Members of Congress need to let the IRS know what they're thinking before making tax laws, according to the first recommendation of the latest IRS Electronic Tax Administration Advisory Committee
The latest ETAAC annual report advises Congress to provide timely tax legislation and consistent multiyear funding while urging the IRS to prioritize IRS.gov modernization and search engine optimization.
"If you want to improve the intricate U.S. tax system, you must first understand who the tax administration stakeholders are and what tools are critical to delivering a successful filing season," the report reads.
ETAAC's first recommendation: Congress must pass timely tax legislation and engage the IRS and appropriate stakeholders beforehand.
The committee also recommended the IRS prioritize funding for the modernization and search engine optimization of IRS.gov. Suggested areas for improvement encompassed content and navigation.
Next among the recommendations was that the IRS prioritize the Online Account toolset expansion.
"The online account is one of the more significant improvements in technology the IRS has made through the pandemic, and can and will become one of the best tools to serve taxpayers," the report reads, adding that the ID.me process "is confusing for those with lower technical literacy … Many taxpayers would benefit from a thorough explanation and walk-through."
ETAAC also suggested the IRS expedite 1099-NEC data to states and prioritize e-filing of 94X returns, a form which has the highest percentage of paper filings and which takes the agency an average of six months to process.
Among other recommendations, the IRS should:
- Update the 1099-K and its educational materials;
- Educate payers on nonresident alien withholding and 1042-S filing obligations;
- Continue to reduce ID theft with transparency between information return stakeholders and the IRS; and,
- Make tax information documents digitally available real-time.
"It's easy for ETAAC, tax professionals and members of Congress to get lost in the tax lingo, debating the best way to close the tax gap, increase voluntary compliance and improve return filing statistics," said the report. "The real question is, 'Why do taxpayers care about filing a return?'"
