The Internal Revenue Service's efforts to upgrade services are hurting the nation's poor, a taxpayer advocate says, with many losing the ability to challenge incorrect audits because they don't have computers at home.

Janet Spragens, director of the American University Federal Tax Clinic, told an IRS oversight board that a move to decentralize and modernize the tax collection system is causing those who can least afford it to pay more taxes than they should.

"Many taxpayers would rather give up than fight the system," she said. "The result is that they are paying taxes they do not owe, losing refunds to which they are entitled and incurring penalties that should not be imposed."

The IRS has spent billions in trying to update its antiquated computer systems and in the process, closed many of its walk-in offices people could visit to sort out problems with a tax officer in person.

Instead, the agency created call-in centers and upgraded computerized services that enable many more taxpayers to deal with the IRS online.

"Low income taxpayers to a very large extent are not part of the new electronic age which is the centerpiece of modernization," Spragens said. Many also don't have regular phone service.

Steve Nickles, a Wake Forest University professor and member of the oversight board, said it would hard for the board to argue against modernization because Congress mandated those efficiency goals.

Board members were told the IRS should have toll-free phone and fax numbers for the poor and do more to spread the word about 140 offices for low-income taxpayers.