Nina Olson: Taxpayers' Voice at the IRS

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Nina E. Olson is the IRS's National Taxpayer Advocate. Since 2001, she has led the Taxpayer Advocate Service (TAS), a nationwide organization of approximately 2,000 taxpayer advocates who help U.S. individual and business taxpayers resolve problems and work with the IRS to correct systemic and procedural problems. In this capacity, she reports to Congress annually on the most serious problems taxpayers face in dealing with the IRS and proposes solutions. Recently, she took time to talk to JofA Senior Editor Paul Bonner about her work with TAS and taxpayer issues, especially those of taxpayers represented by CPAs.

Bonner: For taxpayers represented by CPAs who come to TAS with their problems, what can CPAs do to help their clients' chances of getting a favorable outcome? Olson: About 35% to 40% of our cases have representatives. In fact, Congress anticipated and wrote into the law, in Sec. 7811, that one of the definitions of a significant hardship [for which the Office of the Taxpayer Advocate may issue a taxpayer assistance order] is where the cost of representation in a particular issue is great and would incur a significant hardship. You can see that happen where a representative is trying to solve a problem by staying on the phone with the IRS and running up billable hours. If it's a simple problem that isn't getting resolved, then, of course, they should go to the Taxpayer Advocate Service.

And then we have others, I have to say, that once they get through to TAS, their case advocate is their new best friend. They get that case advocate's number, and they come to them for every single problem. We are a resource for you, but it's a limited resource, and people should exercise their judgment as to whether it's necessary.

Bonner: What kinds of issues should taxpayers and representatives come to you with?

Olson: We see very simple cases where there's just no one at home at the IRS who will engage with the CPA to hear the facts, to hear what needs to be done. And we also see a lot of what I call the "not my job" syndrome, where the CPA knows precisely what needs to be done to correct this account; they have all the information that makes it very clear why this account needs to be adjusted, and yet there's no one in the IRS who will accept responsibility for doing it because it requires this function to do this little thing and another function to do another thing. That is precisely the kind of case that you should go to TAS about, because then we operate as the traffic cop, and we'll stick with the case and get it all the way through.

And then we have cases on which there is a fundamental disagreement, whether on the facts of the case, the law, or its application to the facts. First, we try to exercise independent judgment. Once we can figure out with the taxpayer or the taxpayer's representative or CPA what we think is the right answer in that case, we should be advocating that answer, and that means taking it all the way up the chain. A lot of these are cases of first impression, where the IRS has a general rule, and you're trying to fit a set of circumstances to the general rule, and it doesn't fit. So you have to come up with a new rule or an exception to the general rule, knowing that the front line of the IRS isn't necessarily going to tackle that one. It's going to unfortunately have to go up a chain. That's fine, as long as we're doing our job, as long as we're advocating for what we think is the right answer, not walking away from it, and saying, "Well, the IRS says this, and there's nothing more we can do." Until it lands on my desk and until the commissioner has overturned what I say, there's always something more we can do.

Bonner: Haven't you had to restrict the kinds of cases you can accept in recent years, just to deal with caseloads? Olson: We went through several really difficult years going up to 2011, where between the economic stimulus payment, making work pay credit, and first-time homebuyer credit, our inventories for the first time reached 300,000 cases. …