E. Problem Resolution Program and Office of Taxpayer Ombudsman

PRESENT LAW

In 1977, the Internal Revenue Service implemented a taxpayer complaint handling system, known as the Problem Resolution Program (PRP), in each of its districts. Under this program, there is a problem resolution officer in each district who reports directly to the district director. In 1979, this program was expanded to cover all Internal Revenue Service centers, as well as district offices.

The program was established to handle taxpayers' problems and complaints not promptly or properly resolved through normal administrative procedures, or those problems which taxpayers believe have not received appropriate attention. In addition, the program provides for the analysis of problems resolved by it to determine their underlying causes so corrective action can be taken to prevent their recurrence.

In 1979, the IRS established a Taxpayer Ombudsman in the Office of the Commissioner of Internal Revenue. The Ombudsman works under the direct supervision of the Deputy Commissioner of Internal Revenue. The responsibilities of the Ombudsman include the administration of the Problem Resolution Program; representation of taxpayer interests and concerns within the IRS decision-making process; review of IRS policies and procedures for possible adverse effects on taxpayers; proposal of ideas on tax administration that will benefit taxpayers; and representation of taxpayer views in the design of tax forms and instructions.

EXPLANATION OF PROVISIONS

The bill would establish an Office of Ombudsman within the Internal Revenue Service. The office would be headed by an independent Ombudsman appointed by the President and confirmed by the Senate. The responsibilities of the new Office of Ombudsman generally would be similar to those performed by the present administratively appointed Ombudsman through the Problem Resolution Program.

In addition to these responsibilities, the new Ombudsman would be authorized to issue "taxpayer assistance orders" requiring the IRS to cease certain actions with respect to specifically identified taxpayers. Under the bill, the Ombudsman could direct the IRS to release property which had been levied upon, to cease any collection action or other action relating to discovery of taxpayer liability, or to cease any other action otherwise authorized under any other provision of law.