If you have questions and concerns about filing your taxes, you’re not alone. The IRS receives more than 100 million phone calls, 10 million letters, and 5 million visits at its walk-in sites from taxpayers each year, according to IRS.gov. But if you’re unable to resolve your question or issue with the IRS, there’s another resource affiliated with the IRS that offers free help for your tax problems: The Taxpayer Advocate Service (TAS).
Nina Olson is the IRS National Taxpayer Advocate for TAS. According to Olson, TAS handles between 200,000-250,000 cases each year and resolves 80% of them. Olson shared four common problems taxpayers face and the best ways to solve them.
#1: Taxpayers can’t reach the IRS
Olson says a common problem she hears from taxpayers is an inability to actually reach a person at the IRS. “What I hear from taxpayers a lot is just frustration about being able to get through to the IRS on the phone,” Olson said.
Long wait times and getting automatically disconnected after a certain period of time, what IRS lingo has called a “courtesy disconnect,” leave taxpayers frustrated and without the answers they need. While Olson said the IRS has improved and has a dedicated phone number for tax law questions, she said taxpayers should be prepared to wait. “The IRS is doing better this year than they did last year, but there’s still a fair amount of frustration.”
Sometimes taxpayers call with basic questions about their filing status, or they may have more complicated issues to address like identity theft. “There are times when you really have to talk to the IRS to find out what’s going on and you just have to suffer through those phone calls,” Olson said. “I like to tell people to do other work while you’re on the phones.” Olson also recommends calling at off-peak times, such as first thing in the morning, before lunch or in mid-afternoon.
#2: Taxpayers don’t understand the notices the IRS sends
When people receive notices from the IRS, many times they have no idea what to do. Usually, their first instinct is to call the IRS, repeating the cycle of call backlog and frustration.
“Sometimes, it’s not clear what they need to do or why they’re getting the notice [from the IRS] in the first place,” Olson said. “So the taxpayer will call and say, ‘I got this notice, what is it telling me to do?’ So there you’ve lead to more phone calls and a lack of clarity.”
Another major problem is decoding tax speak. Tax law is complicated, and Olson says it’s difficult for the IRS to put notices into language a layperson can understand. “That’s very frustrating for the IRS and for the taxpayer. So then the taxpayer writes. But in the meantime, you’re sitting there waiting for a response, so then you call back again. You can see how that builds up,” Olson said.
TAS can be a helpful resource for people in these situations. When a person calls TAS, they’re assigned to one representative to work with him or her from start to finish, without the dreaded “courtesy disconnect.”
“We’re able to cut through some of the red tape, get an answer, figure out the steps that need to be done and get the process underway,” Olson said.
Olson also said TAS is working on a website that would have a resource for each kind of IRS notice. “Every IRS notice has a number, and [taxpayers] can put that number in [the site] and we will have a plain language page on what this notice is about, what they need to do, what it is trying to say, and what their rights are in respect to that notice,” Olson said. TAS plans to have the site up by the end of the year.
#3: Identity Theft
Identity theft is rampant in the United States. The Bureau of Justice reported that 7% of Americans experience at least one incident of identity theft each year. The IRS has cracked down on tax-related identity theft, such as when someone uses your stolen Social Security number to file a tax return for a fraudulent refund. In 2016, the IRS reported a staggering 50% drop in the number of people who filed cases saying they were victims of identity theft. They also reported a 50% drop in the number of fraudulent tax returns filed with the IRS.
To do your part to help limit identity theft, Olson says to avoid giving out your Social Security number. “Anytime you put your Social Security number out there, there’s a risk to it being compromised,” Olson said. “So be very careful about where you’re putting it out there. It’s one little measure you can take.”
Olson said there are many times where businesses do not need a Social Security number. “Unless it’s for something tax related, there’s a lot of things where they don’t need it,” Olson said. “People should have the reflex to say, ‘Why do you need that?’”
For victims of tax-related identity theft, the IRS has established a program in which they issue an Identity Protection Pin, a six-digit number assigned to eligible taxpayers that helps prevent the misuse of their Social Security number on fraudulent federal income tax returns.
“In addition to your social security number, you put the IP pin on your income tax return, and this tells the IRS this is a legitimate return from the taxpayer,” Olson said.
While the program is currently only for victims of tax-related identity theft, Olson said the IRS is piloting this program in Florida, Georgia and the District of Columbia for any taxpayer who wants the additional security.
“That’s something you can look at to protect yourself and your identity,” Olson said.
#4: Taxpayers don’t pick reputable tax preparers
Many issues taxpayers face could be avoided by picking more reputable tax preparers to prepare their returns, according to Olson.
“People need to be very careful about who they pick to do their returns,” Olson said. “There are up to 1.2 million return preparers we have in our system, and most of them are what we called ‘unregulated preparers.’ They’re not attorneys or CPAs or enrolled agents, so they show up all over the place.”
Some of these preparers can make empty—even dangerous—promises. “When we see real danger is when they’re going to folks and saying, ‘I can get you the biggest refund possible,’ or ‘I do better than everyone else in getting refunds,’ and it doesn’t quite make sense,” Olson said. “Those are things where the taxpayers are going to be harmed, and often times there’s a refund fraud scheme where a preparer maybe skimming off a part of your refund.”
Olson suggests hiring licensed tax preparers who are educated in tax law. “Go with someone who is licensed, like an attorney or a CPA or a licensed agent,” Olson said.
