Welcome to TaxBlawg, a resource from Chamberlain Hrdlicka for news and analysis of current legal issues facing tax practitioners. Although blawg.com identifies nearly 1,400 active “blawgs,” including 20+ blawgs related to taxation and estate planning, the needs of tax professionals have received surprisingly little attention.
The Wall Street Journal's Tax Blog gives “tips and advice for filers,” and Paul Caron’s legendary TaxProf Blog is an excellent clearinghouse for academic and policy-oriented news. Yet, tax practitioners still lack a dedicated resource to call their own. For those intrepid souls, we offer TaxBlawg, a forum of tax talk for tax pros.
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Some of my clients would tell you that there never was such a thing as a “kinder, gentler” Internal Revenue Service, but over the years different attitudes have prevailed in that organization and yes, I can attest that there was an unquestionably kinder as well as gentler organization not long ago. For a brief time in the late 1980s, when Lawrence Gibbs was Commissioner, he encouraged IRS employees to look upon taxpayers as their “clients.” He left the position before he had been able to transform the attitude of the organization to something along those lines. Following the passage of the IRS Restructuring and Reform Act of 1998, as well as a reorganization, the IRS once again went on a “charm offensive,” including regularly scheduled taxpayer service days to try to help taxpayers resolve problems that didn’t seem to be working out on their own.
That was then, this is now. According to a recent speech by the National Taxpayer Advocate Nina Olsen, things have taken a turn for the worst since the passage of the 1998 Act. According to Ms. Olsen, the IRS places too great an emphasis on quantitative measure-ments in evaluating its performance, and should provide a better balance by measuring such things as employee and “customer” satisfaction. Put another way, she states that the IRS is “really focusing on a lot of widgets,” rather than qualitative measurements. She observed that the 1998 law mandated that quantitative measurements be put on an even plane with measurements of customer and employee satisfaction. She instead suggests that “accounting measures have gotten out of hand,” such that performance measurements are now focused on such things as how many Notices of Federal Tax Liens were issued, how many cases were closed, and what period of time expired before that occurred. She suggested that in place of “cycle time,” which relates to how long a case is open, the IRS should begin focusing on how quickly it responds to taxpayer inquiries.
This is just the latest example of what happens when the concept of “management by objective” is taken a step too far. Everyone who has had to live under that theory understands that what you measure is what is going to be produced.
So what can the ordinary taxpayer take from this? Remember that the IRS is made up of human beings who are doing their jobs as higher ups require. It’s just as important to understand that in dealing with the IRS, there are going to be time constraints on the taxpayer that may not have counterparts on the IRS side. A taxpayer must know what her obligations are, as well as what her rights are, in order to deal with this sort of situation, and to consider professional advice and representation before proceeding blindly. In the meantime, Nina Olsen is going to include comments about this problem in her annual report to the United States Congress, and we can hope that the Congress takes them seriously and responds.