ROBERT E. MCKENZIE, ESQ.
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TAXPAYER ASSISTANCE ORDERS
By: Robert E McKenzie
 

Effective January 1, 1989, a taxpayer gained the right to apply to the Office of Ombudsman, now known as the Taxpayer Advocate, for assistance if he or she is suffering or is about to suffer significant hardship as a result of the manner in which Internal Revenue Laws are administered [IRC § 7811]. For the first time taxpayers have the statutory right to appeal unreasonable decisions by collection officers. If your request for a payment agreement is unreasonably denied, you may request a Taxpayer Assistance Order (TAO) which may require collection personnel to release property levied upon or to cease any action or refrain from any action with respect to the taxpayer [IRC § 7811(b), Exhibit 3]. A request is initiated by filing Form 911 with the local Taxpayer Advocate r. The mere existence of these rights tends to mitigate the unreasonableness of some collection personnel. Don't continually threaten an appeal for a TAO but be aware of your rights. Don't let a collection employee badger your client. You must establish that the collection actions will cause your client significant economic hardship to receive a Taxpayer Assistance Order.
 
 

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      2. TAXPAYER ADVOCATE SERVICE

       

      22.10 The Problem Resolution Program was created by the IRS in response to congressional criticism of the Service's lack of responsiveness. [Problem Resolution Program Handbook, IRM 1.2.1.9] The intent of the program was to give the taxpayer a place to go when the normal channels of the bureaucracy fail to correct problems. Over the years legislation first created a Taxpayer Ombudsman who in turn became the present Taxpayer Advocate. The Internal Revenue Restructuring Act of 1998 granted the Taxpayer Advocate greater authority and independence and created the Taxpayer Advocate Service. The Taxpayer Advocate Service helps taxpayers resolve problems with the IRS and recommends changes to prevent the problems.

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      3. Taxpayer Advocates

      22.20 The Internal Revenue Service Restructuring and Reform Act of 1998 (RRA '98) amended Internal Revenue Code sections 7803 and 7811, creating the position of the National Taxpayer Advocate and strengthening the Taxpayer Advocate organization by making it independent within the IRS. In the spirit of the legislation and the IRS' modernization, the Advocate Organization was restructured, the mission statement revised and the organization renamed the Taxpayer Advocate Service. The Taxpayer Advocate Service (TAS) officially began operation as a modernized organization on March 12, 2000.

       

      Mission

      22.30 The Mission of the Taxpayer Advocate Service is to help taxpayers resolve problems with the IRS and to recommend changes to prevent the problems. The organization fulfills its mission through taxpayer casework and through advocacy initiatives. TAS handles not only cases in which a taxpayer is suffering or about to suffer a significant hardship, but also cases in which the taxpayer, while not experiencing a hardship, would benefit from the involvement of TAS. Where TAS cannot provide a remedy for taxpayers because of deficiencies in administrative procedures or barriers imposed by the tax law, TAS will propose administrative solutions or legislative changes, as appropriate.

       

      Geographically Based Organization

      22.40 Unlike most of the IRS, the Taxpayer Advocate Service continues to be a geographically based organization. The field organization consists of nine Area Taxpayer Advocate Directors, seven of whom oversee casework by Local Taxpayer Advocates in assigned territories and two of whom oversee casework from Local Taxpayer Advocates in service centers. The field organization also includes two Operating Division Taxpayer Advocates, who are responsible for systemic analysis and advocacy. Both the Area Taxpayer Advocate Directors and the Operating Division Taxpayer Advocates report directly to the National Taxpayer Advocate. Seventy-four Local Taxpayer Advocates report to the Area Taxpayer Advocate Directors and are responsible for handling taxpayer cases at the local level.

       

      All Categories of Taxpayer Issues

      22.50 Since TAS is structured around geographic rather than taxpayer segments, Taxpayer Advocates will handle all categories of taxpayer issues, irrespective of the subject matter, in their assigned territories. Thus, all taxpayers in a specific locality will go to the same advocate office, whether the taxpayer is a small business, a large corporation, a wage earner or a government entity. Local and area advocates will deal primarily with casework issues, i.e., issues involving specific taxpayers rather than broad organizational issues.

