The state of e-services today can be compared to where e-filing was about five years ago.“If you look back five years, what we were saying about e-filing would sound a lot like what we’re saying about e-services today,” said Roger Harris, president of Padgett Business Services and former chair of the Internal Revenue Service Advisory Council. “As practitioners and the IRS worked together, a lot of problems were solved. And today e-filing is the normal way of doing business. It will be the same with e-services.”
In fact, Harris noted, many tax practitioners do not understand what e-services are all about: “When practitioners hear ‘e-services,’ a lot of them think you’re talking about e-filing.”
E-services is a suite of Web-based products that allow tax professionals to conduct business with the IRS electronically.
Currently, three “incentive products” are available to practitioners who file at least five accepted e-file returns each year, according to Beth Jones, director of electronic products and services support in the Wage and Investment Division of the IRS. “The incentive products that are available are our disclosure authorization application, where you can electronically submit powers of attorney and also request authorizations for information,” she said. “We have the electronic account resolution application. Much like using the practitioner priority hotline, you can submit tax account issues for resolution and receive a response within three business days. And we also have, of course, the transcript delivery system that’s available for requesting a transcript of account information or wage information.”
“This year, we also opened up e-services to Circular 230 participants,” she noted. “They are able to register for e-services, even if they have not e-filed returns. We were expecting to get quite a bit of registrants out of that initiative, but so far, we only have about 4,200 registrants.”
the future of e-filing
Plans for the future include moving today’s electronic filing of Form 1040 from its legacy environment to the MeF, or Modernized E-File Platform, according to Paul Mamo, director of development services for the Electronic Tax Administration of the IRS.
“MeF is considered our e-filing platform of the future,” he said. “But today it just houses the business returns, which consist of Forms 1065, 1120, 1120S and 990.”
There are four core benefits to moving the individual form to the MeF platform, he explained. “One is that you’ll have year-round access to e-filing. Today, the current e-file program stands down on October 15, so we can get prepared and start to make the changes for the following year.”
Faster acknowledgments, the capability to attach binary attachments to the return, and the capability to submit amended returns and prior-year returns round out the advantages, Mamo said. “All that functionality exists today on the business side. But we hope to bring that over to the individual world. And that’s scheduled for August 2009 for the first phase of the Form 1040.”
The revelations were made at a recent panel of Tax Talk Today, the IRS-sponsored educational forum.
“There are a lot of returns that today you couldn’t e-file because you wanted to have an attachment,” said Harris. “This will give practitioners more capabilities and make more returns capable of e-filing as we approach the 80 percent target.”
There are some problems associated with e-services, Harris noted. “It’s not perfect yet,” he said. “There are some issues, particularly for those people who would not have a need to use e-services on a regular basis. There are some potential issues with regard to re-registering your password. It can be very cumbersome. But in fairness to the IRS, they have reacted in most cases to the practitioner communities — for example, the dropping of the file-return requirement that allowed people under Circular 230 that do representation work to take advantage of it.”
“But there are problems right now with the password in the practitioner community. They see it as a difficulty,” he explained.
“One word of warning: Those of you that want to use it for the first time, don’t use it when you think you have to solve the problem today,” he said. “There’s a time lag between signing up and getting back your confirmation letter. And sometimes, you’ll have to solve that case the old fashioned way, using the phone.”
“It has a lot to do with security issues and protecting taxpayer data,” he explained. “If you keep it active, it’s not a big deal, but if you let it expire, the process of getting it back can take longer than you want. There has to be a balance between security and convenience. When they reach that balance, e-services will be as common as e-filing.”
The IRS intends to enhance the practitioner community’s knowledge of e-services through its e-IRS rooms at this year’s six-city IRS Forums: in Atlanta on July 1-3; Chicago on July 22-24; Orlando, Fla., on August 5-7; Las Vegas on August 19-21; New York on August 26-28; and San Diego on September 9-11.
“It’s a workshop, but for small groups,” said Jones. “It will be a hands-on walkthrough of each of the applications, spending a little more time with individuals.”
In addition to that, Jones added, the IRS will “have assistors from our e-help desk that are available for one-on-one assistance — assistance with registration, password issues, that kind of thing.”
“We’ll see a real benefit to e-services in responding to notices,” said Harris. “It’s far preferable to sending a letter or struggling with the phone.”
“My advice is not to fight it,” he concluded. “The world is changing dramatically, and your customers are going to demand electronic solutions to the way they do business with you. It’s difficult to change, but at the end of the day you’ll be glad that you did.”
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