The annual public meeting of the IRS Oversight Board assures tax practitioners of at least one chance each year to grade IRS's performance and offer advice. One of the most important messages the AICPA delivered at this year's meeting, held earlier this month in Washington, D.C., was to emphasize how key "vibrant funding" is to IRS's success in fulfilling its customer service and enforcement responsibilities. The AICPA urged the Board, which is responsible for reviewing the IRS budget request, to support full funding of the Service's budget as Congress begins its budget deliberations.

AICPA's tax practitioner members have "seen first-hand the problems caused by an IRS that is not responsive to taxpayers as customers," the AICPA told the Oversight Board. Reductions in IRS funding requests that focus on customer service will only undercut efforts to improve compliance, and the nation's taxpayers will suffer as a direct result, AICPA cautioned.

Another important AICPA message to the Oversight Board was that IRS must not leave behind taxpayers who can't afford or who don't have access to computers and other new technologies. AICPA noted that IRS is continuing to rapidly expand delivery of services to taxpayers through technology. It's understandable that IRS officials have moved in this direction, AICPA said, because technology-based services allow for improvements in service at the same time they cut service costs. However, IRS has to be sure to be responsive to all taxpayers -- not just those who can access services over the Internet.

A hot button topic for many participants at the meeting -- as it was for the AICPA -- was IRS's failure to consult with tax practitioners on important policy changes. One example of this occurred in December when IRS announced it was increasing user fees for 2006. AICPA opposes the user fee increases. Taxpayers seek advance assurance from the IRS about the tax consequences of certain transactions, and AICPA is concerned that increasing the fees is likely to result in fewer taxpayers using these critical IRS programs. Furthermore, a decline in the use of such programs as private letter rulings, requests for changes in accounting method, corporate pre-filing agreements and Advance Pricing Agreements could result in greater compliance costs for taxpayers and enforcement costs for the IRS.

Written by Tom Purcell, CPA
Chair, Tax Executive Committee
American Institute of Certified Public Accountants and
Associate Professor of Accounting and Professor of Law at
Creighton University