IRS New For You

Taxpayer Bill of Rights and Authorization of “Apology Payments”
The report urges Congress to enact a comprehensive Taxpayer Bill of Rights and to authorize “apology payments” in cases where the IRS excessively burdens or harms taxpayers.  The U.S. tax system is based on a social contract between the government and its taxpayers, Olson wrote.  Taxpayers agree to report and pay the taxes they owe and the government agrees to provide the service and oversight necessary to ensure that taxpayers can and will do so.  Over the past two decades, Congress has enacted three significant taxpayer rights’ bills, but the number of bills and the lack of publicity have muddled the message, Olson said.  “I believe taxpayers and tax administration will benefit from an explicit statement of what taxpayers have a right to expect from their government and what the government has a right to expect from its taxpayers,” Olson said.

The report notes that other tax systems, including the United Kingdom’s and Australia’s, authorize the tax administrator to make symbolic payments to taxpayers in cases where the tax administrator has made errors that imposed significant hardship or inconvenience.  Such payments are de minimis – not designed to compensate the taxpayer for costs incurred but simply to acknowledge error in a tangible way.  Olson recommended that Congress authorize up to $1 million a year for the National Taxpayer Advocate to make such payments, which would range from $100 to $1,000.