(Washington, DC) The IRS Oversight Board met on December 16, 2010 to review the IRS’ readiness for the upcoming filing season, its fiscal year 2010 performance, and an overview of the agency’s small business outreach efforts. The IRS also briefed the Board on the progress of its Customer Account Data Engine 2 program.
The IRS briefed the Board on its preparations for the upcoming filing season and the possible impacts resulting from late tax legislation, which had not been passed by Congress at the time of the meeting. The IRS briefed the Board on the actions it needed to take to update and test its systems and revise its forms and publications in response to the passage of tax extenders, and the likelihood that some taxpayers may not be able to file their returns at the start of the 2011 filing season. While the IRS reported to the Board it is in “reasonable shape” for the coming tax season, it must make changes to its computer code to process extensions of some tax credits and update a number of its publications and forms.
“The IRS reports that it has been working on contingency plans to manage a somewhat unpredictable filing season,” said IRS Oversight Board Chairman Paul Cherecwich. “With the passage of the tax package the day after our Board meeting, those plans are now being implemented. Historically, late legislation puts a heavy burden on our tax administration system, and has the potential to affect millions of taxpayers who want to file their 2010 tax returns early in the filing season and receive refunds as quickly as possible.”
IRS End-of-Year Performance Reviewed
The IRS also briefed the Board on its end-of-year performance. The number of examinations was up eight percent on taxpayers with income above $1 million. Most other measures, including exams of individuals with incomes below $1 million, small and large corporations, and collections, remained steady from last year. The rate of returns filed electronically rose slightly to 69 percent, while toll-free phone level of service improved to 74 percent, up from 70 percent last year. There was also an 11 percent increase in enforcement revenue, up from $48.9 billion in 2009 to $57.6 billion this year.
Board Briefed on IRS Small Business Outreach
The Board discussed the IRS efforts to reach out to small businesses and help them comply with the tax code. The IRS described a comprehensive array of approaches, focusing on partnerships with industry and small business organizations, tax professional and payroll associations, and state governments to extend and leverage outreach and education efforts. Videos, webinars, and industry-specific online tax centers were among the initiatives described in the briefing.
“The IRS has developed an impressive array of channels to reach small business taxpayers,” commented Board Chairman Cherecwich. “The Board encourages additional efforts to serve the small business community.”
Customer Account Data Engine 2 Progress Reported
Progress was reported on the Customer Account Data Engine 2, which the IRS anticipates will exit the design phase of the program in the coming weeks and begin the implementation phase. The Board was pleased that discussions in Congress regarding a Continuing Resolution to fund government in lieu of a final Appropriations Bill could provide for an increase in CADE 2 funding over the FY2010 level. As explained in a letter from the Board to House and Senate Appropriations Committee, such - funding is needed so the IRS can move forward in building the testing, production and disaster recovery environments.
Board Public Meeting Scheduled for March
The Board is planning a public meeting on March 2, 2011, in Washington, DC. More details will be made available in the coming weeks.