NTA Objectives Report Focuses on IRS Future State: Some Thoughts on Technology, Participation and Tax Administration

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There is little question that tax administration has not kept pace with the vast changes in technology that have transformed our society. Last year, the IRS announced plans for a future state of tax administration that would attempt to bring the agency into the 21st century and in its words “take advantage of the latest technology to enhance the entire taxpayer experience.” In response to the IRS’s announcement, the National Taxpayer Advocate, often with the assistance of members of Congress, convened public forums around the country in an attempt to get the pulse of taxpayers and practitioners. In addition, the forums provided an opportunity to bring in researchers who have studied individual preferences when it comes to online interactions, as well as some of the challenges of the digital divide, the inequality in access to technology across communities.

Last week the National Taxpayer Advocate released her mid-year report to Congress. The Report does three main things: 1) it reports on the forums the NTA convened and held across the country which provided an opportunity for public comment on the IRS’s nascent Future State plans for tax administration, 2) it provides an overview of 2016 filing season performance metrics, and 3) identifies 14 priority issues in addition to Future State that the NTA plans to focus on in the upcoming year.

In this brief post I will discuss the report’s consideration of the forums.

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The preface to the report focuses on the public forums and the IRS’s Future State plans. It is organized around eleven concerns that the NTA identifies as present throughout the forums, with the themes backstopped by testimony of the witnesses and attendees. Those concerns are the following:

  • IRS engagement with taxpayers and practitioners and how to increase trust in the tax agency
  • Building a Future State before the IRS current state of taxpayer service is fixed.
  • The taxpayer experience as told by taxpayers.
  • The continuing trend away from person-to-person and face-to-face taxpayer service and compliance activities, including audit, collection, and appeals, as well as a declining geographic IRS presence and increased centralization.
  • The benefits and limitations of online accounts
  • Doing digital right.
  • The lack of clarity around what will be offered as self-service online options, and the legal and due process implications of “self-corrections.”
  • The implications of online accounts for taxpayers with limited online access or digital expertise, and the impact of security concerns on taxpayer online account usage.
  • The implications of granting access to taxpayers’ online accounts to unregulated return preparers.
  • The increasing workload for VITA sites and the compression of the filing season for professional tax preparers.
  • The IRS Mission-what IRS should be focusing on in the 21st century

Each of the concerns has a separate pdf with the witness statements, and the NTA landing page for the report is a useful link if you wish to hone in any of the themes in greater detail. In addition, the report lists the IRS webpage on Future State, as well as transcripts to all the public forums that have been held to date.

In the mid-year report, the NTA discusses how over the next few months it will be surveying taxpayers, holding additional forums, and convening  focus groups with practitioners. As part of the annual year-end report NTA will discuss its vision of IRS Future State “based on taxpayers’ needs and preferences, as they and their representatives have expressed them to us.”

Some Brief Observations

As an observer and participant in this process (I testified at the inaugural forum in DC and discussed that in PT here), I am impressed by the bipartisan nature of the process and the opportunity that the forums provide for general public engagement. There is little that seems to escape partisan rancor, and IRS has been no exception to that over the past few years, as evidenced by for example recent House efforts to impeach Commissioner Koskinen. Yet it seems to me that people of good faith would want the IRS to succeed in what Congress tasks it do. Part of the problem no doubt is that some in Congress wish for IRS to fail in its job, for a variety of reasons, including opposition to programs that IRS administers. Yet that Congressmen Roskam, Serrano, and Meadows, and Senators Casey, Grassley, and Cardin participated in the NTA’s Future State forums suggests to me that there can be a consensus of good will across the aisles that can lead to a genuine effort to get to good tax administration.

I recently read about the Presidential Commission on Election Administration. President Obama convened the commission by executive order in 2013. That Commission was co-chaired by the prior general counsels for the Obama and Romney campaigns, and went about identifying best practices in election administration and recommendations to improve the voting experience. It issued a report in 2014. The Bipartisan Policy Center has picked up the work of the commission and has been working to implement the commission recommendations. There are few issues as potentially polarizing as those surrounding election law, but that there is a bipartisan effort to both identify and implement best practices seems to me a useful model.

The testimony highlighted in the NTA Objectives Report suggests that the IRS has a difficult but important job in front of it as it plans and eventually implements a tax administration model that leverages the interactive technology-based experiences that have come to define the lives of most Americans. The IRS administers many different programs that are housed in the tax code. The diversity in experiences and resources of taxpayers and practitioners alike makes the task of building a new model of tax administration difficult. That the NTA is bringing the voice of many Americans who often do not have a seat at the table when the rules are being written is a valuable public service. Hopefully as IRS rolls out more details and as Congress considers the funding implications of what IRS is seeking IRS and Congress will adopt an evenhanded approach to the issue of tax administration. Building a service model requires a deep understanding of the needs and limitations of all taxpayers, and that understanding is hard to come by without a process that allows those who often do not engage an agency at a time when it is writing the rules.

Leslie Book About Leslie Book

Professor Book is a Professor of Law at the Villanova University Charles Widger School of Law.

Comments

  1. Bob Kamman says:

    “I am impressed by the bipartisan nature of the process”

    Explain how it is bipartisan for IRS management to assume tax administration will remain constant in five years, when one party’s candidate is promoting a change to the system that will allow filing on the back of a post card.

    • I am referring to the process that the NTA has put in place to gather input and to allow members of Congress to engage with their constituents on tax administration.

  2. Bob Kamman says:

    I suppose in comparison to the partisan way IRS handled exempt-organization applications, it is impressive that for once they are doing something right.

    Is it time to tell the Schedule F “office in the home” deduction story again? I remember when Nina Olson bragged about a taxpayer forum in Grassley’s back yard where a farmer complained there was no separate line on Schedule F for claiming the deduction, and her call back to National Office resulted in a promise to include it the following year. Needless to say, the decision was reversed.

    Speaking of smoke and mirrors, those who are anxiously following the proceedings of the International Conference on Taxpayer Rights, last November, will find today that the website reports, “Papers from the 2015 conference will be posted soon.” Will results from the Future State forums be available within five years?

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