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Teipen Selanders Poynter and Ayres welcome the 2016 Taxpayer Advocate Report

Posted on May 10, 2017

The IRS should adopt a fundamentally different approach to tax administration. That’s the conclusion of the National Taxpayer Advocate (NTA) 2016 Annual Report to Congress, based on discussions with taxpayers and stakeholders during twelve public forums held around the country as well as on focus groups and nationwide surveys.

In fact, the IRS is planning to revamp its “Future State” plan to adopt a more taxpayer-centric approach. The IRS hopes Congress and the president will emphasize simplification as they consider tax reform this spring.

The IRS report is good news for taxpayers, say Teipen CPAs, noting that voluntary compliance, world-wide taxpayer services, geographic focus and a Taxpayer Bill of Rights are necessary elements of the IRS “Future State.” Also of interest, the report contained a list of the most litigated taxpayer issues along with legislative recommendations.

The report was generated in response to concerns raised in the 2015 report to Congress, which covered the Service’s operations and interactions with taxpayers. The IRS has provided assurances that it will continue to provide and improve telephone and face-to-face services.

The report also addresses the need for the IRS to further incorporate the Taxpayer Bill of Rights into its operations and improve the accuracy of its determinations to avoid significant refund delays for taxpayers.

Significantly, the NTA recommends creating “an environment that encourages taxpayer trust and confidence, changing its culture from one that is enforcement-oriented to one that is service-oriented.” Placing an emphasis on service and trust can increase tax compliance, says the NTA, noting that taxpayers who seek help to comply but do not receive that help are treated as tax evaders.

Tax Simplification

Several areas of tax form complexity that Congress should address were highlighted, including:

  • Repealing the Alternative Minimum Tax for individuals
  • Consolidating the family status provisions in the tax code
  • Consolidating at least 12 incentives to save or spend for education
  • Consolidating at least 15 incentives to save for retirement
  • Simplifying worker classification determinations to minimize employee vs. independent contract disputes
  • Eliminating or reducing tax provisions that expire, thus requiring periodic renewals
  • Eliminating or reducing the gradual phase-out of tax benefits as income rises, and
  • Streamlining more than 170 civil penalties contained in the tax code.

As CPAs, we are pleased with these recommendations, believing that implementing them will help the IRS become more consumer focused while simplifying an overly complex system, and that helps all of us!