The Taxpayer First Act’s Legacy: What Comes Next

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For the last few years, I’ve asked my students whether they’ve heard of the “Tax Cuts and Jobs Act” before. Many raise their hand. Because I’m insufferable, my first order of business is to tell them that there is really no such thing as the “Tax Cuts and Jobs Act” (or TCJA). What they refer to as the TCJA could only pass under budget reconciliation, thus eliminating the superfluous provision of a “short title.” This pedantic foray serves the dual roles of proving my academic bona fides and of alienating my students.

More seriously, when I ask students about their knowledge of the TCJA it is really to make a point for the next question: how many of those students have heard of the “Taxpayer First Act.” I’d note that to date I have yet to meet a student that had heard of the bipartisan, magnanimously (and actually) titled “Taxpayer First Act.

There are a few things I usually emphasize from this little exercise:

(1) that we are going to be learning about federal tax procedure, which is not much covered in the “federal income tax” courses,

(2) that “substantive” tax bills like TCJA tend to be highly partisan whereas procedural or administrative bills like the TFA are not (note that RRA 98 also had bipartisan support), and

(3) that students may be forgiven for not knowing much about the TFA because, frankly, it didn’t really end up making that many big changes that I can think of.

Only perhaps in the future I may have to rethink that final point. In Section 1101 of the TFA Congress required the IRS to provide a “Comprehensive customer service strategy.” That report is here. And for you, loyal reader, I have waded through the pages of MBA-corporate speak to highlight some actual changes that may be coming down the road…

read more…

In this post I will be focusing on the IRS’s “Taxpayer Experience Strategy” as detailed in their report to Congress. The IRS’s approach was to “reimagin[e] the taxpayer experience across six areas of focus.” Those six areas are:

  1. expanded digital services,
  2. seamless experience,
  3. proactive outreach and education,
  4. community of partners,
  5. focused strategies for reaching underserved communities, and
  6. enterprise data management and advanced analytics.

Describing this further, the report provides “[t]his strategy is not a series of discrete approaches, but rather integrated strategies that build on each other to create the best holistic experience for the greatest number of taxpayers.”

To me, this reads like a lot of buzzwords beloved by business schools but largely meaningless to tax practitioners. So I’m going to abridge much of the report and try to provide a list of specifics and highlights that practitioners should be aware of. Here is a list of what I found to be the most interesting goals and projects:

Expanded Tax Professional Accounts

There are a range of different online account functionalities that the IRS appears to be working on as part of the Taxpayer Experience Strategy. Some are fairly simple and greeted with a “how has it taken this long?” sigh. For example, allowing e-signatures on Form 2848, and expanding digital signatures more broadly. Others are vague and call to mind some sort of IRS Frequent Flyer Rewards program. (One goal is “Practitioner Premium Access.”)

Overall, however, the goal appears to be digitizing the power of attorney process from cradle-to-grave. Indeed, one bullet point includes the phrase “Fully Digital CAF.” This, in turn, should allow practitioners to more quickly access client account information.

Issues with processing Form 2848 are a cause of near constant concern in the tax world. Fixing POA problems is, in my opinion, one of the easier ways to increase downstream efficiencies for practitioners, the IRS, and taxpayers alike. Dare to dream of a future world in which no one would think to read or comment on a post about Form 2848 processing issues…

“Omni-Channel” Communication

Basically, the IRS wants to do a better job at the front-end of steering (“channeling”) people based on their personal preferences. For example, if you hate waiting on the phone the IRS seeks to introduce expanded automated callback. If you don’t mind waiting, but just want to have a better sense of how long you’re going to wait, the IRS is proposing better “wait time transparency.”

To some degree, these are things the IRS already does (“we estimate your wait time to be between 15 and 30 minutes”). Perhaps they will just start doing it better (“we estimate your wait time to be 12 minutes and 27 seconds”).

One proposal that did appear new is that the IRS employee is supposed to “remain engaged” with the taxpayer during a call transfer to ensure that the transfer actually goes through. So when you spend 30 minutes waiting and then have an IRS employee inform you “I can’t help, let me transfer you to collections,” the transfer is more likely to actually happen.

Hopefully, however, fewer of those transfers will be necessary to begin with. First, as part of the “concierge navigation support,” the IRS is looking to better ensure that calls go to the right subject-matter expert picking up. Second, and to me vastly more important, the IRS is looking to significantly upgrade the functionality of its “Enterprise Case Management” (ECM) system so that IRS employees have a “360-degree view” of taxpayer accounts. Presumably, in non-MBA speak, this will mean that IRS employees can say with better certainty if/when a letter was sent to a taxpayer when you call.

The Rise of AI… For Answering Tax Questions

There are three new artificial intelligence (AI) features the IRS is looking to showcase: (1) AI powered web-chat, (2) AI powered appointments, and (3) AI tax question assistance for IRS employees. What will this look like?

With regards to the first AI feature, we’ll likely begin seeing the “Can I Help You?” pop-up boxes (“chat-bots”) on IRS webpages that are already ubiquitous as customer-service stand-ins elsewhere. Second, if the chat bots don’t fix the problem, they can help schedule an appointment with an actual human that might be able to. Lastly, when you get an actual human at the IRS, that human being will have an “AI-powered” assistant.

More Translated Forms!

Last but not least, we shift to the lower-tech world of text. The IRS is planning on translating Form 1040 into Chinese, Korean, Russian and Vietnamese (note the IRS has already translated to Spanish, as noted here). But beyond Form 1040, the IRS is also planning on translating Pub 17 and (eventually) notices that are sent to taxpayers.

Steps in the right direction. But will it make a significant difference in the “taxpayer experience?” Are there more fundamental changes that need to happen? What would an improved taxpayer experience really look like? My further thoughts in a future post…

About Caleb Smith

Caleb Smith is Associate Clinical Professor and the Director of the Ronald M. Mankoff Tax Clinic at the University of Minnesota Law School. Caleb has worked at Low-Income Taxpayer Clinics on both coasts and the Midwest, most recently completing a fellowship at Harvard Law School's Federal Tax Clinic. Prior to law school Caleb was the Tax Program Manager at Minnesota's largest Volunteer Income Tax Assistance organization, where he continues to remain engaged as an instructor and volunteer today.

Comments

  1. Robert Kantowitz says

    Of course there is a “Tax Cuts and Jobs Act” (“TCJA”). The law officially named “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” is called by this nickname despite Bernie Sanders’s successful objection to the Senate parliamentarian to the inclusion of a short name . . . the same way that the 18 U.S.C. § 953 is called the Logan Act and the Patient Protection and Affordable Care Act is called ACA or Obamacare and Section 313 of the Congressional Budget Act of 1974 is called the “Byrd Rule.”

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