The Taxpayer Advocate Report

The IRS Taxpayer Advocate issued her Annual Report to Congress this week.  From the Executive Summary, here is a list of the five biggest issues noted in the report:

The Most Significant Issues Facing Taxpayers and the IRS Today

1. TAXPAYER RIGHTS: The IRS Should Adopt a Taxpayer Bill of Rights as a Framework for Effective Tax Administration

2. IRS BUDGET: The IRS Desperately Needs More Funding to Serve Taxpayers and Increase Voluntary Compliance

3. EMPLOYEE TRAINING: The Drastic Reduction in IRS Employee Training Impacts the Ability of the IRS to Assist Taxpayers and Fulfill its Mission

4. TAXPAYER RIGHTS: Insufficient Education and Training About Taxpayer Rights Impairs IRS Employees' Ability to Assist Taxpayers and Protect Their Rights

5. REGULATION OF RETURN PREPARERS: Taxpayers and Tax Administration Remain Vulnerable to Incompetent and Unscrupulous Return Preparers While the IRS Is Enjoined from Continuing its Efforts to Effectively Regulate Return Preparers.

Now, I am a big sanguine on the first issue.  The advocate doesn't say that taxpayers don't have sufficient rights.  What she says is neither taxpayers nor IRS employees knows what those rights are.  OK, I can understand this.  After all, IRS Publication Number 1, entitled "Your Rights as a Taxpayer", could have a much more prominent link on the main page of the IRS website, I guess, and could have a lot more information in it (or links to other appropriate information).

But note, this is question of education:  educating the public about what rights they have, and educating IRS personnel about the rights of taxpayers.

Of course, we know what happens when the IRS spends money for educating its workers.  You get stories like this:

IRS faces new scrutiny for excessive spending on conferences

The Internal Revenue Service spent an estimated $49 million on at least 220 conferences for employees over a three-year span beginning in fiscal 2010, according to a forthcoming report that will prompt fresh scrutiny of the already embattled agency.

The most recent report I have seen says the IRS has about 90,000 employees.  Spending $49 million on training conferences works out to about $500 per employee, spread out over a three-year period.  This is a pittance, and yet it is considered to be out of line by our politicians and our mainstream media.

Hell, I could argue that the whole "IRS targeting" scandal is as sign of a dysfunctional IRS, crippled by a lack of personnel needed to address important issues as they arise.  We have employees cutting corners creating "BOLO" lists and inquiries by the local agents in Cincinnati that made to the National Office that took months to respond to. From the report at the link:

In fiscal year 1992, the agency had 117,945 employees, according to data from TRAC-IRS at the University of Syracuse. By 2012, this had fallen 23 percent to 90,280. At the same time, the number of returns increased 27 percent, from 113.1 million to 143.4 million. How can we expect the IRS to square this circle?

But we have a bunch of people who make a good living hating on the IRS, and doing everything to do to keep it from doing its job.

We need a government.  To have a government we need taxes, and we need an agency to collect them. As our economy grows, we need that agency to grow as well.  It's not rocket science.

The second recommendation by the Taxpayer Advocate should be the first.  We need a working, functional tax collection agency.