IRS must up TCJA guidance, end verbal ID-theft verification: IRPAC

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This year’s Information Reporting Program Advisory Committee report recommends that the Internal Revenue Service devote resources to conveying proper guidance in the wake of tax reform, and to fight ID theft by ending the requirement that practitioners verbally supply confidential information to the IRS.

“IRPAC recognizes the historical and monumental significance of the [TCJA],” the report reads, and “recommends that the IRS allocate the necessary financial means, personnel and technological tools that it needs to effectively provide guidance to the industry regarding information reporting issues that arose prior to and post enactment of the TCJA.”

The report also warns about practitioners having to verbally provide their TIN or date of birth when speaking with the IRS on behalf of clients. “This confidential information can be overheard, become compromised and used for identity theft purposes,” the report reads.

IRPAC recommended alternatives to this method of input, including: a PIN associated with the CAF number; requesting verbal statement or enabling keypad entry of only the last four digits of the practitioner’s TIN or first four digits of the practitioner’s date of birth; and an online account for the practitioner to communicate with the IRS.

Among the committee’s other recommendations, the IRS needs to issue more guidance on the tax consequences of cryptocurrency, should require positive affirmation of a change of address from corporate filers before updating the IRS Business Master File; and extend e-signature capability to the W-9.

An advisory committee for discussion of information reporting issues, IRPAC comprises a cross-section of individuals from the tax professional community, financial institutions, small and large businesses, universities and colleges and securities and payroll firms.

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Trump tax plan Tax reform Tax-related ID theft Identity verification IRS