National Taxpayer Advocate Recommendation. In light of the IRS’s unique role as the federal revenue collector, the National Taxpayer Advocate recommends that Congress develop new budget procedures designed to fund the IRS at a level that will enable it to meet taxpayer needs and maximize tax compliance, with due regard for protecting taxpayer rights and minimizing taxpayer burden.
TAXPAYER BILL OF RIGHTS
The report urges Congress to codify a Taxpayer Bill of Rights that would clearly list the major rights and responsibilities of taxpayers. “The U.S. tax system is based on a social contract between the government and its taxpayers,” Olson wrote. “Taxpayers agree to report and pay the taxes they owe and the government agrees to provide the service and oversight necessary to ensure that taxpayers can and will do so.”
Most Taxpayers Don’t Know Their Rights. Over the past two decades, Congress has enacted three significant taxpayer rights’ bills, but the number of bills and the lack of publicity have muddled the message. The report describes a recent taxpayer survey in which 55 percent of respondents said they did not believe they had rights before the IRS and 61 percent did not know what their rights are.
“I believe taxpayers and tax administration will benefit from an explicit statement of what taxpayers have a right to expect from their government and what the government has a right to expect from its taxpayers,” Olson said.
10 Taxpayer Rights. The report recommends that Congress organize taxpayer rights under the following ten broad principles: (1) right to be informed; (2) right to be assisted; (3) right to be heard; (4) right to pay no more than the correct amount of tax; (5) right of appeal; (6) right to certainty; (7) right to privacy; (8) right to confidentiality; (9) right to representation; and (10) right to a fair and just tax system.
5 Taxpayer Responsibilities. To help taxpayers understand what the law requires of them, the report further recommends that Congress organize taxpayer responsibilities under the following five principles: (1) obligation to be honest; (2) obligation to be cooperative; (3) obligation to provide accurate information and documents on time; (4) obligation to keep records; and (5) obligation to pay taxes on time.
The report summarizes recommendations the Advocate has made in past reports to create additional taxpayer rights and recommends that those rights be incorporated into Taxpayer Bill of Rights legislation. “It has been 13½ years since we have had major taxpayer rights legislation,” Olson wrote. “Our laws have not kept pace with our notions of procedural fairness in 21st century tax administration, particularly given our tax system’s expanded and diverse taxpayer base and duties.”
Thanks for posting this Calgary 411. What I like most about the report is that it demonstrates the need to go back to taking actions that make sense; putting an end to the needless complexity created by a system that needs a major clean-out.
Odd how the IRS is so “out there” they actually reinstate the OVDI with the riders that they can change the penalties whenever they like as well as when the program closes. Come on. How many of the above rights does that violate…..at the very least
(1) right to be informed
(3) right to be heard
(6) right to certainty
(10) right to a fair and just tax system
Thanks for summarizing these points for those who don’t have the time to read the entire thing, although we should anyway!
Boy, that is really good. Thank you for the post.
Big issue, of course, is that this would require Congress to fund the IRS well enough to be able to provide good service.
Another story this evening on Marketwatch…
TAXING TIMES Archives
Jan. 13, 2012, 4:20 p.m. EST
Watchdog chides IRS on offshore amnesty program
http://www.marketwatch.com/story/watchdog-chides-irs-on-offshore-amnesty-program-2012-01-13?link=MW_latest_news
http://www.taxpayeradvocate.irs.gov/Media-Resources/FY-2011-Annual-Report-To-Congress-Full-Report
Links to all sections of TAS full Annual Report to Congress, which include the following (if anyone wants to review the whole thing).
Executive Summary
IRS News Release
Preface & Table of Contents
The Most Serious Problems Encountered by Taxpayers
Most Serious Problem #1: The IRS Is Not Adequately Funded to Serve Taxpayers and Collect Taxes
Revenue Protection Issues
International Issues
Diversity Issues
Compliance Issues, Tax Administration Issues, Status Updates
Legislative Recommendations
The Most Litigated Issues, Case Advocacy, Appendices
Volume 2: TAS Research and Related Studies
National Taxpayer Advocate’s Blog
The Taxpayer Advocate Service report to the US Congress is critical of the complexity and punative nature of US tax law as it applies to US citizens residing abroad. Page 154 of the report compares the average cost to prepare returns for taxpayers residing in the US and those residing abroad.
For taxpayers residing abroad return preparation can cost $1,000 to $2,000 PER RETURN (the report cites two separate studies). For taxpayers residing in the US return preparation ranges from $173 and $373 per return. This is a shocking disparity on its face, however in reality it typically much worse.
What the TAS Report doesn’t mention (at least not in the section referenced above) is that US citizens residing abroad typically must file many more returns per year than the typical taxapayer residing in the US. For example, if you have an interest in a trust, partnership, private corporation, etc. you have ADDITIONAL returns to file for each. This multiplies the annual compliance cost accordingly.
Yes, how does a 200 page return sound vs. a 16 page UK self assessment tax return?? It’s madness but keeps my accountant in a job I suppose 😛
Good write up here over the TAS / IRS “dust up”
From twitter…
FBAR_Compliant
Don’t sign that closing agreement yet! #TAS says some offshore account FBAR penalties are too high bit.ly/zK86kS #TAX #FBAR #Expat
FBAR_Compliant
#WillShulmandotherightthing? 10 days left to affirm Tax Advocacy Directive to treat Minnow Expats & Immigrants fairly bit.ly/zQNxlS
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RT @globaltvnews ‘Overwhelming’ U.S. tax rules affecting many in Canada too complex to obey, IRS watchdog warns Congress http://t.co/8OFFzfmU
Thanks for the update
Great to see this getting some additional media. We need a one stop shop for links to recent news stories like this, so you can come back to them quickly.. I will tweet that too.
BTW…. It is now 7 days left for Shulman to make his decision on the TAD.
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