Nina Olson sits in her office at the IRS building in Washington, D.C.
It was supposed to be her benevolent deed for the day – helping a family member with a tax return. But soon Nina Olson was lost in the labyrinth that is the United States tax code.
The problem at hand was an Individual Retirement Arrangement (IRA) – how to know which contributions to it would be tax-deductible for a person who had some job income while also receiving Social Securitybenefits.
Yes, there's a special IRS worksheet for that. Three of them, actually, in Appendix B of Internal Revenue Service Publication 590.
"The calculations were so unbelievable," says Ms. Olson. "It was something like enter Line 2 on Line 12; divide by 83; multiply times four, and then times 0.125 or something."
Olson stoically did the best she could. But it wasn't good enough. The Internal Revenue Service (IRS) ended up notifying her family member of a mistake on the calculations.
It's the kind of bad tax day that could happen to anyone. As it turns out, though, Olson isn't just any average American. She's one of the most knowledgeable people on earth about the IRS and US tax law.
By the time she wrangled with these worksheets in exasperation, she had already made a whole career in the tax field: earning a living preparing returns, becoming a tax lawyer, founding a nonprofit to help people with tax problems, and then assuming the role of National Taxpayer Advocate – a kind of "voice of the people" within the IRS. If Olson finds the tax code bewildering, it's little wonder millions of Americans do, too.
Taxpayers, meet your champion at the agency you love to loathe. Citizens tired of form-filling burdens, meet someone who agrees with you and who has a megaphone in Washington – a big one.
She's not just another ombudsperson at some random federal agency. The IRS, as Americans are reminded every April 15, is the government's revenue-collection arm. And with nearly 100,000 people working at the agency – scouring returns, conducting audits, filing lawsuits against delinquent payers – that arm is a long one.
To enter Olson's world is to gain a rare view of the workings of a federal revenue machine that takes in about one-fifth of America's annual income, currently in excess of $2.3 trillion. It offers a window into the flaws of the tax code and the trials individuals face with the IRS.
In some respects, the woman who sits at the center of this vilified but vital institution isn't any different from you or me. She's a single mother, a pet lover (one dog and two cats), a knitter, a fine-arts major who dabbles in textile design on weekends. And, yes, she does her own tax returns.
Yet there are differences, too. She sits down the hall from the all-powerful commissioner of the IRS, oversees 2,000 people, travels the country giving speeches about a tax code as impenetrable as a Kevlar vest, testifies regularly before Congress, and, most important, gets paid to question – even defy – her employer on your behalf.
Olson wields significant clout, influencing policy on Capitol Hill and within the IRS, where her army of caseworkers can win relief for as many as 200,000 individuals per year. Many experts say she's been not merely an effective National Taxpayer Advocate (NTA), but also has largely defined the job during its formative period.
Nina Olson is the National Taxpayer Advocate – the voice of the public at the IRS. She's trying to help you navigate the tax code you love to loathe.
"She has very much shaped the office," says Christopher Bergin, publisher of Tax Analysts, a leading tracker of the tax code. "She's tenacious. She's brilliant. She's a hard driver."
Olson describes herself as an accidental occupant of the office. She never set out with a goal of holding a prominent government position, but her background girded her with some crucial job traits: knowing the tax problems Americans face and being unafraid to battle entrenched powers.
Even though her authority on setting tax policy is limited – the job of enacting long-term fixes rests with Congress – she can use her office as an amplifier for the concerns of average citizens. At a time when at least some members of both parties are talking about the need for sweeping tax reform, some of her ideas could capture more attention.
She has been a consistent crusader in particular for simplifying the federal tax code – a tangled tome that today contains nearly five times the number of words in the Bible.
* * *
Part of Olson's philosophy in running the advocate office is rooted in a dirty kitchen. While still in college, she took a break from course work to launch a vegetarian restaurant with friends. They scraped together used equipment to outfit the kitchen. Other than knowing how to cook, "we had no idea what we were doing," she says.
When a public health inspector showed up one day, "he could have shut us down on the spot." Instead, Olson says, he listed the five most urgent problems and said those had to be fixed when he came back the next week. He followed the same pattern for four more weeks. Each time the youthful proprietors got five more things to fix and seven days to do it.
"That was an incredible lesson," Olson says. The restaurant was able to stay in business, all because an official was willing to work with people to bring them into compliance.
The parallel to her current job: As the NTA, she wants to help well-meaning taxpayers get treated fairly and to prod the IRS to be humane in its dealings with people.
Public policy experts say it's inevitable that the agency must seek a balance between hard-headed collection and what can plausibly be called customer service – efforts to help tax-payers understand and navigate the system more easily. The two objectives aren't necessarily incompatible. Olson's job is to nag and goad the agency – sometimes in ways that rattle top IRS officials – yet that role arguably benefits revenue collection as well as taxpayers. An angry or befuddled taxpayer, after all, is less likely to send in money voluntarily to help pay the nation's bills.
Still, the job description is awkward. If Olson pushes too far, IRS insiders could lash back against the gadfly in their midst. If she isn't pushy enough, outside critics will wonder if a supposedly independent voice has been co-opted by the agency where she's employed. (For the record, the NTA is appointed by the Treasury secretary – and can be asked to leave by the secretary – but the IRS commissioner is typically an influential voice at Treasury on key decisions affecting the IRS.)
The built-in tension in Olson's job came about by Congress's careful design.
"This is ... one thing they got right," says Scott Hodge, president of the Tax Foundation, a research group in Washington. "They gave it complete independence within the IRS."
Being an insider means Olson and her staff know the IRS intimately. Being independent means she can feel like her own boss.
Congress took care not to give the NTA powers that directly rival those of the commissioner. Essentially Olson can recommend or urge actions, not decide things on her own. But where the commissioner needs to work through administration channels (the Treasury secretary and White House), Congress calls on the NTA to make her own recommendations for legislation and IRS reform at least once a year.
