(Washington, DC) Last month, the IRS Oversight Board met and discussed the 2012 tax filing season, IRS modernization progress, the latest tax gap figures, and return preparer regulation. The Board also held a public meeting that focused on correspondence audits, taxpayer service challenges, and human capital management in a time of budget restrictions.
At the Board’s February 29th meeting, the IRS updated the Board on the tax filing season, including the successful deployment of the change to daily account processing included in the Customer Account Data Engine 2 (CADE 2) program.
“The Board is pleased to see the IRS begin daily processing of tax accounts this filing season," commented IRS Oversight Board Chairman Paul Cherecwich, Jr. “This change is an important part of the CADE 2 program and is a foundational step to further improvement.”
The IRS also updated the Board on the Modernized e-File (MeF) program, which accepts all Form 1040 returns and the associated schedules and forms for the first time, and is now processing the vast majority of electronic tax returns instead of the legacy e-file system. Despite encountering some issues early in the filing season, the IRS reports that the problems were resolved and the system is running smoothly. The IRS also described to the Board its efforts to step up its refund fraud detection, and the impact these efforts have had on its refund processing.
The Board also discussed the tax year 2006 tax gap figures released earlier this year. Although the gap has increased in absolute dollar terms due to the growth in the overall economy through 2006, the voluntary compliance rate of approximately 83 percent has remained virtually unchanged from the prior estimates. The Board discussed the IRS plans for future updates of the tax gap estimates as well as the need to update several other long-term measures used to track IRS’ strategic progress. The Board and IRS will pursue this topic in future meetings.
The Oversight Board was briefed on progress on return preparer regulation. Mandatory registration requirements for all paid preparers became effective January 2011. The new Return Preparer Office was created to plan, manage and implement a comprehensive return preparer strategy. Competency testing and the new continuing education provider program have begun.
The Board also discussed Virtual Service Delivery, which uses video communications technology that allows IRS customer service representatives to remotely assist taxpayers. The Social Security Administration has used a similar program to deliver service to rural locations, including American Indian Reservations, with great success. IRS performed test pilots using the technology with results that show increased efficiency, reduced taxpayer wait times, and positive customer satisfaction.
The Board also discussed the IRS budget for FY2012, and plans for FY2013 and FY2014. The Board will release a special report containing its recommendations for the IRS FY2013 budget early next month.
The IRS Oversight Board held a public meeting on February 28, 2012 to discuss correspondence audits, taxpayer service challenges, and human capital management in a time of limited resources. Twelve panelists from organizations throughout the United States, including taxpayer representatives, other federal agencies, state government, and IRS partners, shared their views and insights on these topics. Their full statements are available at http://www.treasury.gov/irsob/meetings/Pages/2-28-12.aspx.
The next Board meeting is scheduled for May 16, 2012, in Washington, DC.