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      4. Organizational Issues

      22.60 Broad organizational issues are handled by the Advocacy Analysts assigned to and remotely managed by the Operating Division Taxpayer Advocates. Advocacy issues are generally those issues that impact a large segment of taxpayers or are issues that recur with some frequency. Depending on the nature of the problem presented, Advocacy Analysts will recommend either administrative solutions to the IRS or legislative solutions to the Congress through the National Taxpayer Advocate's Annual Report.

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Criteria for Assistance

22.70 The TA was established to streamline and resolve problems which the taxpayer had tried unsuccessfully, through the appropriate channels, to resolve earlier. Therefore, the formula to use when making a referral to a Taxpayer Advocate is to state that you (the representative or the taxpayer) have previously sought to resolve the problem and to detail those steps and actions which were taken in that effort. The problems most often encountered by the TAS are:

 

 

 

 

 

 

 

The above is not meant to be an all-inclusive list. The TAS is empowered to intercede any time there is a problem that is not being resolved through normal channels.

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      2. Requesting Assistance

      22.80 The best way to approach the Taxpayer Advocate is by a letter thoroughly documenting the facts of the case and attaching all pertinent exhibits as well as a copy of your power of attorney. If time is of the essence, a telephone call will generally cause a stay of any collection action on the account. If the matter is of an urgent nature, the practitioner should call the Taxpayer Advocate and set an appointment. Practitioners have found that one-on-one personal contact is the most effective method of dealing with the TAS. Attached as an exhibit at the end of this chapter is a list of addresses and telephone numbers of IRS Taxpayer Advocates in each state. [See App 2-1] Also shown are the addresses of Service Center Taxpayer Advocates.

       

      LTA Actions

      22.90 Upon receipt of a request for assistance, the TAS will take steps to cause the system to suspend actions during its investigation. A freeze will be placed on the Service Center computer to prevent notices and levies. If SB/SE personnel are working on a case, the TAS will instruct them to cease actions pending resolution of the matter.

       

      Resolution of Problems

      22.100 Once steps have been taken to stop the normal processes, the TAS will research the problem and make efforts to correct it. Practitioners have found that TAS staff are cooperative and diligently try to resolve problems. Area Office TAS have proven to be much more cooperative and effective than Service Center TAS staff.

       

      Significant Hardship

      22.110 A taxpayer may apply for a taxpayer assistance order if an IRS action or proposed action would cause significant hardship. The IRS Restructuring & Reform Act of 1998 expanded the definition of "significant hardship" by including the following circumstances [Act § 1102; IRC § 7811]:

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  1. The existence of an immediate threat of adverse action.

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  2. A delay of more than 30 days in resolving the taxpayers account problems.

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  3. The payment by the taxpayer of significant cost (including fees for professional services) if relief is not granted or;
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  1. Irreparable injury or a long-standing adverse impact, if relief is not granted.

 

Nonexclusive

22.120 The list is not intended to be exclusive. A Taxpayer Assistance Order (TAO) may also be issued in any case in which the taxpayer meets other requirements that will be spelled out in regulation. [IRC § 7811 (a)(1)(B)] The ranks are to be based in consideration of equity. If the Internal Revenue Service has failed to follow published guidance, including the Internal Revenue Manual, the Taxpayer Advocate is required to construe the facts taken into account in a manner most favorable to the taxpayer. [IRC § 7803(c)(2)(B)(ii)] The TAO requirements became effective July 22, 1998.

 

Application for Taxpayer Assistance Order

22.130 The prescribed form for an Application for Taxpayer Assistance Order is Form 911 or a signed written statement which identifies the taxpayer, and, where possible, the Service personnel and office involved, and which describes the Service's action and the significant hardship which has occurred or will occur as a result of the manner in which the Internal Revenue laws are being administered. [Regs §§301.7811-1(b), 301.7811-1 (a)(4)]

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      2. 22.140 National Taxpayers Help Line (IRS)

      Internal Revenue Service

    2. (877) 777-4778

 

Practitioner Priority Service

22.150 Beginning January 2, tax practitioners could call the IRS’s new nationwide hotline. The new Practitioner Priority Service®® professional support line will be staffed by IRS customer service representatives specially trained to handle practitioners’’ account related questions. Practitioner Priority Service®® will be open weekdays from 7:30 a.m. to 5:30 p.m. local time

1. See Internal Revenue Manual, 

COPYRIGHT 2005  ROBERT E. MCKENZIE

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