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A Trip to the IRS Tax Forums, Page 2

2010-09-03 by

Problem Resolution and Focus Groups


Problem Resolution had a facility at the Tax Forum. One of my friends brought a case file with her (and power of attorney forms, etc.). When picking up her registration packet on Monday, she was given a form to fill out with the specifics of her case (and a copy of the power of attorney – Form 2848). By the time she arrived at her appointment on Tuesday or Wednesday, the staff had pulled up relevant information about her case and researched the stumbling blocks. She sat down with them and resolved all the problems in no time at all. This is a case that has been a source of frustration for many, many months. Her clients have a refund coming soon.

Those folks who are smart enough to take advantage of the Problem Resolution services at these Tax Forums and other IRS events generally walk away really happy. This is one of the essential services I would hate to see go away, if IRS stops operating these forums and turns continuing education over to the associations and private vendors like myself.

Focus Groups are another special benefit at these Tax Forums. You get to meet with IRS and Taxpayers Advocate (TAS) staff (and perhaps other groups within IRS) to discuss issues of concern about taxpayers’ and tax professionals’ needs and how the system addresses them. Topics I attended two sessions with TAS – IRS Structure and Small Business Issues.

We ran into a little glitch on the Small Business session. Nine of the ten panelists showed up early, so they wanted to convene the session 15 minutes early. My friend Kris was booked to attend, too. She wasn’t there yet, so I called her cell phone, telling her we were starting early. She never managed to get in – and one of the coordinators was giving me nasty looks. She complained that she had been turning people away, waiting for my friend to show up. We finally started at 9:00 am without Kris. Well…it turned out that one of the people they turned away WAS Kris. Despite her telling them she had RSVPd and was expected. Oh well, it was the last day. Staff was tired.

Humor and irony aside, what did we discuss, or learn?

IRS Structure

The biggest complaint from tax professionals about the current structure of IRS is lack of consistency.
Consistency within the database, consistency of information, consistency in administering tax policy.

Now that IRS has moved away from regional operations to more centralized campuses, we would have expected that all information about a taxpayer can be consisently accessed from anywhere in the system. That’s not the case. When a taxpayer talks to the IRS customer service line, or to any of the collections or examination staff, they are meant to make notations about the contact in the client’s master file. Yet you call back a few days later, and the system doesn’t show the details of the last contact. The taxpayer or Rep has to start all over again, providing information and back-up. It’s time-consuming, frustrating and leads to frayed tempers.

Another problem is that the central exam campus loses paperwork. One person talked about a 9-inch stack of documents they sent in that never got associated with their client’s file. Another about submitting documents that take forever to get linked to the file, in the meantime, the next cycle of notices is being issued.

At present, some notices provide a fax number allowing you to submit documents. However, no one ever acknowledges receipt of those faxes. So you don’t know if your pages arrived, or something didn’t get through, or…

I suggested that IRS take advantage of the current e-services system IRS already has in place. Presently, we can look up client data. But how about allow practitioners to upload their documents related to audits and colletions directly into the client’s file? There would be a date/time stamp on the submissions – and we would know if any pages didn’t arrive.

Small Business Issues

The big surprise here was that the Taxpayers Advocate Service offers services to small businesses. Frankly, except for problems with payroll tax issues, none of us could really think of business instances of contacting TAS.

So the first recommendation was to have TAS put together a guide on what services businesses can count on from TAS.

The question came up about what one thing businesses do not use to their advantage or know enough about? Tax Credits available to small businesses. We recommended that IRS produce a publication putting all small business tax credits into one place.

Other recommendations where information is needed:

..How to properly dissolve a business – especially how to close out the books.
..Clear and usable cancellation of debt formulas, with their effect on tax attributes.

Recommendation on rules to change, clarify or make more fair?

BIG SCARY ISSUE – bookkeepers, staff and anyone dealing with payoll even remotely, can be held personally liable when the owner or officers don’t pay payroll taxes. In fact, even whistleblowers, trying to correct the situation have suddenly found themselves being financially responsible when they tried to get their boss to do the right thing and the boss used the money frivolously instead. Totally unfair and unreasonable. More payroll defaults are expected as the economy gets worse. These rules must change.

Pension rules for small businesses and the administration of the pensions – too complicated. Too easy to run afoul of.

Medical benefits for small businesses. Come on, is it REALLY necessary to jump through the hoops, to hire your spouse, etc. to get medical benefits in your business? Puhlleeeze. Please, make the medical benefits for small businesses easier to claim and to administer.

Gifts – limited to $25 per person per year? This number hasn’t changed since the Revolution. You can barely even cover postage for this amount. Time to update deductible gifts, don’t you think?

The new 1099 reporting requirements. CRAZY! Need I say more?

For more about the classes at the Tax Forum stay tuned. This will continue on Page 3 next week.

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