New law provides additional assistance in solving client problems.

• Author: Wright, Jeffery M.

During the past several years, there have been a number of legislative developments designed to provide additional assistance to taxpayers and their advisers in resolving problems with the IRS. The IRS Restructuring and Reform Act of 1998 (IRSRRA) has expanded on this in an attempt to provide taxpayers with additional rights in dealing with the Service.

Prior to the IRSRRA, one of the most publicized provisions relating to taxpayer rights was that of the Taxpayer Advocate (Advocate), created in 1996 by the Taxpayer Bill of Rights 2. The Advocate replaced the position of Taxpayer Ombudsman, which was a position created by the IRS in 1979. Working through the Office of the Taxpayer Advocate, the Advocate was responsible for identifying and resolving taxpayer problems with the Service, proposing changes in IRS administrative practices in response to such problems and identifying potential legislative changes as a means to mitigate those problems. The Advocate was appointed by and reports directly to the IRS Commissioner.

From a practical perspective, one of the Advocate's most important powers was the authority to issue a taxpayer assistance order (TAO) when a taxpayer was suffering or was about to suffer a significant hardship as a result of the manner in which the internal revenue laws were being administered. A TAO could require the Service to release a taxpayer's property that had been seized as a result of a levy, or it could require the IRS to either take (or refrain from taking) any action otherwise permitted by law, with respect to a particular taxpayer. The Advocate designated the authority to issue TAOs to the local and regional problem resolution officers (PROs). As a consequence, the direct point of contact for taxpayers seeking TAOs was a PRO appointed by a District Director or a Regional Director of Appeals.

Congress felt that the Advocate system created by the 1996 legislation did not provide enough assistance to taxpayers having difficulty with the Service. As a consequence, the IRSRRA contains several new provisions.

The new law renamed the Advocate the "National Taxpayer Advocate." The National Taxpayer Advocate is appointed by the Secretary of the Treasury after consultation with the Commissioner and the IRS Oversight Board. The National Taxpayer Advocate cannot have been an IRS employee during the prior two years and cannot accept employment with the Service for at least five years after ceasing to be the National Taxpayer...