irs chief counsel office charged with intentionally evading its responsibilities to the public
by 卡塔尔世界杯常规比赛时间 research
like the universe itself, the internal revenue code keeps expanding toward infinity. in that its more than 2,600 pages are unclear in spots, there are an additional several thousand pages of rules and regulations. and just to clarify all that, there are tens of thousands of pages of court decisions.
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how many pages in all? no one knows. knowing, in fact, is impossible because in the time it takes to add them all up, their number increases. that’s why 卡塔尔世界杯常规比赛时间 believes it’s so critically important to a fair and well-functioning tax system that the irs office of chief counsel (occ) be held accountable for disclosing technical advice promptly. unfortunately, the occ seems to disagree.
the abstruse process
some of the tax code’s most important ever-expanding guidance is issued by the irs office of the chief counsel, called program manager technical advice (pmta), which are legal opinions that irs employees use to make official decisions regarding taxes and the abstruse process of coughing them up.
it would seem obvious that pmtas must be disclosed to the public. how else will taxpayers and tax preparers know what is expected of them? the promptness of those disclosures is crucial, of course, especially in the wake of the recently enacted tax cuts and jobs act (tjca).
but according to the tax advocacy service, an independent agency within the irs, the occ is evading, perhaps intentionally, the legal requirement to disclose pmtas in a timely manner
strained interpretation
it’s hard to obey a law if the law is a secret. that may be why the first of the legally mandated taxpayer bill of rights is “the right to be informed.” all the other taxpayer rights depend on that one.
the irs watchdog says “the occ does not acknowledge that a function of its advice is ‘to inform taxpayers or practitioners about how it interprets the law,’and says its failure to do so ‘is not a problem that taxpayers have’ and ‘is not a serious problem encountered by taxpayers.’ consistent with this view the occ has sometimes adopted strained legal interpretation to avoid transparency.”
today’s rules and guidance on the issuance of pmtas stem from a settlement reached with tax analysts, which was asking that certain pmta-type memos be disclosed. the occ argued that memos could be withheld under the “deliberative process” privilege. in the settlement, tax analysts got the memos, and the occ agreed to limitations on what it could withhold.
the occ is generally permitted to withhold deliberative and pre-decisional communications, but not final legal positions. this would seem reasonable, except that the tas has found the occ issuing guidelines to irs decision makers that begin with phrases like “we suggest…” rather than “we conclude….” though “we suggest” sounds pre-decisional and not legally binding, employees often make binding decisions based on a so-called suggestion—a suggestion that a taxpayer had no way of knowing.
one indication that the occ is evading its obligation to inform taxpayers and practitioners is a consistent drop in pmtas since about 2010. in that year, 45 pmtas were issued. the number has dropped almost every year since. last year, just when one would expect a major increase in guidance in the wake of the tax cuts and jobs act, the number dropped from 15 the previous year to just 11. (in 1998, following major tax legislation, the number more than doubled, from 32 to 68.)
why the decline? the tas identified a few possible reasons.
the occ does not disclose email as pmtas: one possible explanation for the decline in pmtas: the occ is not required to disclose advice as a pmta unless it is in “memorandum form.” an occ attorney can avoid disclosing legal analysis as pmta by simply issuing it as an informal email rather than a formal memorandum. this loophole, the tas report states, “has no basis in law. nor is it a rational policy. the form of the advice has no bearing on how much thought went into the analysis or how it will be used.”
no written guidance on what must be disclosed as pmta: the occ gives its attorneys no written training materials on what needs to issued as pmta. some 207 attorney have been given oral training since 2017, but that’s only 40 percent of those employed in washington, d.c. there is no way for anyone—not even the tas—to know what that guidance was or whether it was clear and useful.
no system to ensure pmtas are identified, processed, and disclosed in a timely manner: the tas says that the occ has no system to determine whether pmtas are issued to the right decision makers. nor does it have guidelines on how how quickly the pmtas must be disclosed. decision makers may be making their decisions before the public knows what they base those decisions on.
as an example, the tas notes that following the enactment of the tcja, irs program managers asked the occ to “make calls” about what the new law required. this information was needed to update hundreds of tax forms, instructions, publications, fact sheets and faqs. taxpayers, tax practitioners and software companies all needed this information. the calls were made for program managers long before the public knew about them or the reasoning behind them.
withheld information
the tas claims that the occ’s withholding of critical information abuses several taxpayer rights:
- the right to be informed
- the right to pay no morte than the correct amount of tax
- the right to challenge the irs’s position and be heard
- the right to appeal an irs decision in an independent form
- the right to a fair and just tax system
the tas conclusion on the issue is this:
the taxpayers’ right to be informed includes the right to “clear explanations of the laws and irs procedures.” however, the occ does not acknowledge that a function of its advice is “to inform taxpayers or practitioners about how it interprets the law.” this view explains why it has interpreted the [tax analysts] settlement narrowly, created a huge loophole for emailed advice, avoided writing down what needs to be disclosed under the settlement and avoided establishing systems to ensure pmta are identified and timely disclosed. the national taxpayer advocate respectfully disagrees with occ’s cramped interpretation of the disclosure requirements.
the tas recommends that the occ:
- develop clear written guidelines that define what pmta-type advice constitutes information that must be promptly disclosed.
- require disclosure of any advice that is, in substance, pmta.
- establish a written process to monitor whether advice that should be disclosed as pmta is being identified and disclosed in a timely manner.
- incorporate the new pmta guidance into the chief counsel directives manual distribute it at pmta training classes, and release it to the public.
nondisclosure of pertinent tax policy information is not a fair way to slow the astronomical expansion of the tax code and related analyses. expecting citizens to respond to requirements that they cannot know brings to question the very nature and validity of written law. hammurabi recognized that in 1754 bc. the irs office of the chief counsel should recognize it in 2019 ad.