The National Taxpayer Advocate released her Annual Report yesterday. The report is broken into three main volumes.
Volume 1 follows the general approach of past reports with a discussion of most serious problems, legislative recommendations and most litigated issues. Given the NTA’s laser-like focus on IRS plans to build the so-called Future State, much of the discussion touches on issues relating to IRS plans to modernize tax administration. In a Special Focus to Volume 1, the NTA “has attempted to identify and make recommendations to address the challenges the IRS faces to become a 21st century, taxpayer-centric tax administrator.” Volume 1 also has a discussion of IRS performance relating to taxpayer rights, a section I am looking forward to reading and a welcome addition to IRS performance metrics.
Volume 2 contains TAS research and related studies. There are five studies in the volume, including discussions of taxpayer service among differing ethnic groups, the impact of educational letters on potentially noncompliant individuals, IRS use of financial analysis in installment agreements, a call for IRS to better use internal data to determine collectability of taxpayers, a discussion of collection issues facing business taxpayers.
A new part of the report is in Volume 3, which contains literature reviews on taxpayer service in other countries, incorporating rights in tax administration, behavioral science, geographic considerations for tax administration, customer considerations for online accounts, alternative dispute resolution options and ways to reduce false positives in fraud detection.
For those looking for the Cliff Notes version there is an executive summary that summarizes the main issues.
I have previously expressed my admiration for the NTA’s reports. The reports are a major contribution to tax administration. I have not had time to work through materials but the Special Focus on Future State in Volume 1 is a good place to start for those interested in the prospects of tax administration reform. In the past year the NTA has convened a series of public forums to gain insights in taxpayer preferences and challenges. Applying her considerable experience with IRS and using insights from those forums, the NTA has attempted to provide a blueprint for best practices that Congress and IRS should keep handy as IRS crawls into the 21st century.