National Taxpayer Advocate Nina E. Olson, in a legally required report, urges the IRS to focus more broadly on steps to increase voluntary compliance.

"Today, the IRS's explicit and primary focus is on increasing its enforcement activity. While this goal is laudable, it is very narrow," Olson writes. "As Congress noted in RRA 98, the IRS is far more than an enforcement agency -- it must serve all taxpayers. Thus, the IRS should specifically state that its primary organizational goal is to increase voluntary compliance."

The report sets out the objectives of the Office of the Taxpayer Advocate for the upcoming fiscal year and provides substantive analysis of issues as well as statistical information. Objectives are grouped under the headings of systemic advocacy, TAS research initiatives, Taxpayer Advocacy Panel, Low Income Taxpayer Clinics, case advocacy, training and employee development, and TAS outreach.

The report identifies four areas for particular emphasis in FY 2006: private debt collection initiative; collection due process hearings; offer-in-compromise program; and taxpayer service research.

Commenting on taxpayer service research, Olson points out the IRS strategic plan for 2005-2009 -- "Service + Enforcement = Compliance" -- and states that the IRS has not conducted research seeking to determine the optimal allocation of resources between service and enforcement. "Consequently," Olson writes, "the IRS does not know whether recently proposed reductions in customer service will save the government money, since the potential impact on taxpayer compliance can not be quantified."

The report also identifies friction between the IRS and the Taxpayer Advocate Service (TAS), an independent organization within the IRS. Olson notes that when IRS enforcement employees are placed under pressure to quickly produce quantifiable results, there is a tendency to view TAS's participation in program development as interference rather than assistance.

For more information and the complete report, visit Taxpayer Advocate Service.