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Posts tagged "taxpayer rights"

IRS Resumes Issuing Private-Letter Rulings Concerning Tax-Free Spin-Offs

Pursuant to IRS Revenue Procedure 2017-52, the IRS has introduced a pilot program to resume offering private letter rulings on the tax consequences of certain distributions of stock or securities of a controlled corporation under I.R.C. Sec. 355. From September 21, 2017, through March 21, 2019, taxpayers may request a transactional ruling concerning plans to create tax-free spin-offs. For more information, click here.

Update Regarding the New Office of Tax Appeals

As we inch closer to the January 1, 2018 official changeover of many responsibilities from the Board of Equalization to California's two new tax agencies (the Department of Tax and Fee Administration [TFA], and the Office of Tax Appeals [OTA]), legislators are refining and narrowing the details of future responsibilities and processes for taxpayers to avail themselves of these administrative bodies.

National Taxpayer Advocate Releases FY 2018 Objectives Report to Congress

National Taxpayer Advocate Nina Olson recently released her FY 2018 Objectives Report to Congress summarizing the recent filing season and future goals to improve Internal Revenue Service (IRS) interactions with US taxpayers.

TIGTA Says the IRS Needs to Improve its Records Retention Policies

Ordinarily, the taxpayer has the burden of proving a tax return is accurate. But when the IRS has to produce documents, its record-keeping practices are lacking. The Treasury Inspector General for Tax Administration (TIGTA) released a report on July 13, 2017, that found that the IRS' electronic record retention policies do not comply with certain Federal requirements that records remain retrievable and usable for the time period needed. For example, e-mail messages are not automatically archived for all IRS employees, and the manual methods used to counteract this gap are inadequate when computer hard drives are destroyed or damaged as media storage policies and tools change.

IRS Updates Offer in Compromise Policy

The Internal Revenue Service (IRS) will now return without consideration any Offer in Compromise applications submitted by taxpayers who have not filed all required tax returns. The application fee will be returned to the taxpayer, but any initial payment submitted with the returned application will be applied to outstanding tax debt. An updated Offer in Compromise Booklet (Form 656-B) reflecting this policy change will be available March 27, 2017 here.

IRS Delays Update to E-Services Accounts

The Internal Revenue Service (IRS) announced today that it will delay the date on which e-Services users will be required to re-register and validate their identities (previously discussed here). There is no new implementation date set. The IRS will need more time to discuss security protocols with "key stakeholders" in order to ensure a smooth transition. For more information on this change, click here: https://www.irs.gov/individuals/important-update-about-your-eservices-account.

Collection Due Process Program Has Improved, TIGTA Finds

The Treasury Inspector General for Tax Administration (TIGTA) completed its statutory audit of the IRS' Collection Due Process program and released its final report on August 30, 2016. The Collection Due Process program was designed as an opportunity for taxpayers to have an independent review of proposed IRS levies and liens. TIGTA found that the IRS' internal compliance with the program has improved overall, with fewer misclassified taxpayer cases as compared to the previous year's review.

IRS Responses to Freedom of Information Act Requests Found Inadequate

On September 1, 2016, the Treasury Inspector General for Tax Administration (TIGTA) released its fiscal year 2016 statutory review of the Internal Revenue Service's compliance with the Freedom of Information Act (FOIA). The review found that taxpayer rights may have been violated in 11% of the IRS' responses, "because these information requests had some information erroneously withheld." In 16% of cases, the IRS took too long (more than 30 business days) to provide information requestors with a status update.

Tax Court Re-Affirms Subpoena Notification Requirement, To IRS' Dismay

On July 8, 2016, Judge Mark V. Holmes issued an order in US Tax Court case Ernest S. Ryder & Associates, Inc., APLC, et al., v. Commissioner requiring the Internal Revenue Service (IRS) to notify the taxpayer of any and all subpoenas, with their responses and responsive documents, issued by the IRS to third parties. In this case, there were 77 such subpoenas issued and not yet disclosed, due to the absence of any direct requirement to do so within the Tax Court rules.

FTB Creates Exemption to No Cash Policy

The California Franchise Tax Board (FTB) implemented a "no cash" policy in its field offices effective September 1, 2015. However, recognizing that this could create a hardship for some taxpayers, the FTB has established an exemption policy effective July 1, 2016. Taxpayers may sign a No Cash Policy Exemption Request form and submit it to the FTB with an explanation for their inability to pay using an alternative method. If accepted, exempt taxpayers will need to make an appointment at an FTB field office to pay in cash.

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