Don't Look for Help From the IRS on Your 2013 Tax Return

Nina Olson is the national taxpayer advocate for the Internal Revenue Service(pictured at left). Here are excerpts from Kiplinger's recent interview with Olson.

Your recent report to Congress said the IRS has been “chronically underfunded” for years. How will this affect taxpayers filing their 2013 returns?

During tax season, the IRS will answer only basic questions, and I’m not even clear on what basic means. After April 15, if you file an extension and have a question, there will be nobody at the walk-in sites or on the phones to give you an answer. You’ll have to go online or pay someone to answer your question. Not only do you have to pay taxes to the government, you also have to pay somebody for the privilege of paying your taxes.

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Isn’t the IRS Web site, www.irs.gov, filling the gap?

The general advice on the site is a good starting point, but there’s nowhere to submit a question. We have an obligation to help taxpayers comply with the law. That includes answering more-specific questions. Finding out the status of a refund is appropriate online, but at some point the taxpayer may need to talk to a human being. Phone calls have increased significantly since 2004, even as we’re offering more services online. The law is complicated. Taxpayers’ lives are complicated.

How does the lack of funding affect taxpayers’ willingness to comply with the law?

If the IRS walks away from taxpayer service and assistance, what will happen more frequently is that the only contact taxpayers have with the IRS is through its enforcement division. That will affect taxpayers’ attitude toward the tax system and make it more adversarial. And that could lead to noncompliance.

In 2013, a U.S. District Court struck down IRS regulations to register and test tax preparers. How can taxpayers protect themselves from unscrupulous operators?

Be very careful about relying on ads that talk about how large a refund a preparer will be able to get for you. Ask preparers what training they’ve had. See how long they’ve been in their current location. Are they going to be there after April 15? If you decide to go with a preparer, get a copy of the completed return and make sure that the preparer’s name, address and his or her PTIN (preparer tax identification number) are on your copy. Preparers are required by law to give you that information. We’ve seen a lot of cases in which preparers have altered the return before it was filed with the IRS and pocketed the difference in the refund, leaving the taxpayer stuck with the liability once the fraud is discovered. One of the best ways to prove that you did not collude in altering a return is to provide your copy of the return.