Improving taxpayer service, enhancing enforcement of the tax law, and modernizing the Internal Revenue Service through its people, processes and technology should be the tax administration's top priorities for 2005, according to the American Institute of CPAs.
The institute detailed its recommendations in a letter this week to IRS Oversight Board chair Raymond T. Wagner Jr., in response to the board's request for input on establishing tax administration priorities for next year. Those three goals were originally set out in the 2005-2009 IRS Strategic Plan.
AICPA Tax Executive Committee chairman Thomas Purcell said that the board should continue its support for improvements in taxpayer service. "Close consultation with stakeholders is a critical element for developing and implementing additional improvements in taxpayer service. Stakeholder groups ... can often identify issues and help resolve problems in an effective and efficient manner," Purcell wrote. "The AICPA supports service initiatives to increase the amount of published guidance, including more revenue rulings and revenue procedures. Moving away from case-specific advice and toward more generally applicable advice would make the tax system more transparent."
"Because many revenue procedures and revenue rulings are significantly outdated, we also recommend that the National Office make reviewing and updating these pronouncements a priority," the letter continued.
The institute also urged the board to continue support for proper funding for IRS Web site development and maintenance, including a more effective search function and broader access to taxpayer account information through the Electronic Services program and the Internet, and to continue supporting efforts to enhance tax law enforcement.
In the area of modernization, the AICPA urged the board to make staffing a priority. "Some of the most frustrating experiences realized by taxpayers and tax practitioners in dealing with the IRS occur because of a lack of training on the part of the IRS employees," Purcell wrote. "It is much easier to work out a solution that is fair to both the tax system and the taxpayer if the individuals resolving the issue are knowledgeable and well-trained. The IRS is experiencing a higher than normal attrition rate among its mid-level and rank-and-file employees, primarily through retirements. These retirements are clearly affecting the service's ability to implement the reorganization and improve employees' productivity. Replacing retirees with qualified staff and compensating for the loss of 'institutional memory' will be a major challenge and, therefore, must be a major priority for the immediate future."
The AICPA applauded the IRS's emphasis on electronic tax administration, but urged the board to focus on the electronic filing options of low-income taxpayers -- particularly those who don't own computers, since they often have to rely "on commercial preparers who often charge disproportionately large fees and use the appeal of immediate cash to make high-interest refund anticipation loans to taxpayers who can least afford such obligations."
Calling the Business Systems Modernization goals "critical to the future success of the service," Purcell wrote, "Despite problems the IRS has experienced with BSM in recent years, we strongly urge the Oversight Board to continue its support for appropriate funding for modernization. This issue must remain a central feature of the service's strategic plan for the next five years."
Lastly, the institute urged the board to continue to make tax simplification a top legislative priority.
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