Taxpayer advocate calls for IRS overhaul
Filed under: Tax, Consumer Complaints
Nina Olson is the head of the Taxpayer Advocate Service, a supposedly independent branch of the IRS charged with helping taxpayers resolve disputes with the IRS, and come up with ways to improve the way the system works for us.In her latest annual report on ways the tax code is and isn't working, Ms. Olson had this to say "The most serious problem facing taxpayers is the complexity of the Internal Revenue Code. The only meaningful way to reduce these burdens [of compliance] is to simplify the tax code enormously."
She adds that "Taxpayers who honestly seek to comply with the law often make inadvertent errors, causing them either to overpay their tax or to become subject to IRS enforcement action for mistaken underpayment of tax. [However,] sophisticated taxpayers often find loopholes that enable them to reduce or eliminate their tax liabilities."
She also laments the huge amount of time and money that people must spend on filling out their taxes and complex forms and computations make it difficult for people who would qualify for the Earned Income Tax Credit to qualify for it.
Steve Forbes suggests that President Obama should respond to the report by moving toward a flat tax system but concedes that that won't happen.
Whatever the solution to the current IRS nightmare is, Obama should make a priority of finding some way to simplify the tax code. Freeing up people's time to work and earn money instead of calculating tax liability would be a great long-term economic stimulus.
Reader Comments (Page 1 of 1)
3-21-2009 @ 7:08PM
Taxpayer_Owner said...
Sure Ms. Olson has talked about the IRS’s shortcomings, ruffled a few feathers, and wrote some tough reports. Unfortunately, Ms. Olson has not been able to get very much accomplished in her seven years on the job other then create a high employee turnover rate. She tried to simplify the tax code by creating a standard definition of a child. When all was said and done, she only made matters worse. So much worse, the law had to be amended.
Ms. Olson also destroyed the very program in the IRS that was set up to assist taxpayers. Before Ms. Olson, if you needed help with a tax problem that was not dealt with satisfactorily through normal channels the IRS would transfer your case over to a group that had the experience in your particular issue and the authority to fix your problem on the spot. Ms. Olson has forsaken this logic. Now if you need help and your case is transferred over to her program it will most likely be assigned to someone that is not experienced or even properly trained to assist you. Moreover, even if the employee understands your situation they will not be able to fix it. They will have to turn around and request the IRS to fix it. Not only is this a poor way to assist taxpayers it also costs taxpayers more money.
The Taxpayer Advocate’s office has an important role of advocating for all taxpayers. While Ms. Olson does an adequate job of this, she does not advocate very well for the individual taxpayer who comes into her office for assistance. For that reason, her employees that work with taxpayers should be reassigned back to the IRS where they will be better trained and better able to quickly assist taxpayers in their moment of need.
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3-23-2009 @ 11:01AM
BABS said...
First of all I wouldn't trust Obama with anything. Secondly, he's the one who nominated Geithner as the Scy of the Treasury. Geither is guilty of tax evasion, lack of honesty, lack of integrity and lack of respect for truthfulness. He not only EVADED paying taxes but he also harbored a foreign citizen who was in the United States on a Visa which had EXPIRED. Additionally, he purposely avoided paying the required taxes on this employee (nanny taxes). A serious precedent was set by placing an individual in a very high position who is an obvious LIAR and CHEATER and he even went so far as to claim deductions for child care when he knew he did not qualified for it due to his large income. Why would anyone trust Geithner and/or anyone in the IRS to help us our with our tax issues? IRS should be disbanded and we need to go with the "Fair Tax."
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4-03-2009 @ 2:46PM
Patriot said...
I'm afraid overhaul is not enough. I've been fighting for
justice against what amount to taxpayer abuse. I had an
IRA distribution 3/2004, filed a 1040x for 2003 with the
help of an IRS expert and paid the taxes 5 years ago. The
IRS came back a year later and requested that I change the
tax year from 2003 to 2004. I complied the next thing I get
is a tax bill for 2004 with no withholding or taxes paid credits.
I heard somewhere that IRS agents or subcontractors get
commissions for finding taxes due. Someone pushed the
collection process button, put a notice and my credit is on
hold and they have withheld 06, 07, 08, 09 refunds and the
economic incentive payments. Five and half years later a local
examiner and his boss find that a full refund is due, but the higher
ups have decided that there is a tax law that credits older than
2 years don't apply and only a partial refund is due. I'm penalized
for paying my taxes on time. My delay in the whole 6 years
was about 1 month.
The whole IRS is designed for collection, next to zero incentive
to help the taxpayer who pays their salaries.
The Fair tax (http://fairtax.org) not only eliminates this kind of
mess but
o eliminates income & investment taxes
o encourages return of offshore investment capital
o workers take home a full pay check
o only new purchases are taxed
o taxes spending form legal and illegal sources
o taxes wealthy visitors shopping in the US
o but it removes power from congress and lobbies
Good bye TurboTax after all these years. Tax accountants
and lawyers can get real accounting jobs and collection agents
can surely find a job with the Credit Card Companies.
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