NFIB

Concerns include tax-code changes, Taxpayer Bill of Rights

National Taxpayer Advocate Nina Olson released her annual report to Congress recently, focusing mainly on the consequences of tax code changes made last year and urging Congress to enact a Taxpayer Bill of Rights.

In her report, Olson discusses how the 2006 extension of several tax deductions and the late passage of the 2007 Alternative Minimum Tax patch caused various problems for taxpayers, including small business owners. Olson estimated that more than a million taxpayers might not have claimed deductions they were eligible for because they were not aware they existed.

Additionally, because the IRS had to delay the start of filing season in 2007 by three weeks, many taxpayers could face financial hardship when their refunds are delayed. And, according to Olson's report, the more than 13 million taxpayers affected by the AMT patch had to wait until this month to begin filing their returns.

“When taxpayers do not claim tax benefits because they do not know about them,” Olson said, “Congress’s intent in providing the tax benefits is undermined, and taxpayers understandably question the fairness of the tax system.”

NFIB has long fought for simplification of the tax code, as small business owners do not tend to have the time, money or resources to spend poring over its complex rules and regulations.

Olson also urged Congress to develop a comprehensive Taxpayer Bill of Rights, as the three separate bills from previous years, combined with a lack of publicity, have "muddled the message," according to Olson.

In line with a comprehensive Taxpayer Bill of Rights, Olson also encouraged Congress to authorize "apology payments" to taxpayers who have been excessively burdened or harmed by IRS errors. She recommended that Congress provide $1 million for the National Taxpayer Advocate to make payments ranging from $100 to $1,000.

Read the full report from the National Taxpayer Advocate