New IRS Commissioner Rettig aims to improve technology for taxpayers and CPAs
Charles Rettig delivered his first major speech Tuesday as the Internal Revenue Service’s new commissioner at the AICPA National Tax Conference in Washington, D.C., assuring the CPAs in attendance that he knows their views as a tax practitioner, having practiced tax law for decades.
Rettig was sworn in only seven weeks ago, but he talked about how he hopes to improve the technology at the IRS for interacting with both taxpayers and practitioners and to ready the agency for the Tax Cuts and Jobs Act, which will affect the tax returns the IRS will be receiving next tax season.
“I consider the tax practitioner community to be a family,” said Rettig. “I have long said that I consider the Internal Revenue Service to be part of that family. I spent 36 years in private practice. I put my best friends in my dream job in my home state, loving what I was doing. And there’s only one thing that got me out of that job, and it was getting a call to see if I had any interest in being the next commissioner of the Internal Revenue Service.”
His recent career change has given him a different perspective on his earlier speeches as a tax practitioner. “When I used to come out and speak, I talked in terms of how we’re all in the same business. Whether you’re with the government in the tax world or whether you’re in private practice in the tax world, the business is to get people back into compliance,” he said. “In my last firm we tried to get to them before the government got to them. That was pretty critical. We thought we could make a difference in the outcome of the case, but really the concept would be get them into compliance, keep them in compliance on a go-forward basis, and educate them on what they need to do.”
Rettig wants to improve the image of the IRS and continue to work closely with the AICPA.
“AICPA as a group and each of you as practitioners can do a lot to help us going forward,” said Rettig. “We want your comments, we read your comments, we listen to your comments, and that’s very important in terms of the direction that we’re trying to take the Internal Revenue Service. When I say to people that my son is in the Army, I get a huge degree of respect from people for him. Rightfully so. I’ve told people, at the Internal Revenue Service, we’re proactive. We work for the Internal Revenue Service. I don’t want employees having to say I work for the United States Treasury and my name is John Doe. I, Chuck Rettig, work for the Internal Revenue Service and I’m very proud to do so. I hope that as my term moves on, others inside the Internal Revenue Service will stand up and say the same thing and that each practitioner will actually reach out and shake their hand. They have been under a really difficult process for a long time. It’s easy for those of us on the outside to stereotype the Internal Revenue Service. They’ve had a lot of issues with budget and staffing, etc., etc., but they are people and they are people who care. And part of my goal here is to make sure that the American public knows that the Internal Revenue Service is a huge federal government agency operated by people who care.”
Rettig has been meeting with IRS staff, including in the IRS cafeteria, where he has often posed for selfies with IRS employees during his first weeks on the job. “The other thing that’s defined the first seven weeks is selfies,” he said. “I am now the selfie king.”
Improving Taxpayer Service
Rettig wants to improve taxpayer service at the IRS, making it easier for callers to reach the IRS the same way they can reach Apple when they have a question about their iPhone or iPad. “I’ve explained internally that I want our people to spend an extra two minutes,” he said. “There’s nothing magic about the two minutes. But the taxpayer experience is I can call Apple about my iPhone and I can also talk to them about my iPad.”
His wife came as a refugee from Vietnam in 1980 and later worked for 12 years with the California Franchise Tax Board as a residency tax auditor. Rettig wants to make the IRS more responsive to taxpayers who speak other languages than English.
“We’ve stressed a lot inside the Internal Revenue Service the importance of people for whom maybe English is their second language, or maybe their third language,” he said. “They’re trying to comply and I've been stressing the importance of multi-language forms, publications, etc.”
He wants to improve the tools available for interacting with the IRS, especially with the advent of the Tax Cuts and Jobs Act. “The fact that we don’t have the resources and the tools does not mean that the people who work for the Internal Revenue Service are not well-intentioned and working really hard,” said Rettig. “And that’s going to be the message that you’re going to see me rolling out. We’re very concerned about the underrepresented communities. We’re similarly very concerned about implementation of the tax act, which is happening and will happen and you’ll be very proud. We will gain no respect for implementing the tax act on time and doing a phenomenal job. If you met the people who I’ve been meeting with who are digging in on implementation globally, every one of you would try to hire them. That’s why we don’t bring them out of the office. These are spectacular, spectacular people. They are committed to getting it right, and we’re on target.”
