The Purple Book

What Is the Purple Book?

The Purple Book is presented as part of an annual report to Congress by the National Taxpayer Advocate, who is part of the Taxpayer Advocate Service. The book contains a list of legislative recommendations on how to improve taxpayer services in the U.S. The color purple represents the bipartisan nature of the recommendations, as red and blue together make purple.

Key Takeaways

  • The Purple Book contains legislative recommendations to improve taxpayer services.
  • The National Taxpayer Advocate presents the Purple Book as part of an annual report to Congress.
  • Currently, the Internal Revenue Service does not have sufficient funding to meet taxpayer needs.

How the Purple Book Works

The National Taxpayer Advocate is required by law to present an annual summary of taxpayer issues and key areas in need of policy changes to Congress. The report must include a summary of the 10 most important legislative proposals. Annual reports also typically include:

  • Highlights of Taxpayer Advocate Service success
  • A supplemental review of the previous filing season
  • A report on most litigated issues
  • Research and related studies
  • The Purple Book

Since 2017, the National Taxpayer Advocate has presented a Purple Book to Congress each year as part of the annual report. Each book is a compilation of “noncontroversial, common-sense reforms” that typically receive bipartisan support. According to the Office of the Taxpayer Advocate, 50 of the proposals have become law. More than 20 of these recommendations were included in the Taxpayer First Act of 2019.

The list of recommendations is presented in a user-friendly way, with the recommendations separated into categories. For each recommendation, the Purple Book includes a summary of the present law, the reasons for the proposed changes, and a legislative proposal. The appendix includes reference material for each recommendation featured in the book. This includes bills consistent with the proposals that have been approved by the full House or Senate.

50

The number of tax reform proposals in the Purple Book that have become law since 2017.

History of the Purple Book

During the two years preceding the inaugural Purple Book, Congress had shown interest in Internal Revenue Service (IRS) reform. The idea behind the book was to provide tax-writing committees with a summary of important legislative proposals.

The first Purple Book was introduced in 2017, and it presented these proposals in a clear and concise manner. It included brand-new proposals, as well as previously introduced legislation dating back to 2003, and was created by Nina Olson, the National Taxpayer Advocate from March 2001 until July 2019. She was replaced by Erin Collins in 2020.

One of the most important initiatives was to request that Congress codify the Taxpayer Bill of Rights as Section 1 of the Internal Revenue Code. The Taxpayer Advocate Service believes that taxpayers serve as the foundation of the U.S. tax system, as the system relies on taxpayers to willingly report income. However, there were concerns about the IRS being unresponsive to taxpayers.

The IRS added the Taxpayer Bill of Rights to the Internal Revenue Code in 2014. All of these rights had already existed in the tax code, but the new format was an easy-to-digest list.

Special Considerations

The legislative recommendations in the Purple Book focus on strengthening taxpayers’ rights and improving tax administration. The most recent volume, the 2022 Purple Book, released on Jan. 12, 2022, still contains previous proposals that would increase funding for the IRS. Insufficient funding is an ongoing issue that has caused additional problems for taxpayers.

One of the biggest problems facing the IRS is a lack of resources needed to meet taxpayer needs. Based on research from last year's annual report to Congress, IRS funding has declined by 20% over the last decade. This lack of funding is the main reason behind many of the most serious issues, which include:

  • An aging and inexperienced IRS workforce
  • Inadequate IRS customer service
  • Obsolete technology
  • Limited functionality of online taxpayer accounts

The 2022 Purple Book includes a proposal to revamp the IRS budget structure to provide sufficient funding to improve the taxpayer experience. The additional funding would also be used to improve and modernize technology services.

Article Sources

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  1. Taxpayer Advocate Service. “National Taxpayer Advocate 2022 Purple Book,” Page v.

  2. Taxpayer Advocacy Service. "2021 National Taxpayer Advocate Annual Report to Congress."

  3. Taxpayer Advocate Service. "National Taxpayer Advocate Purple Book Introduction."

  4. Taxpayer Advocate Service. “National Taxpayer Advocate 2022 Purple Book,” Pages 1-2.

  5. Taxpayer Advocate Service. “National Taxpayer Advocate 2022 Purple Book,” Pages 142-151.

  6. Taxpayer Advocate Service. "The National Taxpayer Advocate “Purple Book”: A Summary Presentation of Our Top 50 Legislative Recommendations."

  7. Taxpayer Advocate Service. "National Taxpayer Advocate Purple Book Introduction."

  8. Taxpayer Advocate Service. "Nina E. Olson (2001–2019)."

  9. Taxpayer Advocate Service. "Our Leadership."

  10. Internal Revenue Service. "IRS "Taxpayer Bill of Rights" Now Available in 6 Languages; 10 Key Rights Outlined in Updated Publication 1: Archived Content."

  11. Internal Revenue Service. "National Taxpayer Advocate Delivers Annual Report to Congress; Focuses on Taxpayer Impact of Processing and Refund Delays."

  12. Internal Revenue Service. “National Taxpayer Advocate Delivers Annual Report to Congress; Focuses on Taxpayer Impact of COVID-19 and IRS Funding Needs.”

  13. Taxpayer Advocacy Service. “National Taxpayer Advocate 2022 Purple Book,” Page 3.

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