IRS Policies and Procedures To Safeguard Taxpayer Rights and the Effects of Certain Provisions of the 1976 Tax Reform Act

Comments were presented on how the Internal Revenue Service (IRS) safeguards taxpayer rights and the effects of the summons and the return preparer penalty provisions of the Tax Reform Act of 1976. While there may be instances where IRS has violated a taxpayer's rights, GAO has found no evidence to indicate that such instances are widespread or systemic. During fiscal year 1981, IRS had about 49 million personal contacts with taxpayers through its tax administration activities of providing assistance, examining returns, collecting delinquent taxes, locating taxpayers who do not file returns, investigating possible criminal violations, and hearing taxpayers' appeals. Given this number of personal contacts, the odds are that some taxpayers' treatment was other than correct. However, GAO could not estimate the number of instances where this might have occurred. By the same token, there is no measure of overall taxpayer satisfaction with the treatment received from IRS. To obtain such a measure, there are at least two approaches which merit consideration. First, IRS could survey a statistical sample of taxpayers to determine their level of satisfaction with the IRS treatment. In this regard, there are three bills presently pending in Congress which would require IRS to survey taxpayers to obtain an evaluation of the quality of the IRS service. Second, IRS could expand the statistical information system to include all complaints dealing with alleged violations of taxpayer rights and the validity and resolution of those complaints. Concerning the summons provisions of the Tax Reform Act of 1976, GAO believes a legislative change is needed. Some taxpayers are using the provisions solely for the purpose of delaying IRS investigations. GAO believes the enactment of H.R. 1501 would prevent such abuses but, more important, would also preserve taxpayer rights in summons matters. With respect to the preparer penalty sections of the Act, GAO believes various actions on the part of IRS are needed to improve administration.