The Taxpayer Advocacy Panel has sent the Internal Revenue Service recommendations for easing taxpayer burdens in five areas.
The panel, which was established in October 2002 as a way of improving IRS responsiveness to taxpayers needs, meet with IRS staff members in April to discuss a number of issues, and promised to provide perspectives from the viewpoint of taxpayers. In a 12-page report dated Aug. 18, the panel made the following suggestions:
- Section 7216 Regulations: The panel said it supports proposed changes to Treasury regulations which allow for criminal sanctions when a person involved in tax preparation "knowingly or recklessly" discloses taxpayer data. However, the panel believes that additional regulations should be put in place, essentially ensuring the preparer provides informed consent, especially in instances where outsourcing is used.
- Return Preparers' Regulations (Licensing): The panel recommended the licensing of all paid tax preparers, saying that the license should be based on both the preparer's level and area of expertise; and that a background check should be required.
- Direction of Volunteer Income Tax Assistance and Tax Counseling for the Elderly: The panel stated that the IRS should expand the Volunteer Return Preparation Program to provide more effective services to a larger group.
- Outsourcing to Private Collection Agencies: Citing concerns about identity theft, loss of jobs to outsourcing and the "performance irregularities and ethics of government contractors," the panel said that the IRS should abandon plans to outsource the collection of some taxpayer debts to private contractors. The program is scheduled to begin in September.
- Availability of "Free-File" for Taxpayers: The panel said that it believes Free File should be available to all taxpayers, though it allowed that if income limits must be set, the cap should be set at adjusted gross income of $100,000.
Further, the panel said that the software companies participating in the Free File Alliance should include a standard list of tax forms and description of their offerings, and that ultimately, the IRS should have a direct filing portal which taxpayers can submit tax returns electronically through at no charge.The full report will soon be available at www.improveirs.org/.
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