He hopes to modernize the IRS’s technology, which still relies on some computer systems that date back to the 1960s. “Are the tools that we need beyond implementation of the tax act, the ability to call up the Internal Revenue Service and ask the IRS person about your income tax return, your business tax return and some filing question? We don’t have those tools,” Rettig admitted. “The IRS computer system has been patched year after year after year. It goes back to the Kennedy era.”
Rettig is grateful to have the support of the AICPA behind him. “I took this position, and the AICPA wrote a letter supporting my nomination,” he said. “So did other organizations. It was very meaningful to me, more so than just the paper that it was written on because I knew coming in I would have the support of the AICPA and the AICPA knew that they would have a commissioner who was going to give his best efforts to making the Internal Revenue Service the best it can be, respecting the workforce, trying to enhance the taxpayer experience and interaction with the Internal Revenue Service, with an understanding of maybe how it’s been in the past. We can do more, we will do more, but I hope you respect the decisions that we’re making. Give us your criticisms. Give us your constructive criticisms. And if you think we get it right, go ahead and say that. Don’t just come after us when we get something wrong. You praise your children, but you also discipline your children. I’m the one who agreed to serve, but I did so knowing the entire practitioner community would be supportive. We’re taking this journey together to improve the IRS for the benefit of everyone and ultimately our country.”
National Taxpayer Advocate on Last Tax Season
National Taxpayer Advocate Nina Olson also spoke at the conference ahead of Rettig and talked about some of the problems with the IRS last tax season, including some caused by mismatches on the W-2 forms between business names in companies with DBA, or doing business as, information.
“I thought we had text analytics software so that we would recognize this kind of stuff,” she said. “I can tell you that will not be a problem this year, but just to be safe, please put in both lines of the name for the employer so that we don’t have that problem in case things don’t work this year. But it was little things like that. My office was getting hammered with cases.”
The problems had a spillover effect on the National Taxpayer Advocate’s phone lines.
“For the first time ever during the filing season, we had a two-hour wait on the NTA toll-free line,” said Olson. “We actually had what is affectionately known as the ‘courtesy disconnect’ on our line for the first time in the history of the Taxpayer Advocate Service. My cases went up 230 percent in that issue code, from about 16,000 to 66,000 this year. And we are still getting cases. The IRS didn’t get through sorting through its pile of deciding what it wanted to keep and really look at, and what it was willing to put through the rest of the process, until July 21 this summer. Usually it’s done in the end of May or beginning of June at the very latest. So we’re still working through cases trying to get refunds for people from the filing season. And that’s really stressed my employees out because the number of cases that they have per case advocate have gone up by about a hundred, from 250 on average to 350. Think about having 350 significant hardship cases a year. That’s a huge increase to absorb for their work. So if they’re not responsive, that’s why.”
She wants the IRS to fix problems like the W-2 issue ahead of next filing season, when it will be dealing with the many new factors introduced by the new Tax Cuts and Jobs Act while relying on legacy technology dating back decades. “We have been working very closely with the IRS since about March to make sure this doesn’t happen again this filing season, particularly since we don’t know what’s going to happen related to tax reform,” said Olson. “Let’s try to address the known problems before we go into the filing season. And in fact there are some improvements. They have automated this time the process for recycling these returns as W-2’s are posted daily right now. They’re going to be posted daily rather than weekly to the system so that you could be recycled through and have the most current data. If you missed the cycle for posting W-2 data, you had to wait a whole other week before you went back through. This way, the data is going to be posted every single day, so when they cycle you though, you’ll have really current data. That is a very good thing, but my concern is we’re forcing daily posting on a 1960s system that is built on 1960s technology and weekly processing.”