4.19 Standards of Taxpayer Service

Primary Reference to Article 11 – Service Standards

Following closely from the principle that taxpayers and tax advisors should be entitled to reasonable assistance from the tax authorities is the concept that the tax authority should have service standards with respect to their activities. Taxpayers are required to comply with deadlines, and so should the tax authority. Based on the survey results, most tax authorities do not have pre-defined service standards for such things as processing of tax returns, ruling requests, interpretations, or time frames for handling a tax appeal and so forth.  Even if such service standards do exist, a taxpayer frequently has no recourse to enforce them if these service standards are not met.  In many cases, the service standards, if they exist, are not published, and what is done with these service standards is a mystery outside of the tax authority.

A frequent complaint of taxpayers and tax advisors is that they are judged by one standard where the tax authority is judged by another, if at all. This leads to a disrespect of the tax authority and, thereby, the tax system itself. It is therefore appropriate to say that the defining of service standards, the publishing of same, and the monitoring and reporting of the performance of the tax authority against these service standards, will enhance the respect which taxpayers and tax advisors have of the tax system and the tax authority. Where the service standards are not being met, the reasons therefor should be investigated and acted upon.

Another complaint is that while taxpayers are accountable to the tax authority, the tax authority is not accountable to them and may in fact be accountable to nobody. At best, it may be accountable to parliament or an oversight body such as the auditor general. Often the tax authority will go for years operating under its own priorities with no transparency and will only come into the spotlight when a scandal breaks. Although in recent years, through the work of Congressional Committees and the Taxpayer Advocate, the situation has improved, the IRS in the U.S. seems particularly prone to periodic scandals. These have ranged from tax service standards to intimidation tactics and alleged wrongdoing including politically motivated meddling. And the IRS is far from unique. With the complexity, size and scope of tax authorities, some element of deficiency will inevitably emerge from time to time. But by making the tax authority accountable to the general public, enforced by the measurement and publishing of service standards, much can be prevented.

When the tax authority is involved in activity which may be openly criticized, it is particularly damaging. Taxpayers use such examples to justify their own non-compliance on the basis that the system is unfair. They feel empowered to level the score by their own means. From here, it becomes a slippery slope down upon which it is difficult to gain a foothold until non-compliance becomes widespread. Developing countries who are moving to self-assessment systems are particularly vulnerable as they attempt to bring in tax reforms or enforcement actions which amount to taxing what was previously untaxed.