Taxpayer advocate heading to greener pastures

Nina Olson has served as the IRS’s in-house watchdog for close to two decades, earning praise from lawmakers across the political spectrum, but now she says the time has come to step down from her role of national taxpayer advocate.

“Eighteen years is a long time. I turned 65. I want another phase of my life. And it just seemed like a good time,” Olson told The Hill last month in an interview at IRS headquarters, where she is based. 

{mosads}Olson, who is stepping down on July 31, leads the Taxpayer Advocate Service, an organization with about 1,625 employees nationwide that works to help taxpayers resolve problems with the IRS. Her job also involves submitting reports to Congress about the biggest challenges facing the IRS and making recommendations about possible legislative changes to help taxpayers. While it’s housed within the IRS, the advocate’s office is often adversarial to the agency because its job is to hold it accountable.

Olson said that her office is “arguably the most important entity for building trust in the IRS” and that it’s important for her successor, who has not yet been named, to protect its independence.

“There will be days where it will be very, very hard to do that,” she said.

Olson’s willingness to challenge the IRS’s leadership and her work helping taxpayers has made her widely respected among both Republicans and Democrats.

“Ms. Olson has done an exemplary job keeping our Committee informed and enabling us to conduct our mandated oversight of the IRS,” House Ways and Means Committee Chairman Richard Neal (D-Mass.) said in a statement. “Her leadership not only afforded countless taxpayers assistance and support with filing but also provided them with a strong voice on their behalf within the agency.” 

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) added that Olson’s retirement “means the loss of a dedicated public servant.”  

The IRS solicited applications for the next national taxpayer advocate in May. Olson’s successor will be appointed by Treasury Secretary Steven Mnuchin, after consultation with IRS Commissioner Charles Rettig.

“Nina Olson has been a tireless champion for taxpayers during her last 18 years at the IRS,” Rettig said in a statement. “Her work as the National Taxpayer Advocate has made a difference on many issues and for many taxpayers through the years, and she will be remembered for her passion, dedication and service leading the Taxpayer Advocate Service.” 

Olson was only the second person to hold the position on a permanent basis, and had to help define exactly what its role would be.

Prior to the job as the IRS watchdog, Olson founded the first independent, nonprofit low-income taxpayer clinic in the U.S. She also had previously owned a tax-preparation firm in Chapel Hill, N.C.

Olson said that one of the biggest things that has changed over the course of her career has been “the advent of digital,” which has introduced new risks to the tax system and increased challenges relating to identity theft.

“There was always, I’m sure, some kind of identity theft, but it was manual, and with the advent of digital, it just went up in a geometric progression,” she said.

One of Olson’s biggest accomplishments was to get the IRS to adopt a Taxpayer Bill of Rights, including rights to quality service, privacy and to pay no more than the correct amount of tax. 

Olson said that several of the provisions in the bipartisan IRS modernization law that President Trump signed last week, known as the Taxpayer First Act, stem from recommendations her office has made, including a provision to prevent low-income taxpayers from having their cases referred to the IRS’s private debt collection program.

The final version of the Taxpayer First Act does not, however, include a provision that would have codified the IRS’s Free File program, in which private tax-prep companies offer free filing software to low- and middle-income taxpayers. The IRS recently launched a review of the program after ProPublica published a series of articles reporting that firms have taken efforts to hide their options under the program.

Olson has long been a critic of how the Free File program is handled.

“Nobody’s using Free File [and] the IRS isn’t doing any customer surveys to find out why they’re not using Free File,” she said. 

Olson said that the IRS should consider abandoning the part of Free File where private companies offer free software, and build up the “Free Fillable Forms” option that’s a digital parallel to the 1040 tax-filing form. She also said that people should be able to download their W-2 forms with their wage information from the IRS into the software of their choice.

The IRS was at the center of a political firestorm during much of former President Obama’s administration following revelations in 2013 that the agency had subjected conservative groups’ applications for status as tax-exempt social welfare organizations to extra scrutiny and delays.

Olson said that the scandal made the IRS “completely paranoid,” leading it to ease the application process for groups seeking to be tax-exempt charities so much that “it is now granting tax-exempt status to entities that facially on their organizing documents do not qualify.” 

In her retirement, Olson said she hopes to “look for some land and have some goats and sheep,” and to spend more time with her creative activities, which include weaving and sewing.

She also said that she has incorporated a nonprofit entity called the Center for Taxpayer Rights, which will be the vehicle for her ongoing work in the taxpayer rights area.

In recent years, Olson has amassed a collection of toy dinosaurs, which began after she ordered some as stocking stuffers for a holiday party. 

“I just thought, dinosaurs are good,” she said. “We need more dinosaurs in our lives. And so that started the dinosaur collection in my conference room.” 

When she retires, she plans to leave many of the dinosaurs behind.

“That’s actually a criteria for the next national taxpayer advocate. They have to like dinosaurs,” she joked.