live from baltimore, maryland. >> each week in this segment of "the "washington journal" we like to take a look at how your money is at work in the federal government. irs with the help of virus national taxpayer advocate nina olson joining us once again. -- irs national taxpayer advocate nina olson joining us once again. i had an organization, the taxpayer advocate service that is inside the irs but also independent. we help taxpayer solve their problems with the irs. it could be something the irs is doing or not doing creates economic harm to them or because they have been trying to get their issues resolved and they haven't been able to do it through normal channels. they can come to one of my 79 offices around the country. host: you are independent of the irs. who do you report to? guest: i report to the commissioner of the irs by law.

i and my employees are inside the irs so we can see the data and find out what's really going on. i am appointed by the secretary of the treasury and that access a safety valve. my direct boss cannot hire me nor can he fire the national taxpayer advocate. host: you also make plenty of reports to congress on issues facing the irs. what is the most recent report? guest: i'm required by law to provide two reports to congress each year and they have to go directly to congress before anyone in the irs or the treasury department or the white house or anybody sees it other than my own staff. june 30th inne was which we informed congress what we were focusing on for the next fiscal year starting october 1. there were a whole bunch of issues we were saying we were going to focus on. quite a will go through

few of those issues on the washington journal. we are inviting you to call in your questions about the irs and concerns about interacting. take yourre to questions and comments. eastern and central time zones, (202) 748-8000. mountain or pacific time zones (202) 748-8001. olson, one of the issues he will be focusing on in the next year is the continued implementation -- you will be focus on -- focusing on in the next year is the continued implementation of the tax cuts. what lessons have we learned about how this is being implemented? guest: this is a heavy lift. the irs has to reprogram computers. they've have -- they have scores of tax reform forms that need to be changed. the treasury department has wanted the irs to come out with a new 1040 and eliminated --

eliminate the 1040a and the 1040e. people it will be very simple. others will have instead of just one or two forms they will maybe even have to file six schedules. that's out there for review. or you can gopage and look at it and i would encourage people to go and look at it and weigh in on what they think. irs andried about the the heavy lift for the filing season getting all the systems programmed. will this filing season need to be delayed? in many ways they are going to get it done. they will get it done. i don't doubt that. my second level of concern is what doesn't get done in order to deliver tax reform? some of the normal improvements for taxpayer service and things like that get put on the back burner while you are trying to do something like this.

host: what seems to confuse taxpayers the most when it comes to the tax cuts and jobs act? guest: one thing that is going to be a big issue for small business and self-employed is 199 cap a. 20% reduction for pass-through entities. that could be sole proprietors, partners, persons who have limited single owned limited liability companies. the first draft of the regulations for that provision that didn't yet go public or 261 pages and i don't think a small business person is going to read 261 pages. i think it's down to about 135. but it's very complex. worried that different advisors will say one thing or another thing. the irs may say something completely different. host: you have talked about your concern about a shrinking irs budget.

and how that's going to affect taxpayers. when it comes to the tax cuts and jobs act what more requirements are being put on the irs and was there any money built in to do that? guest: there was about $395 million that congress gave over two years for the irs to implement that and it will be able to hire more employees, particularly to answer the phones. in my june report we tested some questions under the old tax law. that came out of this program. last time a lot of people called up and said, has this changed? first of all what we've done in my organization is we have created a website at taxpayer advocate. irs.gov. you can go there and look up questions by topic or you can formlly go to the 2017

1040 and click on the line and see whether anything has changed in the law whether it has gone up or gone down. if you click on dependency exemptions that like there are no more dependence. we have a child tax credit. at least you can look at your old tax return and say i wonder what's changed for next year. that's on our website and we tested some questions calling into the irs toll-free line. old law, law that hadn't changed and new law and we got really varying results. or has not been a lot of training on irs employees. if you call it may not be able to get answers to your questions as you are trying to plan and that's what i'm really concerned about. are people going to get good aboutation from the irs the tax reform. host: give viewers the website one more time. advocate.payer irs.gov/tax changes.

