Modernizing the IRS taxpayer service platform is an urgent priority for the Service, Lee Davenport, member, IRS Electronic Tax Administration Advisory Committee (ETAAC) told lawmakers on June 22. Davenport testified before the House Small Business Economic Growth, Tax and Capital Access Subcommittee. Also on June 22, ETAAC released its annual report to Congress (TAXDAY, 2016/06/23, I.1).
“The IRS has been unable to modernize its taxpayer service platform to move away from traditional paper and phone interactions. The current phone and paper taxpayer-service platform is also not the preferred choice of the IRS or the many taxpayers who expect secure online services,” Davenport said. Closely related to this issue is transparency, he added. “In many cases, when there is a compliance issue, small-business taxpayers find out with a surprising IRS notice after they file, or even more stressful an audit that can take months or years to resolve.”
Davenport identified two challenges in modernizing taxpayer services. “First, the current tax system is designed to be reactive, and does not leverage tax information to help taxpayers meet their tax obligations, and second, the IRS cannot quickly develop and implement its digital roadmap, including online accounts, to address the needs and preferences of taxpayers,” he explained.
In its report to Congress, ETAAC noted that the IRS has announced plans to develop a digital taxpayer service strategy in its Future State Initiative (TAXDAY, 2016/05/16, I.4). This digital service model “embraces technology for an improved taxpayer service experience.” ”
Subcommittee Chairman Tim Huelskamp, R-Kan., asked how the IRS could boost compliance among small business taxpayers. There would be greater compliance if there was more transparency, Davenport, replied. Ranking subcommittee member Judy Chu, R-Calif., added that additional compliance measures should not be overly burdensome on small businesses.
Davenport also told lawmakers that the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) (P.L. 114-113) accelerates the filing deadline for Forms W-2 and W-3, and Forms 1099-MISC reporting non-employee compensation. In its report, ETAAC explained that this change means the IRS will receive a significant amount of information earlier in the tax season will receive a significant amount of information earlier in the tax season.
By George L. Yaksick, Jr., Wolters Kluwer News Staff
Prepared Remarks from the IRS ETAAC by Lee Davenport
Statement of Pete Sepp, President, National Taxpayers Union
Statement of Roger Harris, President and COO, Padgett Business Services
Written Testimony of Emily Peterson-Cassin, Bright Lines Project Coordinator, Public Citizen