Today the National Taxpayer Advocate released her FY 2017 Objectives Report to Congress, identifying the priority issues that she and TAS will address during fiscal year 2017.
For the last two years, the IRS has been developing a “Future State” plan that envisions how the agency will operate in five years and beyond. In the National Taxpayer Advocate’s 2015 Annual Report to Congress, the NTA praised aspects of the plan but expressed concern that (i) the IRS’s intent in developing online accounts is largely to save money in light of recent budget cuts by reducing telephone and face-to-face assistance and (ii) many taxpayers will not conduct business with the IRS through online accounts because they lack internet access or skills, cannot complete the authentication process required to set up an account, do not trust the security of the IRS system, or would prefer to speak with an IRS employee. As a result, she expressed concern that critical taxpayer needs may go unmet under the Future State plan.
To provide a vehicle for direct public comment, the NTA held Public Forums around the country, eight thus far with more scheduled for this Fall. Some were held in conjunction with Members of Congress who serve on committees actively engaged in IRS oversight. At each of the Public Forums, she heard from a panel of representatives of the communities she visited. Most panels included a representative from a Volunteer Income Tax Assistance (VITA) site and a Low Income Taxpayer Clinic (LITC); an attorney, Certified Public Accountant, or Enrolled Agent active in representing individuals and small businesses; and witnesses who focused on challenges faced by particular taxpayer groups, including English as a Second Language (ESL) and immigrant taxpayers, elderly taxpayers, farmers, U.S. taxpayers living abroad, disabled taxpayers, victims of identity theft, and small businesses victimized by payroll service provider fraud.
The report contains extended excerpts from the comments of taxpayers, practitioners and panelists who spoke at the Public Forums, organized around key concerns that the NTA identified in her earlier report or that taxpayers and panelists consistently raised throughout the Public Forums.
The National Taxpayer Advocate writes:
“Although the National Taxpayer Advocate has been charged by Congress to be the voice of the taxpayer inside the IRS, what we heard at the Public Forums around the country were the voices of real taxpayers and their real representatives. They are compelling, articulate, and clear about what they need in order to comply with the tax laws.”
These comments are organized around several of the concerns about the IRS Future State plans that were identified in the 2015 Annual Report or consistently arose in the Public Forums. They are:
- IRS engagement with taxpayers and practitioners and how to increase trust in the tax agency (page 4)
- Building a Future State before the IRS current state of taxpayer service is fixed (page 8)
- The taxpayer experience as told by taxpayers (page 16)
- The continuing trend away from person-to-person and face-to-face taxpayer service and compliance activities, including audit, collection, and appeals, as well as a declining geographic IRS presence and increased centralization (page 19)
- The benefits and limitations of online accounts (page 24)
- Doing digital right (page 32)
- The lack of clarity around what will be offered as self-service online options, and the legal and due process implications of “self-corrections” (page 37)
- The implications of online accounts for taxpayers with limited online access or digital expertise, and the impact of security concerns on taxpayer online account usage (page 41)
- The implications of granting access to taxpayers’ online accounts to unregulated return preparers (page 45)
- The increasing workload for VITA sites and the compression of the filing season for professional tax preparers (page 47)
- The IRS Mission — what should the IRS be focusing on in the 21st century (page 49)
The report also provides an assessment of the 2016 filing season. The NTA notes the increase in calls answered by the IRS and reduction in wait times for taxpayers calling the IRS. The National Taxpayer Advocate attributes this improvement both to additional funding by Congress and the effective use of the funding by the IRS. However, the report notes that IRS funding remains almost 20 percent lower now than in FY 2010 accounting for inflation, requiring the IRS to limit or eliminate important services for taxpayers.
In addition to the IRS Future State plan, the report identifies and discusses other priority issues the Office of the Taxpayer Advocate plans to focus on during this upcoming fiscal year. Among them are the following: FATCA Burden, Private Debt Collection Implementation, IRS Levies on Retirement Accounts, Online Taxpayer Accounts, EITC Compliance, and Identity Theft Victim Assistance Procedures.
The full Objectives Report explores these and other issues that the National Taxpayer Advocate intends to address in the coming year.
Full Public Forum Transcripts are available at www.taxpayeradvocate.irs.gov/news/national-taxpayer-advocate-public-forum-transcripts.
Volume Two of the report will contains the IRS’s responses to the administrative recommendations the National Taxpayer Advocate made in her 2015 Annual Report to Congress, along with additional TAS comments. It will be released in late July 2016.