The IRS’s Electronic Tax Administration Advisory Committee released its 2011 Annual Report to Congress during a public meeting Wednesday, with recommendations in areas ranging from security to tax simplification and greater collaboration with e-filers.
The report includes recommendations on the following topics: standards for security and accuracy for the electronic tax community; the IRS’s 1040 Modernized e-file platform; barriers to e-filing employment tax returns, tax filing simplification; and collaboration and partnership with the electronic filing community
The report noted that the IRS has made progress on its goal of 80 percent electronic filing, but said greater security is necessary. The ETAAC estimated a 65.8 percent e-file rate for all major return types in 2011, mainly due to a full-year individual return electronic filing rate of 77 percent.
“Expanded electronic tax administration cannot be achieved without IRS progress in the areas of security, e-authentication and e-signature,” said the report. “Although progress in the e-signature area has been made in the past year via multiple pilots with industry partners, additional focus and prioritization of these areas is vital to advance IRS’ online offerings.”
The report also recommended that the IRS should implement the return preparer review program in a manner that does not unnecessarily, adversely affect having an adequate supply of qualified authorized IRS e-file providers
“IRS should implement a multi-year taxpayer public awareness program to communicate the importance of using qualified preparers,” said the report. “IRS should also organize its industry oversight resources in a manner that leverages commonalties between the oversight of professionals and the tax software industry to increase effectiveness and avoid duplication of effort.”
The 14-member committee provides an organized public forum for discussion of electronic tax administration issues and the overriding goal that paperless filing should be the preferred and most-convenient method of filing tax and information returns.
The report commented on the need for tax simplification, which is currently a subject of debate in Washington.
“ETAAC renews its support for the bipartisan calls for real tax reform and simplification,” said the report. “We must simplify the Tax Code by consolidating the credits and deductions affecting low and middle-income individuals and families. Real tax reform should make these important tax incentives more transparent and understandable, while ensuring a continuing direct engagement between American taxpayers and the tax compliance process that enables the opportunity for improvement of the overall financial health of Americans through increased savings, greater financial literacy, and better personal and family financial management.”
The report noted that the last-minute passage of tax legislation at the end of 2010 had led to taxpayer anxiety and prevented many taxpayers from receiving their refunds as planned.
The IRS said it would consider the recommendations in the report. “ETAAC provides valuable assistance to the IRS in its efforts to improve the taxpayer experience with e-file and the Internet,” said Cecille M. Jones, acting director of electronic tax administration, in a statement. “The IRS will carefully consider all of ETAAC’s recommendations as the agency formulates its strategy for electronic tax administration going forward.”
ETAAC submits an annual progress report to Congress each June. The IRS Electronic Tax Administration created the ETAAC in 1998 as required by the IRS Restructuring and Reform Act of 1998. The report is the result of research and analysis as well as meetings with senior IRS executives.
“ETAAC is committed to helping the IRS provide the next generation of electronic services for taxpayers, tax preparers and others,” said ETAAC Chairman Phil Poirier. “ETAAC looks forward to working with the IRS to advance the key areas discussed in this year’s report.”
Public comments on the report may be sent to email@example.com.
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