In recent testimony that minces few words, the American Institute of CPAs (AICPA) told members of the House Ways and Means Committee’s oversight subcommittee that the IRS is slow, difficult to reach and beholden to an antiquated technology system that inadequately serves taxpayers and tax professionals alike.
The AICPA also seeks the creation of a IRS practitioner services unit to streamline the tax administration system.
“While changes in tax laws always cause some level of confusion for taxpayers, the magnitude of the current tax reform efforts will further emphasize the growing frustration taxpayers have with the IRS’s antiquated technology infrastructure, the lack of guidance on technical issues and taxpayer’s inability to communicate with the IRS in a timely manner,” the AICPA stated.
Here are the 10 key takeaways from the AICPA’s testimony:
- Re-establish the annual joint hearing review to focus on strategic and business plans, taxpayer service and compliance, technology and modernization; and filing season. The Joint Committee on Taxation should provide a bi-annual report on the state of the federal tax system and Congress should appropriate funding for the report.
- The Government Accountability Office should review the IRS Oversight Board, a private-sector board that was suspended because of an inadequate number of members to attain a quorum.
- The IRS should hire and adequately pay experienced professionals from the private sector.
- Congress and the tax administration should determine the appropriate level of service to taxpayers, guided by two goals: the IRS should only contact taxpayers if the agency will be able to timely resolve any issues; and customer satisfaction should be required in every interaction with taxpayers, including enforcement.
- Improve or upgrade the IRS technology systems. “Currently, the IRS has two of the oldest information systems in the federal government making the information technology functions one of the biggest constraints overall for the IRS,” the AICPA stated.
- Establish a dedicated “executive-level” practitioner services unit. The agency currently has employees dispersed among several departments that are not coordinated in ways that give accountants and tax professionals timely access to critical information, such as clients’ account status or availability of dispute resolution opportunities. Employees currently don’t evaluate professionals’ feedback either. IRS inefficiencies also mean that professionals must repeatedly provide the same information to multiple IRS employees. The practitioner services unit should provide comparable service to that available in the private sector.
- Tax professionals should have a designated account as part of the IRS online portal with account access to all of their clients’ information where the professional has power of attorney on file. A centralized log-in would allow for one-time sign-on authentication, allowing access to all client data rather than the current method of authentication prior to accessing each client’s account. The IRS should invest in a digital mechanism for power of attorney and disclosure authorization and create practitioner accounts “contemporaneously” with individual online accounts.
- Replace the Centralized Authorization File with an online method that uses electronic signatures and an approval process based on algorithms.
- Tax professionals should have access to a priority hotline staffed by higher-skilled employees. The IRS should consider hiring experienced people, such as graduate students or retired professionals who want part-time or seasonal work.
- Designate customer service representatives to each geographic area to handle complex issues that tax professionals were unable to resolve through priority hotlines.
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.