Tag Archives: national taxpayer advocate

IRS Watchdog: IRS Cuts Taxpayer Services; Elderly and Disabled Taxpayers Not Allowed to Leave Messages

Despicable. The IRS was punished in its budget for using their power as a political weapon, so their retaliation is to not take calls from tax payers, starting with the elderly and disabled.

ATR:

In its annual Report to Congress today, the office of the National Taxpayer Advocate outlined a series of Internal Revenue Service failures. In the “Access to the IRS” section, the report details the trouble taxpayers face reaching the right person in order to meet their tax obligations:

“The IRS does not answer the phone at local offices and has even removed the option it once provided for taxpayers, including the elderly and disabled, to leave a message.

Until 2013, taxpayers — including the elderly and disabled — were allowed to leave a voicemail requesting an in-person appointment. But now, elderly and disabled taxpayers attempting to navigate the automated helpline maze are asked to email the IRS to set up an appointment. The automated message instructs as follows:

“If you are disabled or elderly and require special accommodations for service, please email us at…”

But this leaves many taxpayers in the dark. As the report states:

“Demographic research data show only 57 percent of adults over age 65 use the Internet compared with 87 percent of all adults. According to 2010 Census data, only 41 percent of those with a non-severe disability use the Internet and only 22 percent of those with a severe disability age 65 and older use the Internet. For those without Internet access, the only viable ways to reach the IRS are by phone, or in person.”

On its helplines, the IRS is required to provide taxpayers the option to speak with a live person. But as the report states, the IRS won’t even answer questions about what lines are considered helplines:

“TAS [Taxpayer Advocate Service] twice inquired of the IRS in a formal information request whether it considers the 3709 lines to be ‘helplines’ for the purpose of § 3705(d) of RRA 98, which would require them to have an option to speak with a live person. TAS also asked what lines the IRS does consider to be helplines. Twice, the IRS declined to answer these questions.”

The full report may be accessed here.

 

New IRS Rules Prompting More to Give Up American Citizenship

Reuters:

“‘Truth, justice, and the American way’ – it’s not enough anymore,” the comic book superhero said, after both the Iranian and American governments criticized him for joining a peaceful anti-government protest in Tehran.

Last year, almost 1,800 people followed Superman’s lead, renouncing their U.S. citizenship or handing in their Green Cards. That’s a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It’s also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.

But not everyone’s motivations are as lofty as Superman’s. Many say they parted ways with America for tax reasons.

The United States is one of the only countries to tax its citizens on income earned while they’re living abroad. And just as Americans stateside must file tax returns each April – this year, the deadline is Tuesday – an estimated 6.3 million U.S. citizens living abroad brace for what they describe as an even tougher process of reporting their income and foreign accounts to the IRS. For them, the deadline is June.

The National Taxpayer Advocate’s Office, part of the IRS, released a report in December that details the difficulties of filing taxes from overseas. It cites heavy paperwork, a lack of online filing options and a dearth of local and foreign-language resources.

For those wishing to legally escape the filing requirements, the only way is to formally renounce their U.S. citizenship. Last year, IRS records show that at least 1,788 people did, and that’s likely an underestimate. The IRS publishes in the Federal Register the names of those who give up their citizenship, and some who renounced say they haven’t seen their name on the list yet.

The State Department said records it keeps differ from those published by the IRS. They indicate that renunciations have remained steady, at about 1,100 each year, said an official.

The decision by the IRS to publish the names is referred to by lawyers as “name and shame.” That’s because those who renounce are seen as willing to give up their citizenship primarily for financial reasons.

There’s also an “exit tax” for the very rich who choose to leave. During the last 25 years, a number of millionaires and billionaires have renounced their citizenship. Among them: Ted Arison, the late founder of Carnival Cruises, and Michael Dingman, a former Ford Motor Co. director.

But those of more modest means renounce, too. They say leaving America is about more than money; it’s about privacy and red tape.

Read more HERE.

UPDATE – AllGov:

According to National Taxpayer Advocate Nina E. Olson, approximately 4,000 people gave up their citizenship from fiscal year 2005 to FY 2010. Renunciations increased sharply within the past three years, from 146 in FY 2008 to 1,534 in FY 2010. And during the first two quarters of FY 2011 alone, 1,024 Americans ditched their citizenship.

The advocate’s report cites two reasons for the renunciations. First, many taxpayers abroad say they are confused “by the complex legal and reporting requirements they face and are overwhelmed by the prospect of having to comply with them.”

Second, others have accused the Internal Revenue Service (IRS) of “bait and switch” tactics, telling Americans they can resolve their unpaid taxes under an “older voluntary disclosure programs with the promise of reduced penalties, only to find themselves subjected to steeper penalties.”
According to tax attorney Andrew Mitchel, another factor has been a change of law in 2008 that means “non-U.S. citizen, nonresidents can now annually visit the U.S. for 120 or more days without becoming taxed as U.S. residents (under the pre-2008 rules, visits to the U.S. for more than 30 days during any of the 10 years following expatriation caused the individual to be treated as a U.S. resident for that year).”