TAS has released the 2013 Objectives Report to Congress. Issues specifically addressing us begin on p 21 and end on p 31.
Given we have just become aware of IRS’ new program for “low risk” filers, this report suggests TAS is having an effect on IRS policy.
I have omitted discussions and footnotes and just listed the major sections so we can begin to examine them.
 F. TAS Will Continue Advocating for American Taxpayers Abroad Who Are Expressing Fear and Frustration about FBAR, FATCA and Other International Penalties …
The National Taxpayer Advocate remains concerned about the apparent lack of clear procedures and transparent published guidance in the Internal Revenue Bulletin (IRB) that describes and reaffirms the taxpayer-favorable procedures provided by IRM regarding the application of these penalties to “benign” U.S.taxpayers abroad. …
 In early December of 2011, as the Annual Report to Congress was en route to the printer, the IRS posted a fact sheet on its website making clear that it would apply a “reasonable cause exception” when imposing penalties for non-willful failure to file an FBAR.In late December, the IRS also issued temporary regulations implementing FATCA reporting requirements for individuals and released the final version of Form 8938, Statement of Specified Foreign Financial Assets.
The National Taxpayer Advocate commends the IRS for releasing the fact sheet and establishing higher FATCA reporting thresholds for U.S.taxpayers abroad. …
However, she remains concerned that the fact sheet does not have the same level of authority as changes made to the IRM itself or items of guidance published in the Internal Revenue Bulletin — and the IRS itself would be the first to point out that taxpayers generally cannot rely on fact sheets and press releases. …
 In FY 2013, TAS will address these concerns and continue advocating to alleviate burden for U.S.taxpayers abroad by eliminating duplicate FBAR and FATCA filings and providing formal guidance on filing compliance for non-resident U.S.taxpayers. We look forward to working with the IRS on future formal guidance for these taxpayers and will report to Congress on the results.
Specifically, the National Taxpayer Advocate has recommended the IRS future guidance follow these general principles:
Achieving certainty for both the affected taxpayers and the IRS in the context of FBAR and information reporting compliance …
Publishing a full and complete description of international compliance regimes in the Internal Revenue Bulletin.
-  Requesting comments from the public and tax practitioner communities. …
- Developing procedures tailored for different groups of noncompliant taxpayers. …
 Category 1. Full relief from FBAR and information reporting penalties. …
 Category 2. Taxpayers who have reasonable cause or acted non-willfully. …
Category 3. Taxpayers not included in category 1 or 2. …
 G. TAS Will Continue to Advocate that the IRS Modify the Offshore Voluntary Disclosure Program so that People Who Made Honest Mistakes Can Correct them Without Fear of Excessive Penalties …
 H. TAS Will Work with the IRS on Improving Taxpayer Service Options for International Taxpayers and Alleviating Their Compliance Challenges …
Bravo Nina Olson! I concur with Just Me, she should definitely be the one to replace Shulman.
Replace Shulman? She should be president! Someone who has been able to gather so much information about so many complex issues (not just related to Americans abroad), identify the real roots of the problems, listen and sympathize with people, criticize based on facts and reasoning patiently and without sounding harsh, and in the end come up with clever solutions that are better for everyone, certainly has the skills to lead the country. She truly excels at her job, and I wish more people would know about her.
The National Taxpayer Advocate is not allowed to have another position within the IRS for two years before or five years afterwards (http://www.brynmawr.edu/alumnae/bulletin/olson.htm). The idea is to have someone really from outside the IRS as the advocate, but this also means that Nina Olson cannot become the IRS Commissioner any time soon.
I agree with you wholeheartedly – she does truly excel.
While I would love to see it happen, I wasn’t speaking seriously, we all know doing something that would make sense or be the best choice, would not even be considered. 🙂
Shaddow Raider is right, as I discovered last night in my reading, by law, she can not be considered for the position. There is a 5 year prohibition on her ability to be considered for an IRS position.
I just finished reading a very good report on the NTA, (TAS) and recommend it to those that have an interest in the history of the position, and the internal conflicts that the NTA has to negotiate to effect change within the IRS and still be a strong advocate for the Tax payer. Nina’s role has been well chronicled, and my impression remains favorable, even with some of the flaws within the Statutes that created this pseudo independent organization with the IRS. This is well worth your read, I think…
What Good Is the National Taxpayer Advocate?
*@ Just Me,
Thank you so much for posting this article. I have just read it and it is really excellent. I know this may sound a bit odd but as my tax class progresses, I am fascinated, in general by how all of this works. It would take a lifetime to get a true hold on it but it does/has influenced my perception of the mess we’ve all found ourselves in and it’s nice to see another positive as I “morph.” The first positive being this blog!
I had no concept of automation as being a main component of the tax process in general and though it has been brought up here many times (not the least of which, the time I received a computer-generated letter indicating that I would receive a “failure to file” penalty even though I owed no tax and no amount was indicated on the letter). How interesting to realize automation is intimately linked to the origin of TAS. I like the balanced approach of this author, as to constantly see the IRS in only a negative way ( not he but the general public, including most of us), does not serve our situation particularly well and he, in the same way he praises Nina, manages to get one to understand that for all the faults, IRS has a very difficult job. I am not trying to excuse them, it will take me a long time to forgive the utter lack of commen sense and humanity as they administered OVDI. I will not forget the four months of utter terror and tension I felt as I tried to come to terms with the idea that they could seize our retirement funds. For failing to file a piece of paper. And those funds having been produced by a Canadian (my husband, not a USC) in Canada, a separate and soveriegn nation. It will take decades to repair the damage they have done.
