TAX LAW SPECIAL REPORT
February 2005

THE TAXPAYER ADVOCATE SERVICE
IS THERE TO HELP (NO REALLY!)
WHEN YOU HAVE A PROBLEM WITH THE IRS

By Nathan Hannah

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Did you know that there is a National Taxpayer Advocate, whose job is to assist taxpayers who are suffering significant hardship because of problems with the IRS? The Advocate, Nina E. Olson, recently released a report to Congress that shows me she has the right idea, if only Congress will listen.

In her report, the Advocate says that the extreme complexity of the federal tax code (officially titled the Internal Revenue Code, and known to tax-types as the IRC or just The Code) is the most serious problem facing taxpayers and the IRS alike. "Without a doubt, the largest source of compliance burdens for taxpayers and the IRS alike is the overwhelming complexity of the tax code, and without a doubt, the only meaningful way to reduce these compliance burdens is to simplify the tax code enormously," Olson writes. The report cites the alternative minimum tax (AMT), the earned income tax credit (EITC), and the large number of provisions designed to encourage taxpayers to save for education and for retirement as key illustrations of the problems of complexity wrought by the 1.4 million-plus word tax code.

If you’ve read my Real Estate Law Update more than once or twice, you have probably noticed that I like to point out, and advocate (ever so gently) against, the scourge of needless complexity. I hardly need to tell you, my informed readers, that The Code is the embodiment of needless complexity.

The Taxpayer Advocate Service (TAS) is a noble, if bureaucratic, effort to assist mere mortal taxpayers ensnared by the complexity of The Code. The TAS is an independent organization within the IRS. The purpose of the TAS is to ensure that tax problems that have not been resolved through normal channels are promptly and fairly handled. There is at least one Local Taxpayer Advocate (LTA) [Help, I’ve started with the acronyms and I can’t stop! - ed.] in each state. The Taxpayer Advocate Service [There!] is there to assist if a taxpayer is facing:

An economic hardship or significant cost,
A more than 30-day delay to resolve the issue, or
An action, response or resolution deadline that was promised by the IRS but has not been met.

Qualified taxpayers can obtain personalized service from an individual Advocate. The Advocate’s job is to listen to the individual's situation, help them understand what needs to be done to resolve it, and stay with them every step of the way until the problem is resolved to the fullest extent permitted by law.

The Advocate’s report cites a separate research study which found that only a tiny percentage of taxpayers who qualify for assistance from the Taxpayer Advocate Service (i.e., because they are suffering a significant hardship) have ever heard of it or end up requesting assistance from it. The Advocate’s report urges the IRS to provide expanded training to employees about when it is appropriate to refer cases to the Taxpayer Advocate Service and to support an outreach campaign to make those taxpayers most likely to need its services more aware generally of the Taxpayer Advocate Service's existence.

Because the Taxpayer Advocate Service is part of the IRS, Advocates know the tax system and how to navigate it. But since they are independent within the IRS, Advocates are impartial. The Advocate will work on the taxpayer's case until it is finalized. What's more, if the problem affects other taxpayers, the Taxpayer Advocate Service can work to change the system.

The Taxpayer Advocate Service is readily accessible to taxpayers at its toll-free number 1-877-777-4778, TTY/TTD 1-800-829-4059. Taxpayers can also call or write to the Local Taxpayer Advocate, whose address and phone number are listed in local telephone directories. IRS Publication 1546, How to Get Help With Unresolved Tax Problems, also provides information on the Taxpayer Advocate Service.

A FINAL POSTSCRIPT ON “L.C.”
THE (ATTACK) LIBRARY CAT

When I last reported on the case of “L.C.” the library cat last February, a San Diego county jury had decided that L.C. did not violate the rights of a library patron by attacking the patron’s assistance dog in the Escondido public library. You may recall that I originally introduced you to the case of L.C. the previous month in a discussion of laws requiring business owners to admit service animals to their business premises. Now comes word from the San Diego Union Tribune that the patron has been ordered to pay the City of Escondido nearly $30,000 for its legal expenses. Judge Yuri Hoffman found that the patron’s lawsuit against the City was “frivolous.”

Another tidbit that I apparently missed previously: the patron’s out-of-pocket losses resulting from the incident consisted of a trip to the vet for the dog, a trip to the doctor for the patron, and two days’ worth of lost wages for the patron, a total of $335. The patron (who was not represented by a lawyer) had originally sought $1.5 million in damages, but later agreed to ask the jury to award no more than $15,000. The City had offered the patron a settlement of $1000. The jury awarded him nothing

 

This communication is designed to bring legal developments of interest to the attention of our clients and others. It should not be relied upon as a substitute for specific legal advice in a particular matter. For further information on any of the subjects discussed, or for legal advice in connection with any particular matter, please contact us.