Resolving IRS hardships with the Taxpayer Advocate Service.

• Author: Chambers, Valrie

When the IRS's processes are not working as they should, the Taxpayer Advocate Service (TAS) may be able to help. Sec. 7811 authorizes TAS to issue a Taxpayer Assistance Order if the taxpayer is suffering, or about to suffer, a significant hardship as a result of the way the internal revenue laws are being administered.

For this purpose, a "significant hardship" includes: (1) an immediate threat of adverse action; (2) a delay of more than 30 days in resolving taxpayer account problems; (3) the taxpayer incurring significant cost (including fees for professional representation) if relief is not granted; or (4) irreparable injury to, or a long-term adverse impact on, the taxpayer if relief is not granted (Sec. 7811(a)(2)). Regs. Sec. 301.7811-1(a) (4)(ii) further explains that significant hardship means "a serious privation [is] caused or about to be caused to the taxpayer as the result of the particular manner in which the revenue laws are being administered by the IRS."

In addition to economic burden cases as enumerated in the statute, TAS has also formulated categories for relief when there is a systemic burden, when an action is in the best interests of the taxpayer, or when public policy supports relief. A systemic burden can include a 30-day delay as noted above, but other eligible systematic burdens include when the IRS does not respond within a promised time period or when a system or procedure has not operated as it is supposed to.

The "best interests of the taxpayer" can include considerations of equity or fairness, or when the IRS's approach impairs or will impair the taxpayer's rights. Those rights include the Taxpayer's Bill of Rights, which the IRS adopted on the recommendation of the last national taxpayer advocate, Nina Olson, and includes the right to be informed, the right to quality service, the right to challenge the IRS's positions and to be heard, and the right to a fair and just system, among other rights.

While these categories can address many taxpayer problems within the IRS, taxpayer representatives should first escalate the issue up to the appropriate supervisory levels in the examinations or collection functions to try to resolve the case within the IRS. For example, if a collection case is being worked by a revenue officer (RO), first address the issue with the RO as well as the collection manager or territory manager. However, in many instances, the adverse action may not be accompanied by a notice or the...