'Tax man' shows a softer side

With 22 years on the job, Jackie Bracey could be considered a career employee of the Internal Revenue Service. But she defies any stereotype of an over-eager agent running down a reluctant taxpayer.

Instead, she spends her time defending people who owe the government money.

Ms. Bracey, based in Greensboro, N.C., is a taxpayer advocate, a role created by Congress in 1998 as part of the kinder, gentler theme adopted by the tax-collection agency. Bracey and advocates at 73 other offices nationwide, backed by 2,100 field workers and support staff, go to bat for taxpayers who are in financial straits because of something the agency has done or is about to do.

Though it may seem counterintuitive for the IRS, the advocate service not only helps taxpayers, but identifies procedural problems that, once unsnarled, could help streamline the agency. (For a look at US efforts to simplify filing, see page 17.)

The main goal, though, is for the ombudsman to step into a dispute a taxpayer is having with the IRS when it appears that something the IRS is doing, or planning, would create an undue hardship on the taxpayer.

This can range from speeding up resolution of a dispute that has dragged on too long, to demanding that the IRS halt a collection action if the taxpayer can show he or she "is suffering or is about to suffer a significant hardship."

"We look for all the possibilities we can to help somebody," says Bracey. When it comes to her attention that someone is backed against a wall – say, a taxpayer faces eviction because he can't pay rent since the IRS has levied his paycheck, the advocate can call a halt to the collection process. The advocate isn't saying that the money isn't owed, only that collecting it would impose a hardship. Bracey says she doesn't like to think that people might have a car repossessed and lose their ability to get to work because they can't make payments that have been redirected to the IRS.

Besides trying to halt economic hardships, taxpayer advocates also deal with cases of procedural hardship. This can happen when the IRS doesn't do something it said it would do, or doesn't do it in a timely fashion. Bracey, for instance, says that at this time of the year, her office fields inquiries about speeding up refunds for people who filed paper returns and need the money.

Taxpayer ombudsmen have been around in one form or another since 1979, says Nina Olson, the national taxpayer advocate. But they were given much more clout in 1998 when Congress decided that the workers would no longer report to regional directors but to her office.

While this gave them a great deal more authority, outside watchdogs such as the National Taxpayers Union say more can be done.

"There is a long way to go to get an agency that feels independent and emboldened" to work for taxpayers, says Joe Sepp, a vice president of the Washington-based tax-advocacy group.

While Mr. Sepp applauds the service for removing management oversight of advocates from local tax officials, he says more advocates should be drawn from outside the IRS, bringing an independent viewpoint with them.

The taxpayers union also has complained that Congress and the Bush administration don't seem to be taking the advocates seriously enough. Each year, the IRS group reports to Congress on the top problems that advocates see. Many of these are systemic problems that can gum up the works for both taxpayer and collector, such as a December notice from Ms. Olson that the IRS should have just one definition of a dependent child, rather than the three definitions currently used.

While taxpayer advocates can help smooth things out in many cases, they cannot ignore laws. This seems to be a particular problem with Earned Income Tax Credits, which people frequently are not able to claim because they don't file tax returns on a timely basis.

If taxpayers haven't made legitimate claims for credits, there's nothing the advocate can do to reverse that course. And Olson says that while taxpayers are free to use her service, they should keep in mind that it does not replace the normal appeals process and should be the last place a citizen calls upon for help, not the first. "We're really there for when the processes fall down," she says.

Every state has at least one taxpayer-advocate service office. Look in the telephone book blue pages for their phone numbers and addresses, or call 877-777-4778 to find the nearest office. The IRS website, www.irs.gov, also has information on the service.

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