Friday, July 8, 2016

Mid-Year National Tax Advocate's Report is Wary of IRS' “Future State.”

In her 2016 mid-year report to Congress, National Taxpayer Advocate (NTA) Nina Olson has again expressed concern about IRS's “Future State” plans, which envisions how the agency will operate in five years and beyond. In addition, the NTA presented a review of the 2016 filing season and identified the priority issues that the Taxpayer Advocate Service (TAS) will address during the upcoming fiscal year. IR 2016-97
For the last two years, the IRS has been developing a “Future State” plan that envisions how the agency will operate in five years and beyond.  A central component of the plan is the development of online taxpayer accounts. 

In the National Taxpayer Advocate’s 2015 Annual Report to Congress, Olson praised aspects of the plan but expressed concern that:

  1. The IRS’s intent in developing online accounts is largely to save money in light of recent budget cuts by reducing telephone and face-to-face assistance and 
  2. Many taxpayers will not conduct business with the IRS through online accounts because they lack Internet access or skills, cannot complete the authentication process required to set up an account, do not trust the security of the IRS system, or would prefer to speak with an IRS employee.  As a result, she expressed concern that critical taxpayer needs may go unmet under the Future State plan.
To provide a vehicle for direct public comment, Olson announced plans to hold Public Forums around the country, some in conjunction with Members of Congress who serve on committees actively engaged in IRS oversight.

To date, Olson has held eight Public Forums and has several more planned. Among the panelists at the Public Forums in Washington, DC, were representatives of four Federal advisory committees to the IRS and four major national organizations of tax practitioners.  Olson writes:

  “I continue to be concerned that the IRS’s design for the Future State ignores or dismisses the significant body of data that shows large portions of the taxpaying public is either unable or unwilling to engage with government online services for anything
other than the most routine tasks, if those.” 

The report also points out that only about 30 percent of taxpayers seeking to register for the IRS’s “Get Transcript” application over the last month were able to do so because of enhanced authentication measures, which suggests many taxpayers may not even be able to establish online accounts in the current environment.

Today’s report contains extended excerpts from the transcripts of the Public Forums, organized around key concerns that Olson identified in her earlier report or that panelists consistently raised. 

Information on the Public Forums, including complete transcripts, is available at

Olson announced that TAS will conduct a nationwide survey of a statistically representative sample of U.S. taxpayers about their needs, preferences, and experience with IRS taxpayer service and will hold focus groups on the IRS Future State at the IRS Tax Forums this summer.

Because the IRS Future State plan aims to establish how the IRS will interact with taxpayers in the coming years, TAS views it as its most important area of focus.  TAS’s overriding goal will be to work with the IRS to ensure the plan provides for high quality taxpayer service and the protection of taxpayer rights. 

Based on the results of the National Taxpayer Advocate Public Forums, the nationwide survey, and the Tax Forum focus groups, Olson plans to “set forth our vision of the IRS Future State in the 2016 National Taxpayer Advocate’s Annual Report to Congress.  This plan, I can say with confidence, will be based on taxpayers’ needs and preferences, as they and their representatives have expressed them to us.”

Olson also address the IRS' limited assistance with Tax-Law Questions.  Both on its phone lines and in its TACs, the IRS continued recent restrictions on answering tax-law questions.  During the filing season, the IRS answered only “basic” questions, deeming more complex questions “out of scope.” 

After the filing season, the IRS is not answering any tax-law questions at all, even though many taxpayers obtain legally authorized extensions of time to file.  Last year, nearly 15 million returns were submitted after the filing season.

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