The IRS Needs to Drag Itself Into the 21st Century

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I just turned 45 years old. I grew a beard about four years ago because without it, I look about 12. I also pride myself on being up-to-date on the latest ways to do things. 

For instance, when the IRS released e-Services, I was all over it. By using e-Services you could be sitting with a client and immediately file a power of attorney (POA). The POA would be live and you would be able to work on your client’s case right then and there.

Not only could you immediately get access to the account, you could also do Electronic Account Resolution (EAR). Conceivably, you could send a response at 4 a.m. to the IRS regarding a notice that a client received, then get a response and work the case with the same IRS agent until it was resolved. 

Now, this is all busy work, and I do these kinds of tasks early in the morning. I am just a morning person. Further, to answer the IRS, I have to send the agency a certified letter and I can’t do that until I get to the office. Answering IRS notices has become a mess.

What is worse is when I have to actually call the IRS and stay on hold forever before national routing takes me to wherever, and if I get disconnected in the middle of the call, then I must call back, only to get a different person, and the cycle repeats itself.

Electronic filing of POAs and EAR was discontinued by the IRS because it wasn’t being used. I can tell you that most people in this business are not forward-thinking, and they just didn’t know nor understand how these services worked. Instead of learning a new trick, they just didn’t bother using the tools. 

In fact, in 2017, when a fax machine is obsolete, I am still forced to have a fax service because the IRS still uses these archaic machines to receive POAs. Now I must fax a POA and wait five days before I can access the account. E-Services does nothing to help any of these issues – I can pull transcripts, but that is all I can really do.

I deal a lot with the Florida Department of Revenue. It uses a secure email system, whereby if I am working a case, I can email at all hours and send secure attachments, which all helps to cut down on mail.

Which brings me to my opinion that tax professionals are singlehandedly keeping the US Postal Service in business. Every letter we receive has to be answered by snail mail and sent certified return receipt. This costs money and time, and frankly, it is just an old and outdated process.

I called the IRS the other day because I had faxed my POA to the Memphis CAF Unit, but it wasn’t in the system. I had to send the fax to the person helping me just so they would talk to me. While we waited for this fax to go through, and it was slow of course, I mentioned how it would be so much easier to send the POA to a secure email.

I’m tired of doing this job the same way my dad did it. In today’s tech-based world, there’s simply no need for it. It’s the 21st century, and there is NO REASON for me to have a fax service. NONE. ZERO. I want the IRS to figure something out where we can do this all electronically.

How it works with the state of Florida is that one of its agents will send an email with a link to a secure Outlook location. I can then answer the email and send files electronically, never worrying about safety. 

I want an electronic means to resolve a case. And I want to be able to work with a revenue agent or revenue officer during the times that I work. I’m self-employed and work 100-hour weeks. There is never really a day off for me. It would be great to get work done during those times when no one else is working and wait for my responses on Monday. 

In short, if I can do my grocery shopping online (they shop for me and I go to the store, pop my trunk, and just sit there while they bring me my food and other necessities), then I should be able to communicate electronically with the IRS. It is 2017.

About Craig W. Smalley, EA

Craig Smalley

Craig W. Smalley, MST, EA, has been in practice since 1994. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.

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Jul 10th 2017 16:52

It's all about the money. Congress seems intent on killing off their revenue arm by cutting off the life-blood of money. Things may get worse rather than better since the PTIN system is up in the air.

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Jul 10th 2017 17:03

It's not just the IRS. I use a fax machine much more than I should need to, but I deal with financial advisors who won't email for "security reasons", insisting on faxing or snail mailing. I have clients who still fax because they don't have a scanner. I still don't understand why I can't look up estimated tax payments on the IRS eServices (or my state, for that matter), a constant bugaboo with clients who seem to keep no records whatsoever.

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Jul 10th 2017 17:17

As a "newbie" (I'm going to start a bookkeeping/tax practice later this year, early next year - eventually getting my EA), I find this resource interesting and valuable.

In particular, I appreciate your (Mr. Smalley's) articles as they seem to be very straight-forward without a lot of "political correctness".

I guess the only silver lining to all this is that we get to charge our clients a bit more for the extra time it takes. Which means maybe we should our clients to contact their Federal reps and complain? Might not be a bad strategy since it's the client who ultimately pays for the IRS' lack of progressiveness.

As far as any security concerns the Service might have, it would seem to me that if all the HIPAA systems out there regarding medical issues are secure - and have been for some time now - it seems that the IRS shouldn't have any issues...

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By RitaE
Jul 10th 2017 17:42

I won't argue with you that there are those in our profession being slow to embrace technology, but don't fault them entirely. My opinion is that the IRS saying they needed to discontinue e-services for POAs because the service wasn't being used was total hogwash. On the contrary, I think that it was being used so much that the IRS didn't trust that professionals were actually obtaining their clients signatures before filing. I truly think the IRS went to the Fax method so that they could "see the signatures". I'm tired of how the IRS "mistrusts" the preparer community. Another case in point, is the new version of the form 8867 "Paid Preparer's Due Diligence Checklist". Now the IRS wants us to verify that we "asked" what we should be asking. How Draconian is that?

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Jul 10th 2017 21:51

Absolutely, 100% agree. I feel like we are in the stone ages in regards to how the IRS addresses communications and technology. Dealing with the fact that the IRS HEAVILY leans on the post office for communications - I receive upwards of 100-200 pieces of individual mail a week - most of it individual letters for each individual year balance my client has. We could save whole forests just by having the IRS mail balances in one envelope, and better summarization of balances.

And we definitely need back electronic filing of POAs - and account resolution. It is crazy how long we have to wait for POAs to process sometimes. Especially since the number of IRS agents is decreasing every year.

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