These ideas came from Enrolled Agents who are members of the Minnesota Society of Enrolled Agents.
These ideas were discussed during a face-to-face meeting on January 2, 2020.
COMPREHENSIVE TAXPAYER EXPERIENCE STRATEGY
How do we think more holistically about our “customers” and their entire experience with the IRS (e.g. services, enforcement, other interactions)?
What are some key barriers to receiving service that taxpayers and/or taxpayers encounter? Please provide possible solutions / improvements for these problems.
What are some ways the IRS can improve the communications channels it uses to connect with tax practitioners / tax professionals?
The theme of the following suggestions is “how to make tax season more bearable for tax professionals and/or taxpayers who do their own returns”, which should improve accuracy and taxpayer compliance.
Go back to Form 1040 on one sheet, both sides. “Get rid of Schedules 1, 2, and 3. This was a gimmick to convince people that they can file their taxes on a postcard. No one is buying it. The new format is a nightmare and a waste of paper for tax professionals and taxpayers.”
Require all issuers of Form W-2 to use the same format. Tax professional software has the capacity to scan the W-2 and automatically “drop in” the information. Having a consistent format would make that more efficient.
Require the same format for 1099 statements issued by investment firms. It’s difficult to read and understand the information on a statement that contains Form 1099 INT, DIV, and B, when every company does it differently.
Require partnerships and S-Corporations to have a fiscal year end of September 30. That way the returns would be due on December 15. The partners and shareholders would have their K-1’s earlier. Right now, the period between March 15 and April 15 is a nightmare for tax professionals. Some partnerships and S-Corps actually do file by March 15, and some 1040 filers want or need to file by April 15. There’s too much pressure to get it a lot done between March 15 and April 15.
In many ways, the tax season is now all year round. Tax pros are crazy-busy from January to April. It does not slow down in the summer like it used to. It picks up in September and October because they are doing returns on extension. In November and December, they are gearing up for next year and getting CE credits. There’s no break. Maybe there’s no easy solution for this, but one idea is to extend the deadline to May 15 or May 30. This may give them time to do 1040’s that have K-1’s from 1065 or 1120-S.
Add a box or code on Form 1099-R for QCDs. QCDs are a permanent part of the law now. The population is aging and looking for ways to give money away. The number of QCDs will increase. Tax pros say that no matter what they do to get good info from the clients about QCDs (so they don’t fail to report them, or report an incorrect dollar amount), and no matter what they do to report QCDs correctly on the return, many of their clients inevitably get a CP-2000. A box or code for QCDs on Form 1099-R does require the IRS to spend time and money. Tax pros feel the time and money on the front end is worth it to all parties because time and money would be saved on the back end.
(End of “how to make tax season more bearable”)
Allow Form 1040-X to be e-filed.
Allow Direct Deposit for refunds on Form 1040-X.
Use PTIN renewal system to require PTIN holders to get e-News for Tax Professionals. The EAs feel that some tax pros take their profession seriously, and work very hard to stay up to date. Other tax preparers do not. The EAs realize that “you can lead a horse to water but you can’t make him drink”. However, requiring tax pros to get e-News might make more of them read it, and learn from it. PTIN holders should be automatically signed up to get it, and have to unsubscribe to not get it. This is similar to what many companies do when they automatically sign up new employees to be in the 401(k) program, and they have to opt out to stop contributing. Once tax pros are getting e-News, they might find it’s helpful.
DRAFT FORMS: Allow tax pros to sign up to receive a notification when a draft form is released. This would allow them to comment on draft forms in time.
Attitude of IRS agents. Several EAs commented that IRS agents need to adopt a more cooperative attitude. Some EAs feel like the IRS agents assume the EA is working against the tax system, when really the EA is trying to fix a problem so the taxpayer pays the correct amount of tax, just like the IRS mission statement says. They want IRS agents to remember that the IRS and the EAs/POAs are on the same team. They should at least assume that’s the case until the EA/POA shows them otherwise. “Innocent until proven guilty” in the courts. For the IRS, it should be “assume the POA knows their stuff and is trying to get the right amount of tax paid” until the POA says something that makes the IRS agent think the POA is up to no good (as a small number are).
