The National Taxpayer Advocate (NTA) annual report to Congress cites the primary issues taxpayers are facing to be the harsh collection techniques used by the IRS and calls for a need to reform tax law. Every year, the Tax Code mandates the NTA’s report to address the most critical changes needed. This report to Congress is intended to lessen the problems that taxpayers encounter.
Nina Olson, the NTA in 2011, pointed out that tax reform was the utmost pressing issue for tax administration. The NTA also mentioned that the latest IRS data indicates that taxpayers are spending a stunning amount of time annually—upwards of 6.1 billion hours per year—on efforts to adhere to filing compliance. As Olson put it, “If tax compliance were an industry, it would be one of the largest in the United States. To consume 6.1 billion hours, the ‘tax industry’ requires the equivalent of more than three million full-time workers.”
Additionally, the NTA discussed growing concern about the rise of the IRS’s “severe” actions of enforcement. Olson claims this is putting strain on taxpayers. According to the report, the IRS’ efforts to collect are ineffective at their goal to institute sustained taxpayer compliance due to the supposed harsh techniques currently being implemented.
One key area cited that the techniques on filing protected liens against has risen to well over a million taxpayers—that compared with only 168,000 IRS tax liens in Fiscal Year 1999. It has risen to an astounding 550% since that time. The number of IRS liens filed is growing at an increasing pace as well. This may contribute a detrimental effect onto the housing market, credit ratings, and the unemployment rate.
Since 2001, Nina Olson has been the NAT (National Taxpayer Advocate). Her work is executed on in service to the TAS (Taxpayer Advocate Service) and is overseen by the Commissioner of Internal Revenue (currently Doug Shulman). What are your thoughts on these figures and reports?