The office of the National Taxpayer Advocate (NTA) was primarily created to issue Taxpayer Assistance Orders (TAOs) when requested by taxpayers to prevent a “significant hardship.” Section 7811(a)(1)(A). The term significant hardship includes any one of the following: • ....The existence of an immediate threat of adverse action by the IRS, • .....A delay of more than 30 days in resolving the taxpayer's account problems, • .....The payment by the taxpayer of significant costs (including fees for professional services) if relief is not granted, or irreparable injury, or a long-term adverse impact, if relief is not granted. Regulation section 301.7811-1 (a)(4)(ii) defines the term significant hardship as a serious privation. The word “privation” in the Thesaurus includes poverty, adversity, neediness, misery and deprivation. ………………………For all practical purposes, the NTA does not issue TAOs. In the 600 page NTA 2010 report to Congress, the NTA DOES NOT make any comment about her legislative authority to issue TAOs. To underscore this point, the NTA is authorized to stop the IRS from inflicting a significant hardship on a taxpayer that includes irreparable injury (e.g., taking funds needed for a necessary medical procedure) but does not discuss that any TAOs have been issued. The 600 page NTA report for 2010 also does not discuss using a TAO to prevent a serious privation (e.g. preventing the IRS from taking funds needed for food, shelter, transportation, medical care, student loans, alimony, child care, secured debt, restitution, etc.). The apparent reason for the absent of comment in her 600 page report is that less than 100 TAOs were issued out of 298,933 requests for assistance, and that fact is in a footnote in the Appendix. For all practical purposes, the NTA has openly ignored the intent of Congress to have her use that authority. The NTA has openly disregarded the Congressional mandate to use the authority of a TAO to prevent taxpayer hardship and privation by abusive actions of the IRS and abuses of power by the IRS. ……………………………………………………………………………The House Report for IRS Restructuring and Reform Act of 1998, PL 105-206, (7/22/98) provides that a TAO may require the IRS to release property of the taxpayer that has been levied upon, or to cease any action, take any action as permitted by law, or refrain from taking any action with respect to the taxpayer. Instead, the NTA interaction with the IRS is passive and non-confrontational. Instead of requiring the IRS to stop a levy with a TAO, the NTA will merely ask the IRS to stop causing an irreparable injury (i.e., economic hardship) for a taxpayer. The NTA does not use TAOs to halt levies that cause economic hardship mandatorily precluded by section 6343(a)(1)(D). ............................................... It is also the position of the NTA that a business cannot have an “economic hardship.” Even if the IRS levies the gross income of a business in a manner that will close the business and destroy jobs, it is the view of the NTA that the “economic hardship” prohibition of section 6343(a)(1)(D) does not apply to businesses. The economic hardship prohibition is unqualified; it does not distinguish between individual and business taxpayers. All of the rules of construction dealing with interpreting the language of a statute are united in stating that the plain meaning of the language of a statute governs its meaning. Since the term “economic hardship” is not limited to individuals, that interpretative construction is patently incorrect. .............................. I have a small “tax controversies” IRS tax practice, representing taxpayers throughout the US and abroad on any matter pending beforeIs the IRS. I regularly request the NTA to stop tax levies on individuals and remove tax liens that are, in each instance, each causing every form of serious hardship, irreparable injury and serious privation. Notwithstanding the taxpayer hardship that I regularly witness, the NTA has never issued a TAO in any of my cases since she received that clear mandate by Congress in 1998. Notwithstanding the clear desire of Congress to have the NTA proactively use TAOs to stop taxpayer economic hardship, she refuses to use that authority. Since the entire purpose of section 7811 empowers the NTA to use TAOs, the disuse of that authority raises the question of whether Congress should continue to support the NTA organization which includes over 2,000 employees, 19 area offices, 65 local offices, and the staffing at the National Office. The annual budget of the office of the NTA approximates $100 million per year. Is that cost justified in circumstances where the NTA has effectively rejected the authority delegated to her by law? It is my personal view that the most of the IRS abuses on tax levies, tax liens and other matters can be easily negated legislatively and with administrative regulations. --------------------------------------------------------------------- The following are situations involving significant hardship that the NTA has refused to stop with a TAO. .................................................... 1. The NTA refuses to use a TAO to stop a levy with on the gross income of a business even if the levy of gross income results in the closing of the business with the resulting loss of jobs. The refusal of the NTA to issue TAOs in these circumstances is in conflict with the intent of Congress is to create businesses, create jobs, grow businesses and grow jobs. In one of my cases the NTA did not issue a TAO to stop a levy of gross income of a church. In another case, the NTA did not stop a levy of gross income of a “head start school” for low income and underpriceded children. I have witnessed the levy of gross income of Medicare reimbursements of gross income of home service providers who needed those funds to pay for the service providers of disabled and handicapped taxpayers who need home nursing assistance. It is my opinion that an “abusive tax levy” is an “unlawful levy” within the meaning of section 7214(a)(3) that mandates dismissal from office. Proper enforcement of section 7212(a)(3) will quickly halt abusive tax levies that the NTO will not stop with a TAO. I have no doubt that section 6342(a)(1)(D) precludes a levy that causes an economic hardship for any business. ……………………………………………………………………………………………………… 2. The NTA refuses to use a TAO to stop a levy of income of employed taxpayers even if that levy is contrary to the economic hardship prohibition under section 6343(a)(1)(D). The IRS Revenue Agents do not instruct employers