Attitude of IRS agents, part 2. Immediately after the comments stated above, another practitioner spoke up. She is from a country where the government can’t be trusted at all, and government agents are not helpful, or they are actually harmful. Sometimes physically harmful! So this EA said “IRS agents are the kindest people!” In comparison to where she came from, IRS agents are the best. (It’s always good to have another perspective!)
Attitude of IRS agents, part 3: POAs and taxpayers who call IRS agents should have the opportunity to leave feedback at the end of the call. This is done in private industry, so why not the IRS? The IRS system should allow the caller to decide if they want to leave feedback when the call is done, not before the caller is connected to an IRS agent, because at that time they don’t know how the call is going to go.
Develop a system for practitioners where we can track the progress of an issue that is being worked. We understand that it takes time to work issues (CP-2000’s, correspondence audits, etc), due to complexity of the tax law and lack of IRS staffing. It’s the norm for it to take 6 to 12 months to get an issue resolved. Having a system where we can see that the IRS got our letter and is working on it would be helpful. Having an expected date where the IRS will contact the POA would be helpful. We could be certain that it’s being worked on, instead of wondering what’s happening, or being worried that nothing is happening. A system like this would reduce calls to PPS.
Hold collection letters until all returns and payments processed. If a taxpayer has many years of unfiled returns, would be it possible to notify the IRS that “tax years 2014 to 2019 are coming your way”. The tax pro could tell the IRS what each year shows for refunds or balance due. The IRS could hold refunds to apply to balance due years. The IRS should NOT send out any collection letters until all returns are processed, especially when the available refunds (not affected by the Refund Statute Expiration Date) will full pay the balance due years.
IRS should stop collection when there are unresolved issues. Tax pros say that this has been a problem for years. The right hand doesn’t know what the left hand is doing. One part of the IRS is working on resolving an issue that will result in no tax due, or less tax due. For example, the IRS is working on an “audit reconsideration”. But the IRS continues to send out collection notices or levies, even though everyone knows the balance due is going to go away, or be reduced to the point where an installment agreement would work.
Is there any way to get a list of which issues can be resolved by calling PPS or another IRS number, versus issues that require a letter? Sometimes a tax pro will call PPS and ask for penalty abatement, and it’s done over the phone. Other times, the PPS assistor tells them to write a letter. Is the policy always the same? Does it depend on the type of penalty or the type of tax? Is there a dollar criteria? This example of penalty abatement is just one example. Tax pros would like a complete list of when they can call to get things done, or when they must write a letter. They don’t want to spend 10 minutes to 2 hours waiting on hold (depending on what number they are calling) just to be told they have to send in a letter.
Tell callers the estimated wait time on all IRS customer service phone lines.
Give taxpayers and tax pros the opportunity to leave a message and get a call back.
- After this meeting, Karen found out that the IRS is doing a pilot project on this. More info:
- Tax pros have asked the IRS to offer a callback service. When they call in, if their call can’t be answered quickly, they want to have the option of leaving a voice message with their name and phone number, and have the IRS call them back. The IRS has a pilot program to test this. The service is available only on certain lines. Approximately 300,000 callbacks have been offered and 86 percent of those users accepted the callback option. The number of callback offers will continue to increase during FY2020.
- Karen will keep you posted as we continue this test.
How can the IRS better reach hard to serve taxpayer groups like Limited English Proficient (LEP), Low Income, and International for example?
(no suggestions provided)
How might we modernize the IRS organizational structure to better serve taxpayers?
(no suggestions provided)
How best can the Taxpayer First Act Office provide ongoing Taxpayer First Act updates from the IRS?
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Author: Karen Brehmer, firstname.lastname@example.org, 763-347-7375. Submitted 2/14/2020.