From the Press Release:

National Taxpayer Advocate Delivers Annual Report to Congress; Focuses on Tax Reform, IRS Funding and Identity Theft

WASHINGTON — National Taxpayer Advocate Nina E. Olson today released her 2012 annual report to Congress, identifying the need for tax reform as the overriding priority in tax administration. The Advocate also expressed concern that the Internal Revenue Service is not adequately funded to serve taxpayers and collect tax, and identified ways in which this chronic under-funding harms taxpayers and the public fisc. She also found that the IRS is not doing enough to assist victims of tax-related identity theft and return preparer fraud.

• Executive Summary: 2012 Annual Report to Congress
• Complete Report: 2012 Annual Report to Congress

NUMBER ONE Problem:   The most serious problem facing taxpayers — and the IRS — is the COMPEXITY of the Internal Revenue Code (the “tax code”).

Yes, we all know that, but of special interest to many readers here is item number 8.

MSP 8:  The IRS’s Offshore Voluntary Disclosure Programs Discourage Voluntary Compliance by Those Who Inadvertently Failed to Report Foreign Accounts

Update from @Lisa.  Thank you.

MSP 15:  Challenges Persist for International Taxpayers as the IRS Moves Slowly to Address Their Needs

You will want to read the entire thing, but no guarantee that more than one or two Congressman will.

Below is the MSP 8 CONCLUSION:

In conclusion, the National Taxpayer Advocate preliminarily recommends that the IRS:

1. Expand and clarify the Streamlined Nonresident Filing Initiative to encourage all benign actors (including U.S. residents and those owing more than $1,500) to correct past  noncompliance using less burdensome procedures that do not unnecessarily drain IRS  enforcement resources (e.g., expand and clarify who qualifies for it and further explain
who will be deemed to have reasonable cause for failure to file an FBAR).

2. Send “soft” notices to educate persons with foreign accounts about the FBAR and Form 8938 reporting requirements, encouraging them to self-correct inadvertent violations,  as contemplated by the FBAR Compliance Initiative Project and the FBAR Stop Filer Program.

3. Clarify how beneficiaries of Canadian retirement plans can file late or amended returns that elect to exclude undistributed income from those plans by issuing formal guidance to consolidate the seemingly inconsistent guidance provided by Revenue Procedure 2002-23, 2002-1 C.B. 744 (requiring a PLR), IRM 21.5.3.4.9.1 (Aug. 4, 2009) (instructing employees to process late elections), and 2012 OVDP FAQ #54 (requiring a submission to an examiner) in a way that minimizes taxpayer burden.

Below is the MSP 15 CONCLUSION:

In conclusion, the National Taxpayer Advocate preliminarily recommends that the IRS:
1. Make the IITA team permanent, with a formal charter and a responsibility to provide  periodic written reports and formal recommendations to the IRS Services Committee,  including items for the IRS Strategic Plan and Service wide Approach to International  Tax Administration.
2. Develop a systematic and structured plan for implementing the 2012 WIRA Research  Study recommendations and inform the public about the timeline.

3. Reinstate mailing of forms and publications to international taxpayers and U.S. embassies and consulates.
4. Allow electronic filing of 1040NR series and ITIN applications for nonresident alien  taxpayers, at least those not claiming a refund.
5. Develop a method of simplified tax and information reporting online, modeled after the new online FBAR form for taxpayers incurring foreign taxes higher than the U.S. effective tax rate — resulting in no tax liability.
6. Establish a voluntary compliance program for international individuals, including a combination of simplified filing and relief from all penalties for taxpayers who have no liability.
7. Increase the threshold for the Streamlined Nonresident Filing Initiative from $1,500 of  tax due to $10,000.