ROBERT E. MCKENZIE, ESQ.

ARNSTEIN & LEHR

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TAXPAYER ASSISTANCE ORDERS

By: Robert E McKenzie

Effective January 1, 1989, a taxpayer gained the right to apply to the Office of Ombudsman, now known as
the Taxpayer Advocate, for assistance if he or she is suffering or is about to suffer significant hardship as a
result of the manner in which Internal Revenue Laws are administered [IRC § 7811]. For the first time
taxpayers have the statutory right to appeal unreasonable decisions by collection officers. If your request for
a payment agreement is unreasonably denied, you may request a Taxpayer Assistance Order (TAO) which
may require collection personnel to release property levied upon or to cease any action or refrain from any
action with respect to the taxpayer [IRC § 7811(b), Exhibit 3]. A request is initiated by filing Form 911 with
the local Taxpayer Advocate r. The mere existence of these rights tends to mitigate the unreasonableness of
some collection personnel. Don't continually threaten an appeal for a TAO but be aware of your rights. Don't
let a collection employee badger your client. You must establish that the collection actions will cause your
client significant economic hardship to receive a Taxpayer Assistance Order.

1.

TAXPAYER ADVOCATE SERVICE

22.10 The Problem Resolution Program was created by the IRS in response to
congressional criticism of the Service's lack of responsiveness. [Problem Resolution
Program Handbook, IRM 1.2.1.9] The intent of the program was to give the taxpayer a
place to go when the normal channels of the bureaucracy fail to correct problems. Over
the years legislation first created a Taxpayer Ombudsman who in turn became the
present Taxpayer Advocate. The Internal Revenue Restructuring Act of 1998 granted
the Taxpayer Advocate greater authority and independence and created the Taxpayer
Advocate Service. The Taxpayer Advocate Service helps taxpayers resolve problems
with the IRS and recommends changes to prevent the problems.

2.

Taxpayer Advocates

22.20 The Internal Revenue Service Restructuring and Reform Act of 1998 (RRA '98)
 amended Internal Revenue Code sections 7803 and 7811, creating the position of the
National Taxpayer Advocate and strengthening the Taxpayer Advocate organization by
making it independent within the IRS. In the spirit of the legislation and the IRS'
modernization, the Advocate Organization was restructured, the mission statement
revised and the organization renamed the Taxpayer Advocate Service. The Taxpayer
Advocate Service (TAS) officially began operation as a modernized organization on
March 12, 2000.

Mission

22.30 The Mission of the Taxpayer Advocate Service is to help taxpayers resolve
problems with the IRS and to recommend changes to prevent the problems. The
organization fulfills its mission through taxpayer casework and through advocacy
initiatives. TAS handles not only cases in which a taxpayer is suffering or about to
suffer a significant hardship, but also cases in which the taxpayer, while not
experiencing a hardship, would benefit from the involvement of TAS. Where TAS
cannot provide a remedy for taxpayers because of deficiencies in administrative
procedures or barriers imposed by the tax law, TAS will propose administrative
solutions or legislative changes, as appropriate.

Geographically Based Organization

22.40 Unlike most of the IRS, the Taxpayer Advocate Service continues to be a
geographically based organization. The field organization consists of nine Area
Taxpayer Advocate Directors, seven of whom oversee casework by Local Taxpayer
Advocates in assigned territories and two of whom oversee casework from Local
Taxpayer Advocates in service centers. The field organization also includes two
Operating Division Taxpayer Advocates, who are responsible for systemic analysis and
advocacy. Both the Area Taxpayer Advocate Directors and the Operating Division
Taxpayer Advocates report directly to the National Taxpayer Advocate. Seventy-four
Local Taxpayer Advocates report to the Area Taxpayer Advocate Directors and are
responsible for handling taxpayer cases at the local level.

All Categories of Taxpayer Issues

22.50 Since TAS is structured around geographic rather than taxpayer segments,
Taxpayer Advocates will handle all categories of taxpayer issues, irrespective of the
subject matter, in their assigned territories. Thus, all taxpayers in a specific locality will
go to the same advocate office, whether the taxpayer is a small business, a large
corporation, a wage earner or a government entity. Local and area advocates will deal
primarily with casework issues, i.e., issues involving specific taxpayers rather than
broad organizational issues.

3.

Organizational Issues
 22.60 Broad organizational issues are handled by the Advocacy Analysts assigned to
and remotely managed by the Operating Division Taxpayer Advocates. Advocacy
issues are generally those issues that impact a large segment of taxpayers or are
issues that recur with some frequency. Depending on the nature of the problem
presented, Advocacy Analysts will recommend either administrative solutions to the IRS
or legislative solutions to the Congress through the National Taxpayer Advocate's
Annual Report.

