IRS union objects to closing in-person taxpayer assistance offices in six states

Closed TAC offices could create filing obstacles for
some taxpayers. (Adobe Stock photo)

As the IRS moves to close nine taxpayer assistance center (TAC) offices in six states, rural and underserved areas may find it harder to file and pay their taxes. The National Treasury Employees Union asked the IRS to reconsider the closures, reports Sean Michael Newhouse of Government Executive. The IRS planned the closures to cut overhead costs.

While the agency promised its closures won't result in job losses, closing in-person tax offices will make it harder for some U.S. residents to handle their taxes. Doreen Greenwald, NTEU's president, issued a statement saying, "These communities will have to drive longer distances, possibly 100 miles or more to meet with the IRS and get their questions answered.”

TAC offices slated for closure on Nov. 30 are: Altoona and Wilkes-Barre, Pennsylvania; Cedar Rapids, Iowa; Elmira and West Nyack, New York; Owensboro and Paducah, Kentucky; Walnut Creek, California; and Wheeling, West Virginia.

The IRS also promised TAC closures won't reduce taxpayer services, which Rep. Mike Lawler, who represents West Nyack, N.Y., questioned in a letter to Scott Bessent, the acting IRS commissioner: "Closing this office without providing a suitable replacement will impose an undue burden on my constituents. . . .Forcing them to travel farther distances — often without reliable access to transportation — adds unnecessary barriers to fulfilling their obligations as taxpayers.”

The planned closures are a reversal of IRS outreach efforts. Newhouse writes, "The IRS had used funding from President Joe Biden’s 2022 Inflation Reduction Act to open or reopen 54 centers, bringing the total number to more than 360."

Particularly for rural populations, which often have few tax service options nearby or can lack reliable broadband for online communication, TAC offices serve as a way for rural folks to file correctly and on time. Greenwald said, “Reducing the number of customer service centers reverses the progress that the IRS has made when it comes to being accessible and helpful to the American people."

Report: The IRS has gotten better at helping rural and 'underserved' markets but still has room to improve

TIGTA analysis of IRS TAC, VITA, TCI and LITC locations and
SSA shared office space by zip code.

For rural residents, getting help from the Internal Revenue Service might be a bit easier than it was a year ago; however, the agency still needs to  improve its outreach to help "underserved" people, according to the Treasury Inspector General for Tax Administration. Sean Michael Newhouse of Government Executive reports, "A watchdog report published last week offered new insights on how the IRS can better use the nearly $58 billion in funding from the 2022 Inflation Reduction Act to improve taxpayer services for underserved, underrepresented and rural individuals."

While the TIGTA report recognized some improvements, it noted that the "IRS does not currently have a definition for what an underserved taxpayer is," Newhouse explains. "While IRS officials told investigators that they use different models to identify such taxpayers, the inspector general argued this practice has resulted in disparate definitions across the agency."

The report also recommended the agency use strategic communication tools to inform underserved residents about available tax assistance programs. Newhouse reports, "For example, investigators did not find any information on the IRS website about outreach events for rural taxpayers or the agency’s virtual assistance program. That being said, since the virtual service started in 2022, a total of 46 employees have helped more than 22,000 taxpayers."

Because reaching underserved populations is a challenge, investigators suggested the IRS piggyback its office locations with or near other government service offices, such as the Social Security Administration office. 

Small nonprofits now must file with IRS; many at risk of missing deadline tomorrow

Small non-profit agencies may lose their tax-exempt status Monday if they haven't adhered to new Internal Revenue Service regulations that were passed in 2007 and go into effect next week. "In years past a nonprofit organization with gross receipts under $25,000 had only to prove to the federal government upon startup that it was what it claimed to be, intent on doing what it said it would do," Sehlia Hagar of the Walla Walla Union-Bulletin reports. "That's no longer the case. Now every nonprofit agency, regardless of monetary size, must file a special tax filing form called a 990. That lets the IRS know what's going on with staffing, mission and money."

Previously these non-profits never had to check back in with the government after their initial approval, so no one really knows how many groups are affected by the new regulation. The National Center for Charitable Statistics reports there are 7,663 organizations in Washington state alone at risk of losing tax-exempt status if they miss the Saturday deadline, but many are relatively unknown and several may not even be operating, Hagar writes. "Basically, the feds are trying to shrink the size of the database, the master file," Lawson Knight, executive director of Blue Mountain Community Foundation, told Hagar. "They never had a way to track the smaller ones before, this is a cleanup. It's like all of these accounts sitting on the books and not sure of some of then are still alive. So the government will send a 'ping' and see if they ping back."

If still-active organizations miss the deadline they could face serious consequences. "Losing tax-exempt status means starting over from scratch," Hagar writes. If an organization's tax-exempt status lapses it is so longer able to accept charitable donations. "This is going to wake up organizations that thought they could just continue doing things as they've always done them," Sandra Gill of Spokane-based Northwest Nonprofit Resources told Hagar. Churches are exempt from the new regulation, but local groups like youth baseball organizations and 4-H clubs are affected. (Read more)

Farmers will have to let IRS give USDA information on their income in order to get federal payments

Farmers will have to authorize the Internal Revenue Service to give their income data to the U.S. Department of Agriculture in order to receive federal payments, in response to an investigation that found almost $50 million went to ineligible recipients last year.

Some farm programs limit payments to farm operators with incomes above certain levels, and "The 2008 Farm Bill prohibits payments to anyone with a taxable non-farm income greater than $500,000," notes Bob Meyer of Brownfield Network. USDA told the Government Accountability Office last year that it couldn't guarantee the rules were being followed because it didn't have access to income information. A GAO audit found that at least 2,702 farmers got subsidies from 2003 to 2006 even though they made more than the former income limit of $2.5 million.

"Beginning with the 2009 crop year and for all successive years, USDA will require producers to sign a form granting IRS the authority to provide income information to USDA for verification purposes," Meyer reports, quoting a USDA spokeswoman as saying that the Farm Service Agency won't get actual tax data and will obey the Privacy Act. (Read more) For a summary of the GAO audit, click here. For a PDF of the full report, click here.