to withhold income of any employee needed for reasonable and necessary living expenses. For that reason the taxpayers subject to a wage levy always receive less income than they need for their reasonable and basic living expenses. This is an unlawful action under sections 6343(a)(1)(D) and 7214(a)(3). ………………………………………………………………………………………………… 3. The NTA refuses to use a TAO to stop the levy of the bank account of a business even if the bank account has money earmarked for income and payroll taxes, payroll, and necessary business expenses. This is an unlawful action under 6343(a)(1)(D) and 7214(a)(3). ………………………………………………………………………………………………… 4. The NTA refuses to use a TAO to stop the levy of a bank account that has necessary funds of an individual taxpayer who needs the funds for basic expenses including food, housing, transportation and medical expenses. This is an unlawful action under 6343(a)(1)(D) and 7214(a)(3). ………………………………………………………………………………………………… 5. The NTA refuses to use a TAO to authorize a lien withdrawal even if the tax lien will cause an employee to lose a job. This is an unlawful action under 6323(j) and 7214(a)(3). ……………………………………………………………………………………………………… REQUEST FOR CONGRESSIONAL HEARINGS TO REVIEW THE REFUSAL OF THE NTA TO ISSUE TAOs. With or without hearings, Congress should consider whether the office of the NTA is necessary. The Congressional budget can be reduced by $100 million per year (my personal estimate) . Is it worth $100 million per year to get an annual 600 page report from the NTA to Congress that few read? In lieu of issuing TAOs, the NTA employees act as liaisons between the taxpayer or the taxpayer’s representative and the IRS. That assistance is sometimes helpful, but it is not a substitute for a TAO intended to prevent a taxpayer’s significant hardship. I have one recent anecdote to share involving a call I received from a Local Taxpayer Advocate in response to my request for a TAO on Form 911. The case worker said that it would take her two weeks to get to the case and that I am better off trying to get the IRS Service Center to stop the levy hardship that I identified. That response from the case worker underscores the fact that the NTA organization and 2,000 of its employees do not need to be allocated any portion of the Congressional budget for the 2012 tax year and beyond. The conduct of the NTA, in its refusal to issue TAOs as intended by Congress is also inconsistent with the newly updated regulations under section 7811. TD 9519 4/1/2011 has updated §301.7811-1 Taxpayer assistance orders. It is my opinion that the standards used by the NTA are clearly inconsistent with section 7811 and these revised regulations. To prove the point, the TAOs issued by the NTA in 2010 were less than 1/10th of 1% of the requests for assistance. That statistic proves the point. I can add from my own experiences that the NTA had not issues a TAO in the many requests for assistance I have requested since 1998. As a tax attorney specializing in IRS controversies, representing the taxpayers throughout the US and abroad, I witness taxpayer “economic hardship” on a regular basis throughout the calendar year. ……………………………………………………………………………………………………………………………………………………………… §301.7811-1 (a) Authority to Issue—(1) In general. When an application for a taxpayer assistance order (TAO) is filed by the taxpayer or the taxpayer's authorized representative in the form, manner and time specified in paragraph (b) of this section, the National Taxpayer Advocate (NTA) may issue a TAO if, in the determination of the NTA, the taxpayer is suffering or is about to suffer a significant hardship as a result of the manner in which the internal revenue laws are being administered by the Internal Revenue Service (IRS), including action or inaction on the part of the IRS. ……………………………………………………………………………………………………………………………………………………………… §301.7811-1 (4) Significant hardship—(i) Determination required. Before a TAO may be issued, the NTA is required to make a determination regarding significant hardship. (ii) Term defined. The term significant hardship means a serious privation caused or about to be caused to the taxpayer as the result of the particular manner in which the revenue laws are being administered by the IRS. Significant hardship includes situations in which a system or procedure fails to operate as intended or fails to resolve the taxpayer's problem or dispute with the IRS. A significant hardship also includes, but is not limited to: (A) An immediate threat of adverse action; (B) A delay of more than 30 days in resolving taxpayer account problems; (C) The incurring by the taxpayer of significant costs (including fees for professional representation) if relief is not granted; or (D) Irreparable injury to, or a long-term adverse impact on, the taxpayer if relief is not granted. (iii) A delay of more than 30 days in resolving taxpayer account problems is further defined. A delay of more than 30 days in resolving taxpayer account problems exists under the following conditions: (A) When a taxpayer does not receive a response by the date promised by the IRS; or (B) When the IRS has established a normal processing time for taking an action and the taxpayer experiences a delay of more than 30 days beyond the normal processing time. ………………………………………………………………………………………………………………………….. (iv) Examples of significant hardship. The provisions of this section are illustrated by the following examples: ……………………………………………………………………………………………………………………………………………………………… Example 1. Immediate threat of adverse action. The IRS serves a levy on A's bank account. A needs the bank funds to pay for a medically necessary surgical procedure that is scheduled to take place in one week. If the levy is not released, A will lack the funds necessary to have the procedure. A is experiencing an immediate threat of adverse action. ……………………………………………………………………………………………………………………………………………………………… Example 4. Irreparable injury. D has arranged with a bank to refinance his mortgage to lower his monthly payment. D is unable to make the current monthly payment. Unless the monthly payment amount is lowered, D will lose his residence to foreclosure. The IRS refuses to subordinate the Federal tax lien, as permitted by section 6325(d), or discharge the property subject to the lien, as permitted by section 6325(b). As a result, the bank will not allow D to refinance. D is facing an irreparable injury if relief is not granted. ------------------------------------------------------------------ Alvin S. Brown, Esq. www.irstaxattorney.com 888-712-7690