By Federal Tax Policy Committee
Last month, Jim Smith, CPA-Dallas, TSCPA Chairman Jim Oliver, CPA-San Antonio, and TSCPA Federal Tax Policy Committee Chair Christi Mondrik, JD, CPA-Austin, met with Rostylslav Shiller and Michael Baillif with the IRS Taxpayer Advocate Service (TAS) in Washington, D.C., to discuss issues raised in recent TSCPA Federal Tax Policy Committee letters to the IRS. Focus was primarily on IRS appeals and the “Future State” initiative.
The committee members expressed to Shiller and Baillif that the committee shares National Taxpayer Advocate Nina Olson’s concerns regarding IRS funding, the funding of the Taxpayer Advocate’s Office and the focus of that funding on carrying out the objective of customer service as set forth in the Taxpayer Bill of Rights. There are now 12 states without any permanent settlement or appeals officers. Other taxpayer service resources are depleted, as well, and the IRS’ computer systems still do not communicate cohesively to allow taxpayers to expeditiously resolve problems.
The committee members reiterated the importance of in-person conferences in IRS appeals, as these are often the first opportunities for taxpayers to communicate with an IRS representative. They expressed concerns about delays in case resolution precipitated by the implementation of Appeals Judicial Approach and Culture (AJAC) procedures and advocated for the appeals or settlement officer’s discretion to resolve cases directly where it would be efficient and appropriate to do so.
The committee members expressed concerns about recent changes to Internal Revenue Manual (IRM) 220.127.116.11, which limits taxpayers’ access to in-person conferences. Since the appeals campuses are the first point of contact, even if a taxpayer’s local office would be happy to meet with him or her, the transfer to the local office not only delays case resolution (especially where a face-to-face conference was requested as part of the original protest letter) but also results in unpredictable processing of case transfer requests.
The committee members expressed serious concerns about recently released procedures allowing revenue agents and IRS counsel in appeals conferences, which appears to violate the whole objective of the appeals conference and taxpayer rights by undermining independent review of a taxpayer’s case by the appeals or settlement officer.
The committee members also discussed concerns about IRS implementation of the Future State program and virtual service delivery (VSD), which offers taxpayers a videoconferencing alternative to in-person conferences. There are significant communication concerns for Texas taxpayers, particularly for our state’s citizens with English as a second language and limited English fluency. Moreover, the only VSD in Texas is located in El Paso, which is geographically distant from the rest of the state in a different time zone.
Additional concerns addressed involved the IRS’ contact of taxpayers directly, even when taxpayers are represented by counsel. It seems this is facilitated by the ability through some IRS pilot programs to engage in direct communications with the taxpayer, without copying the representative, if the representative has not yet registered for the system and is unaware of the contact to the taxpayer.
The TAS representatives complimented the committee’s efforts through its letters, shared the National Taxpayer Advocate’s 2016 Annual Report to Congress (released Jan. 10, 2017) and informed them that passport revocation issues have been added to the list of circumstances for which a taxpayer may immediately obtain TAS assistance.
Schiller and his colleagues will attend the IRS Tax Forum in Dallas, Texas, July 25-27, 2017.