(Washington, DC) The IRS Oversight Board held its
annual public forum on May 13th in Washington, DC, with this year’s
theme, “Pivoting Away from Paper: How the IRS Can Overhaul Customer Service and
Transform its Business Practices.”
Commissioner John A. Koskinen opened the forum by thanking the members of the
Oversight Board for the excellent work it does to support the IRS in an
advisory capacity. “The role you play in helping the IRS fulfill its mission is
more critical than ever, given the challenges we face,” said Commissioner
Koskinen. He noted that the Oversight Board regularly provides the IRS with
critical support and guidance in the area of electronic filing and tax
Commissioner also discussed the IRS’ current budget situation, saying he shared
the Board’s views expressed in its recently-released budget report, noting that
“underfunding the IRS only punishes taxpayers and endangers the fiscal health
of our nation and critical programs upon which Americans depend.”
first panel consisted of experts from the United States Postal Service, the Social
Security Administration, the Virginia Department of Motor Vehicles and the
Council for Electronic Revenue Communication Advancement, with experience
transforming customer service at the federal, state and local level. The
panelists discussed successful customer service overhauls outside of tax
administration; the strategies employed to realize the transformations; and
lessons learned. They covered a wide range of topics including balancing
customer service across channels and encouraging customers to use “digital
upon this discussion, the second panel, which included representatives from the
state revenue departments of New York and California, the Electronic Tax
Administration Advisory Committee, the National Association of Tax Professionals,
and the National Society of Tax Professionals, explored how the IRS can provide
better service to taxpayers and tax preparers by leveraging technology to
overhaul customer service across channels. Some of the topics covered during
the session included comprehensive online services for taxpayers, providing
data services for tax professionals, major roadblocks to pivoting away from
paper processes, and balancing the funding for providing services today while investing
in the future.
Paul Cherecwich, Jr., who moderated the second panel, observed that “shifting
customer expectations, combined with shrinking resources, factor most
prominently” in the reasons that the private sector and government are shifting
from paper to electronic transactions and communications.
Written statements of all the panelists
are available at http://www.treasury.gov/IRSOB/meetings/Pages/default.aspx
from Board’s Quarterly Meeting
The day after the Public Forum, the
Oversight Board held its quarterly meeting, where it was briefed on a variety
of topics by Commissioner Koskinen and his senior leadership team. Recently
confirmed Deputy Treasury Secretary Sarah Bloom Raskin was also in attendance
on behalf of the Secretary of the Treasury; this was her first Oversight Board meeting.
One of the most important issues
discussed was the IRS budget. The IRS is currently being funded at levels just
below the FY2010 levels and was one of a few government agencies not to see its
funding restored to pre-budget sequestration levels.
Commissioner Koskinen was frank in his
assessment of the implications of continued underfunding of the IRS. He stated
that should the current budget environment prevail, the IRS would only be able
to deliver a limited set of core tax
administration responsibilities, while continuing to experience a decline in customer service and
enforcement. The Commissioner assured the Board that IRS employees would
continue to perform at the highest level but the agency had reached the limit
of its ability to do more and more with less and less.
“One of the Board’s most important
functions is to provide long-strategic guidance to the IRS,” said Board Chair
Cherecwich. “However, providing this long sightline is becoming increasingly
difficult given the continued uncertainty surrounding the IRS’ budget. We need
to be able to say where we want the IRS to be 10 years from now but we are
missing a key element in that planning, namely a steady and reliable funding
stream,” he concluded.
Human capital is another major issue
confronting the IRS. The Board was briefed on IRS attrition rates, including
those for members of the Senior Executive Service. Retirements, reduced budgets
and a hiring freeze since 2010 are cited as reasons for continued employee
attrition. The IRS now has eight percent fewer employees to carry out its
expanded portfolio of duties, including the aforementioned unfunded legislative
mandates. Training has also been slashed during the past few years; since 2010,
training costs have been reduced by 87 percent.
As a result, approximately 90 percent of training is now delivered
is deeply concerned by the state of training at the IRS,” observed Board Chair
Cherecwich. “The IRS cannot build a highly talented, knowledgeable and
proficient workforce without quality training; nor can it achieve its strategic
goals. Inadequate training means that employees will struggle to provide
quality service, which in turn, can result in additional burden on taxpayers
and tax practitioners,” he concluded.
briefed the Board on its digital strategy, which is focused on how to structure
IRS’ online customer service offerings with the dual goals of providing better service
to taxpayers and delivering that service more efficiently. Among the online
services described as being in the very early planning stages are approaches
that would allow a taxpayer to securely log in to their account with the IRS and
check his or her transactions in real time, such as filing status, payments and
was briefed on actions that the IRS is exploring to foster improved competency
with the tax preparation profession. Recent court rulings have determined the
IRS lacks the statutory authority to regulate all paid tax return preparers.
The Board also heard about IRS’ ongoing effort to implement tax provisions contained in the
Affordable Care Act, particularly on preparing for the 2015 filing season. The
IRS will ramp up outreach efforts to communicate to individuals, employers, and
insurers about their tax responsibilities under the Act.
filing season will present other challenges as well, the Board learned.
Approximately 66 tax provisions will expire this year, affecting 111 tax
products. Late legislation in extending these tax provisions could have a
detrimental impact on the 2015 filing season.
to tax-related identity theft, the IRS faces many challenges in its efforts to
reduce Earned Income Tax Credit (EITC) fraud, such as the lack of reliable
third party data. The Board was told that the IRS is revising its EITC
preparer-based treatment processes and pursing other strategies that it expects
will improve EITC compliance.
Board was updated on IRS Enterprise Risk Management, including the
implementation roadmap for the program.
next meeting of the Board is September 16, 2014 in Washington, DC.