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AICPA & Other Groups Call For Improvements To IRS Services



Annette Nellen

Years ago, the IRS had about 104,000 employees. Today it is around 83,000. Certainly, they don’t need as many people to open envelopes due to e-filing, but this change results in a big drop in taxpayer services and audits. A common lament I hear from tax practitioners is the challenge of having to deal with notices from the IRS. It is difficult to get to talk to someone from the IRS who has the knowledge and file access needed to resolve the issue and you likely need to wait 30 minutes or more to talk to someone.

Today, less than 1% of individual returns are examined (it’s higher for higher income returns). Many of these exams are via correspondence. This harms voluntary compliance, increases the tax gap and results in greater borrowing by the government and reduced spending. It is also unfair that some taxpayers will get away with both intentional and unintentional errors.

This is all very unfortunate.

In May 2015, the AICPA Council passed a resolution calling for, “policy makers to create an objective, bi-partisan forum to engage stakeholders to expeditiously make recommendations that enable the Internal Revenue Service to achieve its stated mission and to transform it into a modern-functioning, evolutionary, and respected federal agency for the 21st Century.”

Earlier this year, the AICPA Tax Section called together several practitioner groups to work together on getting comments to Congress on the importance of improving IRS taxpayer services and offering various suggestions. One of the suggestions is to create a new unit to serve tax practitioners (about 60% of returns are prepared by a paid preparer).

I hope you’ll take a look at the IRS transformation framework suggested (and 4/3/17 press release). As chair of the AICPA Tax Executive Committee I’m proud and pleased to have been part of this effort to highlight the need for a 21st century focus at the IRS and the need to be able to serve all stakeholders. Hopefully Congress will consider these suggestions as part of tax reform or any tax administration legislation.

What do you think?

Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.

Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.

Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.

Prior to joining SJSU, Annette was with Ernst & Young and the IRS.

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One comment

  1. Michael Murphy says:

    Thank you, Annette. Hope you are well. FYI, I believe IRS had more than 120,000 when I retired from IRS in 1992. I’m all for improving the manner in which IRS communicates with Tax Practitioners, but, the only way to improve compliance is for the Administration and Congress to provide the IRS Commissioner with the necessary resources to improve enforcement. Frankly, I have been disappointed that AICPA, ABA and other organizations have not been visible in this area. The Commissioner needs help and not criticism from certain members of Congress. Keep up the good work, Annette. Mike

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