borrowers in jeopardy of losing their homes through no fault of their own. See 42 U.S.C. § 1441.”

Id. at 121. After considering the record, the Fifth Circuit held “the government has failed to demonstrate that regulation 7 C.F.R. § 1944.22(a), prohibiting the FmHA from refinancing its own loans, is a product of reasoned decision making.” Id. at 123.

Again, a substantial amount of research is necessary before advocates start raising these issues. That said, advocates should at least consider the impact of codifying the Taxpayer Bill of Rights on the IRS, and the National Housing Goals provide a useful first step.

 

Taxpayer Rights: Measuring IRS Performance

There is a lot to digest in the 2016 National Taxpayer Advocate Annual Report that was released earlier this month. One of the new parts of the 2016 report was the creation of a taxpayer rights assessment, which reviews IRS performance measures and data organized around the ten taxpayer rights embedded in the Taxpayer Bill of Rights. The general idea is to further cement the notions of taxpayer rights into the calculus of good tax administration.

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As the report discusses, this is a work in progress, both in identifying what are the appropriate ways to illustrate IRS performance relating to taxpayer rights and in ensuring that IRS or an outside group can observe and report on those tasks.

The initial assessment compares and reports on FY 2015 and 2016 metrics, including the following:

  • percentage of phone calls to IRS answered,
  • the no change, agreed and non response rate for correspondence, field and office exams,
  • the numbers of e-filed and paper filed returns by preparers and taxpayers directly,
  • numbers of returns submitted through the Free File consortium, by VITA and other volunteer groups,
  • the average days needed to resolve EITC and other correspondence examinations,
  • the numbers of submitted and accepted collection alternatives like offers and installment agreements,
  • and the number of tax clinics and volunteers hours at those clinics.

There are lots of items identified where there was no data available, such as numbers of math error adjustments that were abated, the percentage of taxpayers who felt their issues were resolved after contacting IRS by phone, and satisfaction relating to a variety of Appeals functions.

A taxpayer rights assessment is a great idea. One of the common critiques of taxpayer rights provisions is that in some cases an agency that violates a taxpayer’s rights may not lead to the taxpayer enjoying a specific remedy. No doubt when Congress wants to get an agency’s attention it can be specific in providing a consequence, such as monetary damages or a shift in the burden of proof if a dispute finds its way in court.

Yet the absence of a remedy does not mean that there are no other ways to encourage good agency practice. My research in the ways that agencies interact with regulated parties outside the tax system suggests that softer notions like employee training and mission statements that specifically address aspirational conduct and respect for the rights of those who are regulated can have an impact on rights that agencies should aspire to protect. In addition, transparency surrounding agency performance can influence agency conduct. An annual taxpayer rights assessment has the potential for  encouraging the IRS to do the right thing in the absence of a specific statutory consequence for failing to do so.

I am working on a paper discussing the role of taxpayer rights and compliance. Part of my paper focuses on how IRS metrics on its audits justifiably key in on revenue protected and on important metrics like the percentage of taxpayers who fail to respond to IRS correspondence audits and agree with IRS proposed adjustments. Absent from the equation has been the percentage of taxpayers who following an adjustment understand why in fact their return as filed was incorrect or whether the taxpayer felt that she had a fair shake in presenting information to justify a tax return position or explain why the taxpayer may have taken a position on a return.

To be sure, measuring taxpayer reaction is costly, and IRS has lots on its plate. It seems to me that good administration includes trying to assess more methodically how IRS is doing around the rights that are reflected in the 2014 Taxpayer Bill of Rights. I look forward to this hopefully becoming a regular part of the annual reports and more importantly it becoming inculcated in how IRS thinks it is doing in administering the tax laws.

For our prior post on the 2016 Report generally as well as links to the different volumes of the Report see NTA Releases Annual Report.

Sidebar: Taxpayer Rights Conference

The Institute for Austrian and International Tax Law at WU (Vienna University of Economics and Business) is hosting the second international taxpayer rights conference in Vienna on March 13 and 14. The conference is convened by the National Taxpayer Advocate and is sponsored in part by Tax Analysts. The conference promises to bring together an eclectic group of scholars and tax administrators. Details on the conference can be found here.