The Taxpayer Advocate and the Problem Resolution Program - the impact of TBOR2.

Several provisions of the Taxpayer Bill of Rights 2 (TBOR2), signed by the President in July 1996, had an immediate impact on the Office of the Taxpayer Advocate (TA) and the Problem Resolution Program (PRP). While a number of provisions of TBOR2 had already been implemented by the IRS administratively prior to the bill becoming law, other provisions had the effect of enhancing both the status and the responsibilities of the TA's office and the PRP. The change in the title of the position from Ombudsman to TA has to be viewed as more than a cosmetic change. The ombudsman's role, from a traditional perspective, has been one of a neutral party who provides assistance to those seeking redress, by investigating problems and mediating or recommending solutions, but generally lacking the authority to impose organizational solutions. An advocate, on the other hand, is generally expected to take a more proactive stance in serving the needs of the public. In the case of the TA, this means serving as a strong voice for the taxpayer within the agency. While the Taxpayer Ombudsman and PRP have always served as an advocate and voice for taxpayers, TBOR2 now provides some additional tools.

One of those tools is the TA's Report to Congress. Actually, two reports are required by the legislation. The first, due in June of each year, is to contain the objectives and activities planned by the Office of the Taxpayer Advocate (OTA) for the next calendar year. The second report, due December 31 of each year, is far more substantial in content and importance, because it covers the accomplishments of the OTA for the previous fiscal year. This report will contain specific information required by TBOR2, including a summary of the 20 most serious problems encountered by taxpayers, recommendations for administrative and legislative solutions to those problems, the response by the Service to those recommendations and other IRS efforts undertaken to address systemic deficiencies.

Since the passage of TBOR2, I have had the opportunity to testify before Congress and the IRS Restructuring Commission on the role of the PRP and my office and on my initial report to Congress. I have also addressed a number of professional stakeholder organizations, both in Washington D.C., and at local, state or regional meetings across the country. While the primary mission of the PRP remains to assist taxpayers in resolving problems and then to work towards correcting identified systemic deficiencies, Congress has made it clear that it is looking to my office, with assistance provided by our field advocates, to be more active in identifying legislative proposals to address some of the long-standing concerns of the taxpaying public.

To assist in this effort, my office planned a series of taxpayer focus groups during May and June in five locations: Baltimore, Phoenix, Austin, Tampa and Buffalo. We also plan to conduct a number of open discussions with various stakeholder groups as to their perceptions of the problems taxpayers face with the Service and their thoughts on dealing with those issues. These activities will provide more of an external perspective to the next Advocate's Report, an element that was largely missing from our initial effort. This information win also be supplemented by data from our management information system (PROMIS), which tracks the volume of cases received in the PRP by category of issue.

TBOR2 also provided the TA with broader authority to issue and rescind Taxpayer Assistance Orders (TAOs), codifying authority previously granted by the IRS administratively. The TA may take any action permitted by law with respect to taxpayers who would otherwise suffer a significant hardship as a result of the manner in which the IRS is administering the tax laws. The authority to modify or rescind a TAO is now limited to the Commissioner, Deputy Commissioner and the TA; prior to this change, authority to rescind a TAO had rested with local district directors. In addition, the law provides that a TAO may specify a time frame in which the Service must comply and requires the Advocate to report on TAOs not complied with in a timely manner.

Another change covered by the legislation involves a requirement that the TA (or its delegate) participate in the selection and evaluation of all field Problem Resolution Officers. For all practical purposes, this means that I will participate in the selection of Regional TAs (note the new title) and that they, in turn, will be involved in the selection and evaluation of all district or service center TAs (again, note the new titles). Although this had been the general practice in the past, the Commissioner's previous delegation order and the new legislation have now established the practice as a matter of both policy and law. In addition, TBOR2 requires me to describe, in the annual report to Congress, the extent to which I and the Regional TAs participate in the selection and evaluation process.

Although not required by TBOR2, one of the actions taken by the Service has been the establishment of Regional Advocacy Councils. This action had been strongly endorsed by my office and will assist in the identification of administrative and legislative solutions to problems encountered by taxpayers. These councils serve as an arm of the Regional Commissioners and are responsible for reviewing PROMIS data provided by my office for their regions, identifying and prioritizing the critical issues affecting taxpayers, and initiating corrective actions, as appropriate. Their recommendations, as well as those resulting from our discussions with taxpayers and stakeholder groups, will be a principal source of input for my recommendations to the Service on actions to reduce the burden and/or improve service, and for my subsequent reports to Congress.

As previously mentioned, TBOR2 does not change the primary mission or focus of my office or that of the PRP. It does, however, provide some new authority and responsibility, as well as some new challenges to consider. As most of the practitioner community is well aware, our focus over the years has been first to assist taxpayers with their immediate problems and then try to deal with the underlying causes of those problems. This a job that the PRP has done extremely well, as evidenced by feedback from congressional aides and practitioner groups alike. In attempting to deal with the underlying causes of taxpayer problems, we have found, in the vast majority of cases, the problem can be traced to either an administrative system that did not work as expected or an IRS or taxpayer error. These problems generally require administrative actions to improve the performance of the system in question; that is the area [to which] we have directed most of our attention and energies. It's quite clear, however, based on its reaction to my first report, that Congress would like to see us take a more active role in developing legislative proposals to address ongoing taxpayer concerns. We plan to be far more active in that arena in the coming year, and hope that our ongoing dialogue with the practitioner community will be productive in assisting us to identify issues and develop solutions.

I would like to take this opportunity to invite the submission of well-developed legislative proposals on matters that affect taxpayer burden, relate to inequities in the tax laws or pertain to customer service issues. Any additional information that can be provided on the potential impact of proposals, such as number of taxpayers affected, revenue or burden impact, etc., would also be helpful. Proposals can be forwarded directly to my staff at the following address:

Office of the Taxpayer Advocate 1111 Constitution Avenue, N.W. Washington, D.C. 20224