The Electronic Tax Administration Advisory Committee released its annual report to Congress recommending changes in a wide range of electronic tax administration issues.
The report pointed out that the IRS has increased its e-file rates on all major types of tax returns and has reached its 80 percent e-file goal on nearly all of them. In 2015, the IRS closely approached a 90 percent e-file rate for individual returns, far exceeding its 80 percent e-file goal. Two other major business tax return types, partnership and fiduciary returns, now exceed an 80 percent e-file rate for the first time, according to the report.
Based on its findings and discussions, ETAAC made several recommendations in the report, which was released Thursday, on a broad range of issues and concerns, including IRS funding, as well as accelerating a digital-first taxpayer service strategy to improve levels of service.
For 2015, ETAAC is making 15 recommendations to drive four key outcomes. The first of them is an accelerated digital-first taxpayer service strategy that meets the growing taxpayer demand for digital interaction. The strategy should deliver measurable, cost-effective, long-term improvements to taxpayer service and compliance. The report pointed to the increased taxpayer preference for comprehensive, easy-to-use IRS digital service tools that will reduce taxpayer burden, increase compliance and improve taxpayer service.
ETAAC also wants to advance the IRS’s digital-first strategy across the industry, through tax software providers and tax professionals, to decrease IRS and taxpayer burden and increase overall compliance. Another priority is an improved Web site experience that provides relevant, accurate information in a user-friendly format to support a digital-first taxpayer service strategy
ETAAC created a framework for the new report to measure and provide recommendations on how the IRS can address reduced levels of taxpayer service and compliance efforts through digital tools. ETAAC has also created an Electronic Tax Administration Index to measure IRS progress in tackling these challenges through more cost-effective electronic interactions.
“The greatest room for e-file growth continues to be in employment tax returns (Form 94x series) and tax-exempt organization forms,” said the report. “Annually, the Form 94x series e-file rate has consistently seen the slowest growth out of all major return types.”
The IRS has continued to make progress on the recommendations in last year’s ETAAC report. Specifically, the IRS continues to look to improve its e-signature and authentication to fight tax identity theft and recently formed a Security Summit tasked with addressing these challenges, the latest report points out. The IRS has also begun to develop strategies and a tentative five-year roadmap to improve the taxpayer and tax professional experience through one comprehensive online account.
In addition, the IRS has worked with the Department of Health and Human Services to allow taxpayers who received advance payments of the Premium Tax Credit under the Affordable Care Act to view the payment amounts before filing. “Legislative proposals for the IRS to have correctable error authority could enhance the IRS’s ability to proactively identify and correct ACA reporting errors on taxpayer returns,” said ETAAC.
ETAAC also said it recognizes that the IRS faces the serious problem of fraudulent tax returns involving identity theft. In March 2015, IRS Commissioner John Koskinen established a special Security Summit that includes representatives from state tax agencies and private industries, such as software vendors, to work on collaborative solutions to combat fraud schemes. ETAAC plans to work with this group to issue recommendations specific to tax fraud and identity theft.
“We appreciate the hard work these dedicated volunteers bring to electronic tax administration,” Koskinen said in a statement. “The members provide both practical and creative advice to the IRS as we study ways to improve our delivery of electronic services to taxpayers.”
ETAAC is an advisory committee to the entire IRS. ETAAC’s primary purpose is to provide an organized public forum of relevant electronic tax administration issues for Congress to discuss relevant electronic issues.
Advisory Committee on Tax Exempt and Government Entities Report
Separately, another IRS advisory committee, the Advisory Committee on Tax Exempt and Government Entities, recently issued its 14th report of recommendations. The report addresses five issues:
1. Employee Plans: Analysis and Recommendations Regarding 403 (b) Plans
2. Exempt Organizations: The Redesigned Form 990 - Recommendations for Improving its Effectiveness as a Reporting Tool and Source of Data for the Exempt Organization Community
3. Federal, State and Local Governments: FSLG Education and Outreach - Review and Recommendations
4. Indian Tribal Governments: Report on Recommendations for Outreach and Training - A Revision to the Indian Tax Desk Guide
5. Tax Exempt Bonds: Doing More With Less Balancing Resources and Needs.
The 20 members of the ACT presented their report to the IRS in a public meeting in Washington, D.C., on June 17, 2015.
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