The National Taxpayer Advocate (NTA) recently submitted the 2024 Annual Report to Congress, highlighting several critical issues affecting taxpayers and the Internal Revenue Service (IRS). Key concerns include delays in processing Employee Retention Credit (ERC) claims, challenges faced by identity theft victims, and the necessity for adequate funding to enhance taxpayer services. Optima Tax Relief summarizes the NTA’s annual report to Congress.
Employee Retention Credit (ERC) Processing Delays
The report emphasizes significant delays in processing ERC claims, a refundable tax credit designed to support businesses that retained employees during the COVID-19 pandemic. Many businesses have experienced extended waiting periods for their claims to be processed, impacting their financial stability. The NTA urges the IRS to allocate additional resources to expedite ERC processing and provide clear communication to affected businesses regarding their claim status.
Assistance for Identity Theft Victims
Identity theft remains a pervasive issue, with victims often facing prolonged resolution times. The report highlights the need for the IRS to improve its assistance to identity theft victims by streamlining processes and reducing resolution times. Implementing more robust authentication measures and providing specialized support can help alleviate the burden on affected taxpayers.
Processing Delays and Taxpayer Services
The NTA identifies general processing delays within the IRS as a significant concern, leading to delayed refunds and responses to taxpayer inquiries. These delays can cause financial strain and uncertainty for taxpayers. The report recommends that the IRS modernize its processing systems and enhance staffing to improve efficiency and reduce backlogs.
Call for Adequate Funding
A central theme of the report is the call for adequate funding to support the IRS’s operations. Sufficient funding is essential for the IRS to modernize its infrastructure, improve customer service, and effectively enforce tax laws. The NTA emphasizes that investing in the IRS will lead to better taxpayer outcomes and increased compliance.
Legislative Recommendations: The 2025 Purple Book
Accompanying the annual report, the NTA released the 2025 Purple Book, which presents 69 legislative recommendations aimed at strengthening taxpayer rights and improving tax administration. Key proposals include:
- Simplifying the Tax Code: Reducing complexity to make compliance easier for taxpayers.
- Enhancing IRS Authority: Providing the IRS with tools to address emerging challenges, such as digital asset transactions.
- Protecting Taxpayer Rights: Strengthening safeguards to ensure fair treatment and due process for all taxpayers.
Research Objectives for Fiscal Year 2025
Looking ahead, the Taxpayer Advocate Service (TAS) has outlined research objectives for fiscal year 2025, focusing on understanding how IRS procedures affect taxpayers and how taxpayers react to IRS actions. The objectives aim to improve IRS operations and assist in balancing compliance efforts with taxpayer rights while reducing taxpayer burden.
Conclusion
The 2024 Annual Report to Congress by the National Taxpayer Advocate sheds light on pressing issues within the IRS that directly impact taxpayers. Addressing ERC processing delays, enhancing support for identity theft victims, reducing general processing delays, and securing adequate funding are critical steps toward improving taxpayer services. Implementing the legislative recommendations in the 2025 Purple Book can further strengthen taxpayer rights and enhance tax administration. A concerted effort from both the IRS and Congress is necessary to address these challenges and foster a more efficient and fair tax system.