The Internal Revenue Service is one of the largest government agencies in the world. With around 90,000 employees and a budget in the billions, it’s truly an empire within our government, and its rules and regulations are not wholly known by any one single human being.
Therefore, as you can imagine, it’s possible that the average taxpayer can hit some roadblocks while trying to navigate this bureaucracy. Even trained attorneys and CPAs find themselves occasionally befuddled by a rule or two – and that’s assuming all IRS employees act ethically. Sometimes, they do not.
Taxpayer Advocate Service to Help Avoid Immense Financial Hardship
This is where the Taxpayer Advocate Service (TAS) can be of some help. Having previously replaced the Office of the Ombudsman within the IRS, the TAS was created in the mid-1990s to further the agency’s goal to project a “kinder and gentler” face to the public. The function of the TAS is, theoretically, to help the average taxpayer avoid immense financial hardship or cost when they run into trouble solving their IRS problem through normal channels. They also “advocate” to the IRS, on behalf of taxpayers, testifying before Congress and frequently providing recommendations as to how the IRS can better serve the public. There are a few thousand employees within the TAS, and they have offices located all over the country.
In the context of dealing with normal IRS Collections employees, the TAS can come up as a possible option more frequently. The Collections Unit’s job, after all, is to collect money from taxpayers, often forcibly. When a taxpayer feels unfairly targeted, is suffering a financial hardship because of an IRS lien or levy, or if a taxpayer is unable to effectively communicate with IRS employees, the Advocate can help.
Recently, I represented a client who had been receiving payments from the federal government as part of her employment compensation. As part of a relatively unknown automated collections program, all of these payments began to be garnished by the IRS. Because my client is self-employed, she was also unable to work out an arrangement whereby the IRS took only a percentage via garnishment, allowing her to live on the rest. In this unique, unfortunate case, my client’s entire gross income was vanishing each time she issued an invoice to the government, and none of the IRS Collections employees seemed able or willing to resolve the issue.
We contacted the Taxpayer Advocate Service by filing a Form 9-1-1 after we were unable to get results using the typical IRS Collections bureaucracy. Within about 1 business day, a representative with TAS was assigned, and contacted us. We were given a case file number, we explained my client’s hardship in writing, and the representative went to work on the issue through internal communications channels.
Complicating the issue further was the fact that my client currently has an Offer in Compromise pending. As such, by being unable to stay current with estimated tax payments, she was risking having her offer returned. So not only was my client’s day-to-day financial survival threatened by a computer levy, but an Offer in Compromise that had been in the works for several months was also on the chopping block. By any definition, my client was facing an economic hardship.
Soon after making the contact with TAS, the levy was released, and the funds that had been collected were applied to my client’s current estimated taxes, keeping her eligible for the pending Offer in Compromise.
Would this resolution have been possible without the TAS? The answer is, possibly. But where the TAS succeeds – and the normal IRS bureaucracy often fails – is in efficiency and speed of communication. My client’s levy was lifted and the seized funds applied according to her wishes within a couple weeks. Prior to that, more than a month had gone by as employee after employee at the IRS pawned us off onto a different level of bureaucracy.
This is not to say that a Taxpayer Advocate Service representative is a good replacement for a tax professional. Attorneys and other representatives provide confidentiality guarantees and loyalty that TAS employees could never come close to matching. They are also probably not likely to recommend creative strategies, personally walk you through preparation of an Offer in Compromise, or negotiate against push-back by IRS employees. Ultimately, they do what they do within the parameters of IRS grace. But when you’re stuck in a rut, they can smooth the road.