That aside, I continue to marvel at Nina Olson’s ability to do her job and I so enjoy her use of the word “creative.” How refreshing to see the exact opposite of some of those who continue to think they can come after us without any regard for our well-being. I agree totally with Shadow Raider – she should be POTUS!
Be sure to read Jack’s blog and comments there too..
Also a broader discussion of this report at Accounting Today.. (offshore issues just got a short mention, and I added a comment.)
National Taxpayer Advocate Sees 2013 Filing Season ‘At Risk’
*definitely will look at Jack’s blog in a bit, gotta go out
I forgot my PS from previous comment:
Are you going to read this? (from footnote, 1st page of Camp’s article):
“Those masochistic enough to want more details about the inquisitorial ….
:Tax Administration as Inquisitorial Process and the Partial Paradigm Shift in the IRS Restructoring and Reform Act of 1998″….Those who survive who survive that article
Camp certainly has a sense of humor, as does my tax prof……makes it all the more interesting!
@All, the NTA’s June 2012 report http://www.taxpayeradvocate.irs.gov/ is well worth reading, as it makes specific recommendations to stop using the current one size fits all approach to enforcement and compliance options re those abroad, and details several distinct categories – making distinctions between different classes of taxpayers abroad who have different facts and circumstances. She notes the confusion and conflict created by multiple changes to the VD FAQs, and the fact that although the IRS points taxpayers to those pages, she notes (again) that they generally do not have the force and authority that they would if they were in the IRM. Her recommendations are considerably more nuanced and thoughtful that what we have seen and experienced in discussion of taxation of those ‘abroad’. One of the TAS priorities identified is to continue to advocate on issues that impact taxpayers abroad. We owe Nina Olson much thanks for identifying problems and proffering detailed and well-reasoned solutions – and bringing it to Congress and the IRS attention. It is insane to have a system in which an ordinary person owing no US tax cannot figure out how to fill out the forms with confidence, and how not to make an error that would lay waste to their family’s assets. It is insane to have to pay expensive specialists to keep up with and interpret arcane rules and continual changes – all of which only get more complex.
If the reporting for those of us abroad is not meant to produce penalty revenues in lieu of (most often) zero US tax liability, then it should be changed to make that the outcome. If not, then the US is deliberately creating a hidden tax structure by creating complexity, hazards and jeopardy in order to make up for what the FEIE and foreign tax credits lawfully exclude (however imperfectly depending on what country you’re in – and the terms of it’s tax treaty with the US – if any).
The report also underscores the growing size of IRS problems with identity theft domestically. The planned scope of FATCA, plus the efforts to collect more FBAR and other ‘information’ reports makes those abroad vulnerable in additional ways which the US residents don’t face in terms of the extra types of information we must provide. I haven’t seen anything which addresses the identity theft problem that the IRS is grappling with that acknowledges how that might affect those with international reporting – or what they might do to prevent it.
Thanks for posting the link, don’t know why I didn’t do that.
Yes, your last paragraph, this came up here recently (can’t remember which post it was); the prospect of not only identity theft but the almost certain lack of coordination between departments (FBAR, IRS, and the factions within) promise a truly horrible nightmare.
There is also a kafkaesque scenario when above-mentioned article (Camp) describes how the automatic system works and how that doesn’t work for taxpayers. Will try to find it.
*What Good Is the National Taxpayer Advocate?
By Bryan T. Camp
“Historically, if an IRS employee saw that a taxpayer’s return did not match an information return, or if an experienced reviewer in the local office saw a deduction that was out of line and needed explanation, the employees would write the taxpayer a letter to explain the questionable income or deduction item. Sometimes that occurred during returns processing and sometimes it occurred afterward.
Now, however, that function has been almost entirely automated.The following official description of this program could apply equally well to all these computerized interactions with taxpayers:
Automated Correspondence Exam (ACE), formerly Batch Processing (BP) is an IRS-developed, multifunctional software application that fully automates the initiation, Aging and Closing of certain EITC and non-EITC cases. Using the Batch System, Correspondence Exam can process specified cases with minimal to no tax examiner involvement until a taxpayer reply is received.Because the batch system will automatically process the case through creation, statutory notice and closing, tax examiner involvement is eliminated entirely on no-reply cases.
Once a taxpayer reply has been considered, the case can be reintroduced into Batch for automated Aging and Closing in most instances.The most important effect of automation on tax administration is the substitution of operational presumption or individualized decision-making. For example, taxpayers whose Forms W-2 do not match their employer’s Forms W-2 are presumed to be noncompliant unless proven otherwise.”
What amazes me most is: Two people working for IRS essentially have access same information (i) IRS commissioner is using threats and coercion to illegally extract money in subversion of IRM and (ii) Nina Olson is fighting against injustice and try to defend the IRM.
Mr. Commissioner, it is reasonable for dual-citizens to have accounts in their countries and it not un-reasonable that they don’t know about FBAR, because they have been living in foreign land for many many years and may not even visited the USA over a decade. Many of the tax experts living in the USA don’t know about FBAR until 2009, how could a foreigner know about it?
Mr. Commissioner, you and Miss. Olson have access to the same information. Who is reasonable? Who is willfully violating the IRM?
All the while the Commissioner touts the ill-gotten gains with pride and deception.
Further to the problems of automation, suggestions of what to do when notices from IRS start coming :
Claudia Hill “IRS Notices and Letters: It’s Stop the Machine Time Again”
Here’s a checklist for the next time you find an IRS notice in your mail: