Thursday, June 29, 2017

Where in the world is the Illinois Department of Revenue Taxpayer Ombudsman? Please sign our petition.

The State of Illinois is in the news again.  "Illinois finances are in massive crisis mode." says comptroller Susana Mendoza.  New court orders to pay medical bills will eat up 100% of the state's revenue she says.  The tax increasing clouds are on the horizon.
 
So you can imagine the State is seeking every dollar it can collect.  In more than 35 years of practice I have never seen the Illinois Department of Revenue as aggressive as it has been in the past few months.  While at the same time more frustrating in its seemingly inability to solve problems in a timely manner.  The Willard Ice Building is a very unhappy place right now.  
 
I had a client come into the office a few weeks ago practically in tears because her deceased husband's business had just been turned over to an attorney for collection by the Illinois Department of Revenue.  This is wrong in so many ways. I guess it was the straw that broke the camel's back.  I had enough.  I am going to write the governor about some of the collection issues we have been happening.  Not just a complaint letter, but one that offered a solution as well.  But first some background.  
 
According to Wikipedia an ombudsman or public advocate is an official, usually appointed by the government or by parliament, but with a significant degree of independence, who is charged with representing the interests of the public by investigating and addressing complaints of maladministration or a violation of rights.
 
As fearful as the IRS is they have a very effective Taxpayer Advocate.  The IRS website says "the Taxpayer Advocate Service (TAS) is your voice at the IRS. We ensure you are treated fairly, and know and understand your rights. If you are having tax problems and have not been able to resolve them with the IRS, you may be eligible for free TAS help. We know this process can be confusing, but the worst thing you can do is nothing at all!"
 
Our neighboring state Kentucky has a tax ombudsman as well.  From the Kentucky website "the Taxpayer Ombudsman is an advocate for Kentucky taxpayers. The mission of the Taxpayer Ombudsman is to instill confidence and integrity in administration of Kentucky's tax laws by ensuring strict adherence to the letter and spirit of the Taxpayer's Bill of Rights."
 
Illinois has one too.  According to regulations on the Illinois Department of Revenue website all such written taxpayer contact shall include the phone number of the Taxpayer Ombudsman.  But somehow, somewhere the office of the Illinois Department of Revenue's Taxpayer Ombudsman doesn't exist.  And the collection notices clients have received to date make no mention to the Taxpayer Ombudsman.
 
Here is my letter to Bruce Rauner:

Bruce Rauner, Governor
Office of the Governor
207 State House
Springfield, IL 62706
 
In 2014 CEO.net ranked Illinois as one of the three worst states to do business in. Here is one comment from CEO.net, "Illinois is rated in the worst category; their taxing scheme is deleterious (harmful) toward small business.The Illinois Dept of Revenue seems most adversarial with respect to small business support and promotion."
 
As a Springfield based accountant for very small business I can tell you that things have gone from bad to worse at the Department.
 
Here are four examples:
 
A few weeks ago a client stopped by our office just in tears.  Her deceased husband's business had been turned over to an attorney for collection of a past due balance tax account by the Illinois Department of Revenue.  Does she have to pay the bill?  
 
A client who was a victim of identity whose social security number was used to obtain a sales tax number in the 1980's have their refund of $544.00 applied to a 1989 sales tax liability that she doesn't owe, never incurred and is not liable for. Ironically the notice issued by the Department directing the client to call the "phone number below for the location your overpayment was applied"…..has no telephone number.  By the way when we contacted the Department, the obviously burdened and frustrated employee recommended that the only way to clear up the matter was to have our representative intervene.  Otherwise it would take at least four to six months to process our inquiry.
 
A client made a mistake in reporting his payroll tax wages and liabilities.  Our office prepared the necessary amended payroll forms and filed them with both the Internal Revenue Service and the Illinois Department of Revenue.  No problems with the Internal Revenue Service.  The returns were accepted as filed. Not so with the Illinois Department of Revenue.  The Department rejected our amended returns based on our failure to include corrected W-2 forms.  Of course we did include the forms.  No explanation of what happened to them after they reached the Department for processing.
 
A single parent of two children just had his bank account levied by the Illinois Department of Revenue in the amount of $200.00 to meet his past due liability. I can understand that the state is knee deep in serious financial difficulties, and should collect every dollar owed. But $200.00 is not going to make much of a difference in things in the long run.  I can assure you that the $200.00 makes all the difference to this struggling taxpayer.  Common sense should prevail in all enforced collection issues.  It appears that the chase for tax dollars is lacking a very humane approach by the Department.
 
We can do better.  I read with interest your "Cutting the Red Tape" initiative. Good start on what may be Mission Impossible in the State of Illinois.  Still solutions to the day to day problems listed above should not be the sole responsibility of our State Representative. No one is acting as an ombudsmen at the Illinois Department of Revenue to help taxpayers such as the Taxpayer Advocate Service does with the Internal Revenue Service.
 
Ironically the Department regulations make reference to a "Taxpayer Ombudsman."  I have quoted below from Title 86, Section 205.20 Illinois Department of Revenue Regulations.
 
Department Responsibilities
 
The Department of Revenue shall have the following powers and duties to protect the rights of
Taxpayers:
 
  1. To furnish each taxpayer with a written statement of rights whenever such taxpayer
receives a protestable notice, a bill, a claim denial or reduction regarding any tax. Such
statement shall explain the rights of such person and the obligations of the Department
during the audit, appeals, refund and collections processes. All such written taxpayer
contact shall include the phone number of the Taxpayer Ombudsman.
(Section 4 of the Act).

Restoring the office of "Taxpayer Ombudsman" is a good start.  
 
Thank you for your prompt response.
Signature Donald C. Fuener
 
Here is the response I received from the Governor:
   
Not much of a response.  A form letter?  Really?
 
But I am not going to take this sitting down.  I have to ask you a favor. Maybe if we can show that there is more than a little old tax guy interested in restoring the office of the Taxpayer Ombudsman we can move the Governor off center.  You never know, you may just need some help some day.
 
Take a moment to sign our online petition asking Governor Rauner to restore the office of Taxpayer Ombudsman.
   
Thank you in advance.  Let's see what happens next.

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