In an Emergency…Fax Form 911

In our prior articles on the IRS, we covered standard notices, the audit process, and the various avenues to resolution including going to Appeals and Tax Court.

However, what does a taxpayer do when they have a compelling argument but navigating the normal channels at IRS has proven impossible? It is usually at this point that a taxpayer should consider involving the Taxpayer Advocate’s Office.

In 1979, the Internal Revenue Service created the “Taxpayer Ombudsman.” The Ombudsman was considered to be the primary advocate within the IRS, for taxpayers. However, because the Ombudsman answered to IRS Commissioner, Congress felt that it could not be impartial. Therefore, in 1996, Congress replaced the Ombudsman with “The Office of the Taxpayer Advocate” (TAO).

The TAO reports directly to Congress. Therefore, although housed within IRS, it is an independent organization. The TAO has two primary functions:

  • 1. To assist taxpayers who are having problems dealing with IRS; and
  • 2. To use these experiences to propose changes to IRS to help alleviate similar problems in the future.

Sometimes, IRS cannot resolve a dispute because the issue at hand is novel or highly contentious. IRS also may not have a procedure to deal with the issue and the taxpayer could get "lost in the bureaucracy" being transferred from one department to another while still receiving collection notices in the mail. Alternatively, IRS may not be able to take into account extenuating circumstances and force upon the taxpayer an unfavorable resolution. TAO was established to deal with these types of issues.

The TAO is highly effective when dealing with taxpayer’s cases but they will only take on cases that meet certain criteria. They encourage taxpayers to utilize their services if after doing a thorough job working with IRS, an issue is still unresolved and meets the following criteria:

  • 1. The problem is causing financial difficulties for the taxpayer, their family or business;
  • 2. The taxpayer is faced with an immediate threat of adverse action; and
  • 3. The taxpayer has tried repeatedly to settle an issue. However, IRS is either non-responsive, an unusual amount of time has passed without a resolution or IRS made an error that cannot be corrected without the TAO’s intervention.

The TAO expects that a taxpayer who has received a notice in the mail or is under audit, will respond in accordance to IRS' established procedures. This usually requires that the taxpayer respond to IRS timely and provide all requested information. A request for assistance from the TAO before doing so will most likely be denied.

If after complying with the various IRS requests, IRS responds adversely and begins to issue notices demanding payment, it may be advisable for the taxpayer to utilize the IRS appeals system rather than requesting assistance from the TAO. (For more information on the appeals process, please see our previous article entitled "Help! The IRS is Auditing Me!") However, the Appeals process may not be the appropriate venue for the issue at hand (i.e., an uncontested refund is significantly delayed or an erroneous lien is placed on the taxpayer’s assets). If the issue remains unresolved, IRS will continue to demand payment or withhold a refund and could perfect their lien and levy against the taxpayer's property.

In a real-life emergency, you would dial 9-1-1 to get help. In the tax world, when faced with an untenable situation, you complete the appropriately titled Form 911, “Request for Taxpayer Advocate Service Assistance,” to request help from the TAO. If the request for assistance by the TAO is approved, the assigned Advocate can be inserted into the process and hopefully resolve the dispute quickly.

Form 911 is a two-page form that requires basic taxpayer information, a description of what the issue is and what relief/assistance the taxpayer is requesting. The more information provided with the form, the more likely the TAO can be instrumental in settling the issue quickly. Once the request is granted, unlike IRS help line where a taxpayer will be connected with the first available agent and subsequent calls are never with that original agent, a specific Advocate is assigned who will be responsible to take the issue to resolution.

The TAO is a taxpayer friendly organization designed to help resolve issues in dealing with IRS. It further submits data to Congress that will help IRS improve their processes. Assistance from the TAO is available if the proper criteria are met. In order to qualify for assistance the taxpayer must show imminent financial harm and have attempted to resolve the issue through the regular IRS channels. It is important for taxpayers to know that there is assistance available should he or she be unable to resolve their dispute with the IRS.

Our experience with the TAO has been extremely positive. We have found that the Advocates have tremendous influence and can effectively break through IRS gridlock. It is good to remember that although IRS is a formidable organization, help can be only one Form 911 away.