4.

Criteria for Assistance

22.70 The TA was established to streamline and resolve problems which the taxpayer had tried
unsuccessfully, through the appropriate channels, to resolve earlier. Therefore, the formula to use
when making a referral to a Taxpayer Advocate is to state that you (the representative or the
taxpayer) have previously sought to resolve the problem and to detail those steps and actions
which were taken in that effort. The problems most often encountered by the TAS are:

Improper correspondence audits;

Lost refund checks;

Missing or incorrectly applied payments;

Failure of the Service to comply with requests for a statement of interest paid on accounts;

Cases where an audit reconsideration is warranted but where Collection Division personnel
have denied that Consideration; and

Refusal of an employee to furnish information, such as transcripts of accounts or an

accounting of how payments were posted to the taxpayer or his representative upon request.

The above is not meant to be an all-inclusive list. The TAS is empowered to intercede any time
there is a problem that is not being resolved through normal channels.

1.

Requesting Assistance
 22.80 The best way to approach the Taxpayer Advocate is by a letter thoroughly
documenting the facts of the case and attaching all pertinent exhibits as well as a copy
of your power of attorney. If time is of the essence, a telephone call will generally
cause a stay of any collection action on the account. If the matter is of an urgent
nature, the practitioner should call the Taxpayer Advocate and set an appointment.
Practitioners have found that one-on-one personal contact is the most effective method
of dealing with the TAS. Attached as an exhibit at the end of this chapter is a list of
addresses and telephone numbers of IRS Taxpayer Advocates in each state. [See App
2-1] Also shown are the addresses of Service Center Taxpayer Advocates.

LTA Actions

22.90 Upon receipt of a request for assistance, the TAS will take steps to cause the
system to suspend actions during its investigation. A freeze will be placed on the
Service Center computer to prevent notices and levies. If SB/SE personnel are working
on a case, the TAS will instruct them to cease actions pending resolution of the matter.

Resolution of Problems

22.100 Once steps have been taken to stop the normal processes, the TAS will
research the problem and make efforts to correct it. Practitioners have found that TAS
staff are cooperative and diligently try to resolve problems. Area Office TAS have
proven to be much more cooperative and effective than Service Center TAS staff.

Significant Hardship

22.110 A taxpayer may apply for a taxpayer assistance order if an IRS action or
proposed action would cause significant hardship. The IRS Restructuring & Reform Act
of 1998 expanded the definition of "significant hardship" by including the following
circumstances [Act § 1102; IRC § 7811]:

2.

1. The existence of an immediate threat of adverse action.

2. A delay of more than 30 days in resolving the taxpayers account problems.

3. The payment by the taxpayer of significant cost (including fees for professional services) if
relief is not granted or;

1.

1. Irreparable injury or a long-standing adverse impact, if relief is not granted.

Nonexclusive

22.120 The list is not intended to be exclusive. A Taxpayer Assistance Order (TAO) may also be
issued in any case in which the taxpayer meets other requirements that will be spelled out in
regulation. [IRC § 7811 (a)(1)(B)] The ranks are to be based in consideration of equity. If the
Internal Revenue Service has failed to follow published guidance, including the Internal Revenue
Manual, the Taxpayer Advocate is required to construe the facts taken into account in a manner
most favorable to the taxpayer. [IRC § 7803(c)(2)(B)(ii)] The TAO requirements became effective
July 22, 1998.

Application for Taxpayer Assistance Order

22.130 The prescribed form for an Application for Taxpayer Assistance Order is Form 911 or a
signed written statement which identifies the taxpayer, and, where possible, the Service personnel
and office involved, and which describes the Service's action and the significant hardship which
has occurred or will occur as a result of the manner in which the Internal Revenue laws are being
administered. [Regs §§301.7811-1(b), 301.7811-1 (a)(4)]

1.

22.140 National Taxpayers Help Line (IRS)

Internal Revenue Service

2. (877) 777-4778

Practitioner Priority Service

22.150 Beginning January 2, tax practitioners could call the IRS’s new nationwide hotline. The new
Practitioner Priority Service®® professional support line will be staffed by IRS customer service
representatives specially trained to handle practitioners’’ account related questions. Practitioner
Priority Service®® will be open weekdays from 7:30 a.m. to 5:30 p.m. local time

1. See Internal Revenue Manual,

COPYRIGHT 2005 ROBERT E. MCKENZIE

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03/03/2007

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