The American Institute of CPAs (AICPA) is seeking ways to improve the efficiency and independence of the IRS dispute resolution process.
In recent testimony to the House Committee on Ways and Means Oversight Subcommittee during a hearing on resolving IRS taxpayer disputes, the AICPA’s Chastity Wilson said that problems have come up because penalty disputes are handled independently within each of the IRS divisions.
“It has been our experience that there is no consistency across the IRS divisions on the application of penalty relief provisions,” said Wilson, who is the AICPA’s vice chair of the IRS Advocacy and Relations Committee. “There is also concern that the IRS personnel assigned to penalty notices often do not have the necessary training or expertise to review the taxpayer’s submission for penalty relief.”
Wilson recommended that the IRS “undertake a review of the penalty notice processes with other IRS divisions to identify necessary training, systemic problems and duplication of efforts to ensure a consistent settlement process of penalties.”
She also testified that, to maintain impartiality in IRS dispute resolutions, the subcommittee should focus on appeals conferences. Settlement conferences should be limited to the appropriate appeals staffers, the taxpayer, and the taxpayer’s representative. Taxpayers should also be offered the option of in-person conferences.
“The recent changes to the dispute resolution process jeopardize its customer-focused approach and [taxpayers’] perception, and in some situations their assurance, of independence,” Wilson testified.
The upshot? Understanding the taxpayers’ perspective will improve voluntary compliance and increase taxpayers’ confidence in the IRS’s integrity, she said.
About Terry Sheridan
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.