The principal strategic goals of the IRS over the next five years should be to continue to build on the agency’s reorganization, to support the information technology modernization efforts, and to strengthen enforcement activities, the American Institute of Certified Public Accountants (AICPA) said at a meeting of the IRS Oversight Board.
Improved communication was highlighted by Mark VanDeveer, chair of the AICPA’s IRS Practice and Procedures Committee, as a necessary central feature for the IRS’s next five-year strategic plan in order for the agency to successfully build on the restructuring it has already implemented.
He praised the communications endeavors that the IRS initiated following the restructuring, but noted that many of the improvements have come at the national level and that improvement has been less consistent at the local level. “That’s where most taxpayers and tax practitioners interact with the IRS, and it is local communications issues that must be the focus of the next strategic plan,” he said.
For example, he said, providing an up-to-date telephone directory of local area IRS personnel may seem “relatively mundane,” but the “absence of this information creates a great deal of frustration.” Such directories are necessary, VanDeveer said, because the responsibilities of local IRS personnel are split among the four operational divisions, and many practitioners represent clients covered by more than one of these divisions.
“No organization that aspires to serve its customers well can afford to make contacting the ‘right person’ so difficult,” VanDeveer said. Any new strategic plan should encourage the publication on the Internet of national and local directories of IRS employees, he said.
Another way the IRS could improve its communications is by reviewing and updating revenue rulings and revenue procedures. Timely guidance is one of the IRS’s most effective communication tools; updating these pronouncements should be a priority, he told the panel.
A commitment to an investment in IRS staff is another essential component of the reorganization effort because “some of the most frustrating experiences realized by taxpayers and tax practitioners in dealing with the IRS occur because of a lack of training on the part of the IRS employees,” VanDeveer said. The AICPA strongly supports efforts to hire and train new employees and replace the Service’s aging workforce, he said.
VanDeveer also advised the panel that a new strategic plan for the IRS must continue to support the Office of the National Taxpayer Advocate. “The Taxpayer Advocate plays a critical and valuable role in identifying and addressing system problems in addition to resolving specific taxpayer issues. We strongly believe that continued support of the Advocate will reap a significant increase in taxpayer confidence, improved tax administration, and Congressional awareness,” he said.
With respect to information technology modernization efforts, VanDeveer said that while the AICPA is aware of the conclusions in the Oversight Board’s report regarding the Business Systems Modernization project, “We strongly urge the IRS Oversight Board and Congress to stay the course in terms of their support for appropriate funding for the modernization effort.” This must remain a central feature of IRS’s strategic plan for the next five years, he said. VanDeveer explained that the BSM program is designed to change the entire way the IRS conducts business with taxpayers and practitioners by implementing systems to improve IRS effectiveness in receiving, routing, and responding to millions of taxpayer telephone calls, supplying IRS agents with software capable of accurately assessing a taxpayer’s liability when faced with a complex tax matter or calculation, establishing a modern, reliable data base, and implementing a nationwide e-mail and voice-mail messaging system for IRS employees.
The IRS’s success in getting 53 million Americans to e-file their returns in 2003 and the phase-in of electronic filing of business returns were applauded by VanDeveer. He also noted that the “IRS has taken some positive steps during the last year to listen to the practitioner community about the myriad of problems tax professionals still face” concerning e-filing and urged the IRS to continue this exchange as the Service shifts its electronic filing focus from individual returns to business returns.
In the area of enforcement, VanDeveer said the AICPA supports the major compliance initiatives the IRS has undertaken, for example those focused on abusive tax shelters, offshore credit card users, high-income non-filers and unreported income. The AICPA also supports the IRS’s efforts to reengineer its examination and collection efforts so that IRS audits of taxpayers focus on material issues within the audit. “Our members appreciate constructive ways to better target the overall scope of an examination, because it will reduce taxpayers’ burden in terms of the time and cost of an examination,” VanDeveer said.