US Treasury Report Highlights Serious Flaws In IRS Taxpayer Advocate Service

by Mike Godfrey, Tax-News.com, Washington

05 October 2004

The Internal Revenue Service’s Taxpayer Advocate Service (TAS) has received a sharp rebuke in a Treasury report which found serious cases of inefficiency in the management of the service’s caseload.

The chief remit of the Taxpayer Advocate Service, an independent function within the IRS, is to assist individuals and businesses in solving ongoing tax problems with the agency.

One of the main failings of the program, according to the Treasury Inspector General for Tax Administration’s (TIGTA) report, was the time taken for taxpayers’ problems to be resolved, which has increased from an average of 37 days in 1998 to 76 days in 2003.

Furthermore, the report highlighted that new case receipts and closures have decreased by around 41% since 1998 – and this is despite staffing levels having remained fairly constant since 2000.

The report blamed a “significant proportion” of these failings on inefficient case management on the part of TAS employees and inadequate management oversight.

"We reviewed a statistical sample of 500 of the 203,634 TAS cases closed in FY 2003. There were 273 cases in our sample in which case advocates did not take timely action to resolve the taxpayers' problems," the report revealed.

In total, TIGTA claimed that more than 76,000 taxpayers experienced unnecessary delays in the fiscal year 2003 due to non-timely action taken by the TAS.

In one of the worse examples of delay by the TAS, the report cited a business which waited 538 days for the service to resolve a case involving a tax refund to which it was not entitled. Unnecessary delays accounted for 391 consecutive days.

The TAS management agreed with most of the report’s recommendations. However, the National Taxpayer Advocate “expressed some concerns about the presentation of the data and conclusions in this report.”

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