National Taxpayer Advocate Nina E. Olson today released (IR-2012-6) her 2011 Annual Report to Congress, which lists the twenty-one most serious problems encountered by taxpayers (as required by § 7803(c)(2)(B)(ii)(III):

National Taxpayer Advocate Nina E. Olson today released her annual report to Congress, identifying the combination of the IRS’s expanding workload and declining resources as the most serious problem facing taxpayers. The result, the report says, is inadequate taxpayer service, erosion of taxpayer rights, and reduced tax compliance. The Advocate expressed her continuing concern that the IRS’s expanding use of automated processes to adjust tax liabilities is causing harm to taxpayers and recommended that Congress enact a comprehensive Taxpayer Bill of Rights.

The IRS Is Not Adequately Funded to Serve Taxpayers and Collect Taxes

“The overriding challenge facing the IRS is that its workload has grown significantly in recent years, while its funding is being cut,” Olson said in releasing the report.  “This is causing the IRS to resort to shortcuts that undermine fundamental taxpayer rights and harm taxpayers – and at the same time reduces the IRS’s ability to deliver on its core mission of raising revenue.”

Workload Overload.  The sharp increase in the IRS’s workload is due to several factors, including the increasing complexity of the tax code and the code’s frequent changes, the need to provide service to an increasingly diverse taxpayer population, the IRS’s increasing responsibility for administering economic and social policies, a surge in refund fraud and tax-related identity theft, and the implementation of new third-party information reporting requirements.

• Executive Summary
• IRS News Release 
• Preface & Table of Contents

The Most Serious Problems Encountered by Taxpayers:

• Most Serious Problem #1: The IRS Is Not Adequately Funded to Serve Taxpayers and Collect Taxes
• Revenue Protection Issues
• International Issues
• Diversity Issues
• Compliance Issues, Tax Administration Issues, Status Updates

Legislative Recommendations, Litigated Issues, and More:

• Legislative Recommendations
• The Most Litigated Issues, Case Advocacy, Appendices
• Volume 2: TAS Research and Related Studies

Press and blogosphere coverage:

• Accounting Today
• Bloomberg
• Forbes
• The Hill
• New York Times
• Politico
• Reuters
• Washington Post