Fairer taxes for all: Insights from US tax advocate Nina Olson

Effective tax advocacy safeguards taxpayer rights, ensures fairness, and promotes ethical governance, says Nina Olson, Executive Director of the Center for Taxpayer Rights

The fairness of the US tax system is a frequent subject of debate. Federal income taxes in the US are progressive, meaning that higher earners pay a greater share of their income in taxes. Currently, the wealthiest 1%, who earn approximately 22% of all income, contribute more than 40% of total federal income taxes. However, state and local taxes often disproportionately burden lower-income groups due to their reliance on regressive taxes, such as sales and property taxes. Additionally, the effective tax rate for the wealthiest Americans has significantly declined, from approximately 59% in 1979 to under 35% by 2004, reducing the overall progressivity of the tax system and contributing to increased income inequality. 

What lessons can Australia draw from these experiences, and how can we ensure that our tax system remains fair and protects the most vulnerable? 

UNSW Business School's Associate Professor Ann Kayis-Kumar, Founding Director of UNSW Tax and Business Advisory Clinic, recently spoke to Nina Olson, Executive Director of the Center for Taxpayer Rights, to learn more about the critical role of taxpayer advocacy, particularly in the context of ongoing debates about fairness and equity in taxation in the US.

Protecting taxpayer rights: three core principles  

Ms Olson, who served as the National Taxpayer Advocate in the US for 18 years, is renowned for championing taxpayer rights. Her advocacy has significantly influenced global discussions about systemic tax reform, transparency, and fairness, particularly for vulnerable populations. 

Central to Ms Olson’s advocacy was the adherence to fundamental taxpayer rights outlined in the US Taxpayer Bill of Rights, specifically emphasising privacy, fairness, and the right to challenge IRS positions. “You have the right to expect that the government’s examination, collection, whatever action it's taking, is no more intrusive than necessary,” she said. “Its actions are not just because it can. You're really looking at doing the minimal that you need to do to get the information or collect something.” 

She also underscored the importance of taxpayers' rights to due process. “Taxpayers have the right to challenge the IRS position and be heard, and that is based on fundamental due process. Taxpayers need to know the government has an obligation to listen,” she said. 

Ms Olson also highlighted the critical need for tax authorities to tailor their approaches to individuals' unique situations, particularly those facing significant barriers.  She explained: “Taxpayers have the right to expect that the IRS will look at their specific circumstances. Their financial literacy, their digital literacy, if they are survivors of domestic violence, if they have disabilities – it doesn't matter what their education level is, it needs to factor into whatever kind of determination it's making.” 

Learn more: “A tariff is a tax”: Janet Yellen warns tariffs could trigger recession

Currently, the Center for Taxpayer Rights is a lead plaintiff in a lawsuit against the IRS, the Treasury Department, and the Department of Government Efficiency (DOGE). Ms Olson has warned that deep IRS staff cuts and the agency’s collaboration with DOGE jeopardise its capacity to process returns, enforce compliance, and safeguard taxpayer confidentiality. The lawsuit alleges that the IRS unlawfully shared protected taxpayer data, violating federal law, specifically Section 6103 of the Internal Revenue Code, which restricts disclosure of return information without explicit statutory authorisation.

Career lessons: courage and commitment  

Ms Olson has urged tax professionals, researchers, and policymakers to adopt broader perspectives that extend beyond individual client cases. She emphasised the broader societal impact policymakers and professionals can achieve by expanding their scope. 

“I think oftentimes, particularly for tax professionals, they're just looking at the case in front of them,” Olson remarked. “It's really hard to pull back and say, 'What about the larger picture, or what about groups I'm not necessarily representing, but the issue I'm raising will impact them?'” 

She has also advocated for inclusive professional ethics: “There is a duty on tax professionals to think just beyond their client base to all others, particularly those who cannot afford them, so that what they're doing actually furthers protections for all.” 

Despite clear principles and guidelines, Ms Olson acknowledged significant barriers within institutional structures, reflecting on moments when personal risk was necessary to uphold advocacy values. And one particular defining moment in Olson's career vividly captures her unwavering commitment.

“I was having a particular struggle with the agency and was going to go public," she recounted. "I knew if nobody cared, I could lose my job. But I thought, ‘I'm the Taxpayer Advocate. It's my job to do this.’ And then, ‘I have to act as I'm living in my own skin. If I'm not willing to go to the mat on something, how do I live with myself the next day?’” 

Her actions have drawn significant media attention, notably a lead editorial in the New York Times, validating her courageous stance and bolstering her advocacy further. However, Ms Olson’s commitment also reflects broader lessons on professional ethics and individual responsibility.  

“I always approached my career like this is the most important thing I'm doing right now,” she explained. “Everyone said, 'pick your battles.' But I thought, 'What do I say to the person whose battle I'm not picking?'” 

Ms Olson’s advocacy is especially pertinent in the context of recent controversies involving President Donald Trump and the IRS. President Trump's contentious audits, allegations of interference in IRS personnel decisions related to immigration policy, and increased public scrutiny have highlighted systemic issues surrounding taxpayer rights and institutional accountability. 

Subscribe to BusinessThink for the latest research, analysis and insights from UNSW Business School

These recent events highlight Ms Olson's concerns about balancing enforcement with protecting individual rights. The Trump-IRS disputes show how challenging ensuring public trust through rigorous but fair tax compliance really is. Building a fair tax system demands commitment, courage, advocacy, and ongoing vigilance, and Ms Olson's career demonstrates that upholding taxpayer rights requires more than technical expertise – it demands respecting taxpayer dignity in policies and protecting the most vulnerable.

Building an equitable tax system amidst uncertainty 

So how can Australia better incorporate taxpayer rights, such as the right to be heard and to individualised treatment, into our tax administration processes, especially for vulnerable groups?  

UNSW Business School’s Associate Professor Ann Kayis-Kumar said she believes the answer lies in how faithfully the Australian Taxation Office (ATO) upholds the commitments set out in its own Taxpayers’ Charter, particularly for those who are most at risk of falling through the cracks. She pointed to a 2016 report by then-Tax Ombudsman Karen Payne, which grappled with the complexity of strengthening taxpayer rights in Australia. As Payne noted at the time: “The question of whether there are sufficient taxpayer rights in Australia, and whether the ‘right’ in the Charter should be expanded, is not simple or straightforward … To the extent that the ATO strictly honours its Charter commitment … taxpayers will have little need to rely on this doctrine.” 

However, A/Prof. Kayis-Kumar explained that the problem arises when the ATO departs from these commitments. “Taxpayers have little recourse,” she said, and vulnerable individuals are disproportionately affected. That’s why she sees the principle of individualised treatment as fundamental to a fair system. Without it, systemic blind spots risk marginalising those least equipped to navigate the tax system. 

To help close this gap, the ATO has released a draft vulnerability framework. Although this is non-binding, A/Prof. Kayis-Kumar views it as a step toward aligning tax administration with evolving community expectations. But for these efforts to succeed, she said robust oversight is essential. The Tax Ombudsman must be both empowered and well-resourced. “While this framework will be non-binding and no panacea, it signals that the ATO is gauging and adapting its practice to community expectations,” explained A/Prof. Kayis-Kumar. 

“This effort must be backed by a strong and well-resourced Tax Ombudsman to ensure accountability, as the current Tax Ombudsman, Ruth Owen CBE, has exemplified with her investigation into financial abuse within the tax system, demonstrating the kind of proactive oversight needed to uphold trust and confidence in the tax system,” she said.