with ninang questions olson. talk about your interaction with the irs. brett isup first -- up first in florida. caller: good morning. and i tooklover ira about 10,000 last year with no taxes. how much can i take out with the new tax law without paying no taxes? all, depending on your age, if you are 59 and a half or older then you won't have an early withdrawal penalty on an ira. because if you take your money out of the ira early before you are of what the congress has determined is retirement age starting at 59 and have they are going to penalize you because it is supposed to be in your savings for retirement. at that point congress and the

increase the standard deduction to $12,000. muchs a baseline for how you would be able to take out. that's the standard deduction. think about that as the baseline. it also depends on what other kind of money -- income you have. that $12,000 covers all of your income. host: james in jackson, mississippi. go ahead. caller: good morning. i know you are on the show about three or four months ago. i found my taxes on february 1, 2018 of this year. in the situation going through right now is that i have a 13-year-old and i have twin girls and their 11 years old and i have been claiming them since day one. now i'm getting an audit.

and they want all this information. i'm in the process of going to the tax advocate as we speak. they want all types of information. birth certificate, school records. shot records. my apartment plumbing records, w-2 forms. i was wondering how long does that take to be processed because i have been calling the irs twice a month for the past i would like to know what is the hold up on this and how long will it take before i get my tax return. have a nice day. guest: thank you for calling. first of all i do encourage you to go to the taxpayer advocate service. you called in so you can tell them that their boss sent you. if you look in the phone book on -- or on our website there is at least one office in every single state.

wherever you live there is a local taxpayer advocate office serving your stay. some large states have more than one. when you go to the taxpayer advocate service you get one person assigned to your case and you will have an 800 number that rings right onto that person's extension. you might have to leave messages for that person but you are leaving it for a human being who has responsibility for your case. legos goes to what you are under. you are under an audit which is called a correspondence audit. about 75% of all irs audits of individuals are done by correspondence which means that no one human being is assigned to your case. every time you have called the irs you have gotten a different person. and they are just looking on some system to see notes of whomever has made that -- talked to you before. but nobody is assigned to just handle your case. and a lot of times the documentation gets sent in and

it just sits there for a while until somebody is available to work it. what you need to do because this obviously you need to get through this. the system isn't working. it has been long and delayed. get to the taxpayer advocate service. we will get you one person assigned. the bad news is that the easiest and fastest way may either we ask you to send us everything you have sent the irs. because we may not be able to find it in the irs. if we can get it from you then we can bundle it up perfectly. send it over and say, you need to deal with this in a certain amount of time and if you have questions you have to come back to us. we may say, you've got enough information. you don't need any more information. make the decision. as person is entitled etc. host: the caller's concern is about audits. you have coined a term, real and unreal audits. what is the difference and why do they concern you? guest: an audit under the law as

an examination of taxpayers books and records like what this gentleman was discussing. you can claim something on the return and now what it got to backup your entitlement to claiming your children as an exemption. have they lived with you for more than half the year? have you paid for more than half their support? etc. so that's an audit. the significant and that is that once the irs is doing it, one audit for ataxia. it is very unusual for them to do a second audit for the same year. you are done for the year unless there has been fraud or misrepresentation. with an unreal audit which is really the bulk of what the irs the in its contacts with taxpayers, takes like sending them a notice and saying you left off your 1099 for interest off of this return. here's the extra tax. or you left a w-2 off. or you haven't filed a return and they create one for you based on all of your w-2s that they've got on their systems.

lately they've been doing an enormous amount of math errors. you did something wrong but it doesn't amount to a full audit. that is youwith could do a full audit and any kinds of these other contacts, the irs has said they can go back several years and do these math errors which they've never done before. so you don't get any finality on your tax year. the other thing that it does is they report out an audit rate. right now their figures are less than 1%. but if you add in all of these like unreal audit and it's closer to 6% or 7% is the coverage of the united states. there's a lot more work going on and they are actually reporting and i think that is a transparency issue. so there are taxpayer rights issues, finality, appeals, and the transparency and accuracy of the full picture.

host: our breath in georgia -- barbara in georgia. good morning. caller: my husband died two years ago. he had an ira with a local bank. they send me the amount and so on. cpa.t it to my he pays tax on it. they won't give me the payout. i send them a certified letter saying please do that. nothing. they won't do it. guest: so you are asking for a full distribution of the account? caller: no. i'm just asking for the regular amount that is payout. i'm 80 and the account is dwindling down. pursuant to clause 8 of rule 20, proceedings will resume on motions to >> we take you live@floor of the house, a couple of votes tonight. 2345 b