Taxpayer Advocate Service Issues Report on Tax Credit, Creates Map of Taxpayers

The Taxpayer Advocate Service (TAS) issued a report earlier this month that makes recommendations for the earned income tax credit in order to increase participation among eligible taxpayers. The recommendations are also aimed at reducing the claims made by ineligible taxpayers, which can result in heavy fines and other penalties.

Calculating Debts

In the same report, the TAS also created a map modeled after a subway system map that shows how taxpayers travel through the tax system. The map is intended to help taxpayers better understand the flow of the agency and where they can get help when needed.

The TAS is an independent organization under the umbrella of the IRS. The TAS works to help taxpayers resolve tax problems that they have been unable to resolve through the typical channels of the IRS. The group also taxpayers who believe that there has been an error in a system or procedure handled by the IRS, or who feel that they cannot get help through these systems or procedures.

Recommendations for EITC

The earned income tax credit, or EITC, was created as a benefit for working people who have a low or moderate income. It can reduce the amount of tax people owe, or it can be issued as a refund even if you don’t owe any tax. The amount of the credit depends on a person’s income and the number of children they have.

In its recommendations, the TAS advised that the IRS should make its mission to administer benefit programs like the EITC more explicit so that more people know about them. Right now, most people see the IRS as a collection agency, and many are losing out on benefits because they don’t know about them or don’t know how to navigate the IRS’ processes. Therefore, the TAS recommends that the IRS hire employees with the right skill sets to meet this mission, as well as create different practices and processes to fulfill this mission.

The TAS also recommended that the IRS reevaluate the administrability of programs like the EITC whose criteria are difficult to verify. Should taxpayers be audited, it is also difficult for them to provide evidence to substantiate their claims – which is even more difficult for low-income taxpayers. Specifically, the TAS recommends separating the income and family size criteria and that it revises the definition of “qualifying child.”

The TAS also recommended that Congress should conduct routine oversight hearings of the IRS so that they may hear from outside experts and so the IRS can keep tabs on its successes and challenges. The group also urged Congress and the IRS to work together to ensure that taxpayer rights are protected and that IRS procedures are consistent with the norms of due process.

Taxpayer Journey Map

To further help taxpayers, the TAS also created a “subway map” of the tax system, showing how taxpayers can get from one stop to the next to get what they need. Seven routes were identified:

  • Tax return processing
  • Notices
  • Tax return preparation
  • Examinations
  • Appeals
  • Collections
  • Litigation

The map provides a visual depiction of the process that taxpayers must go through for each of these issues. It highlights ways that taxpayers can get help, such as through appealing to specific boards or offices, and it helps them to know what the next step in the process is so that they can be better prepared.


Getting Tax Help

The recommendations from the TAS highlight how difficult it can be sometimes to navigate the tax code and IRS processes – particularly for those with fewer resources. It can be easy to make mistakes since the code and the system are so complicated, and those mistakes can result in costly penalties, even if there was no intent to deceive. That’s why you need an experienced tax professional on your side. You can get a certified public accountant to prepare your return, and you can get advice and representation from an experienced tax attorney in Chandler.

The tax attorneys at Silver Law PLC may be able to help if you have been audited or you are going through another tax issue. Our attorneys can help you find credits like the EITC and others that may be able to bring down your tax liability, or they can help you get the appropriate documentation to substantiate the claims you made in the return that is being audited. Our experienced and compassionate attorneys in Arizona also represent clients in litigation and more. Contact us today to learn more about how a tax lawyer may be able to help you.

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