STEVE INSKEEP, host:
This is a Friday morning, which is when we talk about your money. And today, we begin with the IRS, saying sorry - about the way it may investigate your income. The IRS might even pay taxpayers when it bungles their cases. This is just a proposal, one of many that the nation's taxpayer advocate took to Congress this week.
And NPR's Wendy Kaufman has more.
WENDY KAUFMAN: As part of her annual report to Congress, taxpayer advocate Nina Olson said the IRS should issue apology payments when the agency excessively burdens or harms taxpayers. It's an idea that's already in use in Britain and Australia. Taxpayers would have to pay when they lose essential documents or failed to respond to issues of vital importance. Olson says the payments, which are not intended as dollar-for-dollar compensation, would range from 100 to $1,000.
Ms. NINA OLSON (National Taxpayer Advocate): These payments are symbolic. We are recognizing that we blew it. We imposed a burden on the taxpayer that was extremely unnecessary.
KAUFMAN: The program would be capped at $1 million, so as Olson puts it, you have to think about what kinds of cases would warrant the apology payment. The taxpayer advocate's report highlights the most serious problems facing taxpayers. Number one on the list: what happens when changes to the tax code are made late in the year? Because the IRS has to reprogram its computers, the filing season, and those all-important refunds so critical to low-income consumers, are delayed. Olson says for taxpayers claiming certain deductions this year, delays will again be a problem.
Ms. OLSON: Taxpayers who are living for their refund in that last week of January, that first week of February, can't even file this year until February 11th.
KAUFMAN: Another problem associated with changing the tax code late in the year is that changes aren't reflected on IRS forms. Taxpayers don't always know what exemptions they're entitled to, so some taxpayers end up paying more than they should have.
Wendy Kaufman, NPR News.