National Taxpayer Advocate’s Annual Report

The National Taxpayer Advocate is required to issue an annual report to Congress listing problems and concerns, and how to create a better experience for taxpayers. The 2022 Annual Report to Congress released on January 11, 2023, identifies “the elephant in the room” to be continuing customer service challenges taxpayers are experiencing. It directs to the IRS to “focus its resources on its core taxpayer service mission – processing tax returns, paying refunds, answering and addressing telephone calls, and providing in-person assistance to taxpayers who seek it.”

Most serious problems encountered by taxpayers. The report lists 10 areas in which there are considerable issues:

1. Processing delays
2. Complexity of the Tax Code
3. IRS hiring and training
4. Telephone and in-person service
5. Online access for taxpayers and professionals
6. E-File and Free File
7. IRS transparency
8. Return preparer oversight
9. Appeals
10. Overseas taxpayers

Legislative recommendations. There is the 2023 Purple Book prepared by the National Taxpayer Advocate that contains 65 legislative recommendations to strengthen taxpayer rights and improve tax administration. These would be changes handled by Congress; the IRS is not authorized to do this. Some of these recommendations are:

• Expanding Tax Court jurisdiction to allow for refund cases
• Establishing minimum competency standards for federal tax return preparers
• Restructuring the earned income tax credit for purposes of simplicity and providing a different credit amount for taxpayers with children
• Requiring math error notices to describe the reason(s) for adjustment with specificity