The IRS's six areas for improvement
Every year the IRS faces the difficult task of working on enforcement and compliance with a limited staff, observed Stephen Mankowski, the immediate past president and current tax chair of the National Conference of CPA Practitioners. “They have 20,000 employees engaged in dealing with over 60 million tax returns,” he noted.
“To remedy this, the IRS is actively hiring,” said Mankowski, who met recently with government officials to discuss issues faced by the agency. “So far, they have hired over 850 service representatives for collections and will hire upwards of 1,000 seasonal employees,” he said. “Some of the funding for the new hires comes from the private debt collection program.“
The IRS is focusing on six areas of improvements, Mankowski said:
- Strengthening compliance activities;
- Improving operational efficiencies;
- Maintaining a taxpayer focus;
- Ensuring awareness and a collective understanding;
- Leveraging technology; and,
- Developing their workforce.
“Within enforcement, they need to make sure that it’s appropriate, with a balance between service and enforcement,” he said. “The IRS collects 95 percent of all federal taxes; employment taxes comprise more than 70 percent of that figure. Regarding leveraging technology and analytics, some of the technology has been around, while others are being tested in pilot stages.”
The Automated Collection System call centers are adding secure text chats in Brookhaven, N.Y., Jacksonville, Florida, and Detroit, as well as Philadelphia later this year,” Mankowski said. “The taxpayer can opt in to the program and power of attorney can be sent via text chat. In 2019, 122,000 chats were in pilot, compared with 40,000 in 2018.”
“For exams, secure email was added in a pilot program to allow email communications with an IRS representative,” he said. ”In January, 50,000 invitations were sent,but only 5,500 have opted into the pilot. One additional advantage is that the taxpayer is dealing with one representative, rather than multiple representatives. There has been an 85-90 satisfaction rate for this. In Brookhaven, there is a waiting list for employees waiting to go into the pilot.”
“The IRS is working to roll out secure email to the [Small Business/Self-Employed Division] and the [Large Business and International Division] by the end of the year,” Mankowski said. “This will be implemented through a separate email platform.”
Taxpayer First Act
The Taxpayer First Act Office is continuing to hold its listening sessions at various parts of the country, and is briefing the House Ways and Means Committee and the Senate Finance Committee, according to Mankowski.
“The overall feedback is that much is actually working at the IRS,” he said. ”The initial fear was that a complete overhaul would be needed, but this initiative is more about tweaking than a complete overhaul.”
On July 1, the TFAO will issue its first report on the three initial provisions — taxpayer experience, training, and organizational redesign. The TFAO is looking to share their direction with practitioner groups, as well as employees, to ensure their buy-in. Practitioners can reach out to them at email@example.com.
In response to IRS outreach as it prepares reports mandated by the Taxpayer First Act, a number of practitioner groups recommended a dedicated Practitioner Services Division. This is logical, according to Mankowski, since tax professionals prepare nearly 60 percent of all returns. “That percentage increases if you look at post-filing work that needs to be done,” he said.
Among the benefits visualized for the division would be maintaining “robust practitioner hotlines,” according to the recommendations of the group. “We already have a practitioner priority line, but callers frequently get bounced around and have to begin from the start with a new person,” Mankowski noted. “This would be a one-stop shop where people in the division would guide the call. If they have to transfer you, you’re already pre-authenticated. They would already have all your information and you would not have to start from zero. It will make for efficiencies within the IRs and and for practitioners dealing with the IRS, and ultimately for taxpayers.”
Collection Advisory Group
The IRS has created a new unit to deal with specialty collection issues, such as federal tax liens, called the Collection Advisory Group, Mankowski indicated.
“This unit deals in cases where full payment to the IRS is not anticipated. Previously there were 25 to 27 advisory groups around the country that are now centralized into one unit,” he said.
Preparers looking to contact the new central unit can reach out by mail, phone or fax:
IRS Advisory Consolidated Receipts Unit
7940 Kentucky Drive Stop 2850F
Florence, KY 41042
Phone: (859) 594-6090
Fax: (844) 201-8382