The IRS Taxpayer Advocates Services are being forced to eliminate some of the services they offer, at least temporarily due to budget limitations. What are they cutting back on? In a blow to taxpayers, they will no longer deal with cases where the problem involves an IRS delay in processing tax documents. Of course as experienced Tax Professionals, we know that IRS delays are common and the backlog can create additional issues for taxpayers trying to resolving their tax situation. In fact, delays are becoming even longer and more frequent due to the current push for increased enforcement to collect an ever increasing amount of outstanding IRS tax debt.

The official IRS TAS statement read that “In the current federal budget environment, it has become clear that TAS will not have the resources to continue to handle its current inventory levels without adverse impact on its ability to provide effective and timely service. For that reason, we have been considering how to prioritize cases to ensure we can provide effective service to taxpayers who most need our assistance or whom TAS is best suited to assist.”

As of last week on Oct. 1, 2011, the announcement detailed that the TAS would generally no longer accept cases that only involve processing delays for the following issues: original returns; unpostable or reject returns; amended returns; and injured spouse claims.

Basically, the agency wants to try to prioritize their limited resources to taxpayers who are facing imminent threats of IRS enforcement action or who might otherwise be experiencing situations that meet the IRS definition of an economic burden.

What happens now if someone calls to report a delay in processing is that the TAS will simply refer the individual taxpayer onto the IRS function specializing in return processing issues, rather than accepting the case and resolving it themselves.

So how do you know if your case will be still be handled by the Tax Advocate Service? The TAS defines an “economic burden” according to four criteria:

1. The taxpayer is experiencing economic harm or is about to suffer economic harm
2. The taxpayer is facing an immediate threat of adverse action
3. The taxpayer will incur significant costs if relief is not granted (including fees for professional representation)
4. The taxpayer will suffer irreparable injury or long-term adverse impact if relief is not granted.

Here are some details about “systemic burden” cases which will NO LONGER qualify for TAS representation.

1. The taxpayer has experienced a delay of more than 30 days to resolve a tax account problem
2. The taxpayer has not received a response or resolution to the problem or inquiry by the date promised.
3. A system or procedure has either failed to operate as intended or failed to resolve the taxpayer’s problem or dispute with the IRS.

The viewpoint of the TAS is that processing delays at the IRS typically arise either because the affected functions are overloaded with work or because of systemic processing glitches. Usually all the TAS can do in these cases is contact the appropriate IRS function and advocate for a resolution of the problem on a taxpayers behalf.  During this time the service used to provide updates to the taxpayer and look for patterns of delay to identify large systemic problems.  But, this watchdog type work is simply something they can no longer afford to continue to perform.

Are their exceptions? Yes, a few. The TAS added a caveat that it would help with a case when it received a referral from a congressional office or, if the expected refund would resolve an outstanding balance on another year’s return.

What does this mean for the taxpayer?  It may be more important than ever to consider hiring professional help to resolve your tax debt situation. With fewer and fewer self help resources out there, finding the right professional to represent you before the IRS has become critical. Time and delays cost everyone money and sometimes hiring a firm that will advocate on your behalf to resolve your problems correctly and quickly is the most cost effective alternative, even when faced with an economic burden.  At Professional Tax Resolution, we encourage you to do your research and look up our reviews and licensing.  As qualified professionals, we value our integrity and reputation and want you to feel confident that you have hired the right team to negotiate on your behalf.  To learn more about our services or for a free, no obligation consultation call us at 949-596-4143.