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IRS Oversight Board

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The latest news involving the IRS Oversight Board

IRS Compliance Realignment, Budget, and Board Nominations Dominate September Meeting

(Washington, DC) At its quarterly meeting in Washington, DC, the Board reviewed the IRS’ plan to improve program accountability by streamlining core compliance operations. The action should result in a number of important benefits, including consistent policies and procedures, improved Identity Theft Victim Assistance, and greater efficiencies.
“This is a very well-thought out plan that should optimize the effectiveness of IRS compliance activities. The Board was particularly pleased to hear that IRS employees had the opportunity to make comments and suggestions on the plan. We believe that this inclusive process will boost employee engagement while benefitting taxpayers,” said Board Chair Paul Cherecwich, Jr.
The Board also welcomed news that progress continues on the Customer Account Data Engine (CADE) 2 program. It includes the development of a world-class approach for validating the data quality in the transformation of over one billion records for roughly 260 million taxpayer accounts from the antiquated IRS master file system to the new CADE 2 system. This ensures that downstream IRS systems receive high-quality, mission-critical data in a more timely manner. “CADE 2 is already providing tangible benefits to taxpayers and the IRS workforce,” said Mr. Cherecwich. “Taxpayers are receiving refunds and notices faster. CADE 2 is a win for both taxpayers and the IRS,” he concluded.
However, not all news was good. The Oversight Board was warned that the anticipated flat budget for the Internal Revenue Service for Fiscal Year 2015 was expected to be inadequate and would have serious repercussions on customer service and enforcement. Under the assumed budget scenario, IRS staffing would continue to decline.
IRS Commissioner Koskinen has testified that due to staffing cuts and an exception-only hiring freeze, only about 53 percent of taxpayers calling the IRS toll-free lines during the 2015 filing season can expect to reach a live assistor. Long lines and limited service are also anticipated at IRS Taxpayer Assistance Centers.
“The IRS cannot be expected to provide quality customer service or run robust enforcement programs to curb tax fraud in the current budgetary environment,” commented Mr. Cherecwich. “Honest taxpayers will suffer as they will be deprived of the help they need to file a correct return and tax cheats may benefit as audit coverage drops to 1.4 million taxpayers and programs to combat tax refund fraud are starved of resources. To the Board, this represents a retreat from many of the IRS Restructuring and Reform Act of 1998’s (RRA98) goals,” he stated.
Also discussed and of concern is the need to restore the IRS’ expired streamlined critical pay (SCP) authority. The Board has long advocated for an extension of SCP authority to ensure that the IRS can attract and quickly hire individuals with the right skill sets, especially for high-tech positions. However, if Congress does not act on an extension, the IRS may lose a number of highly skilled individuals who will be extremely difficult to replace.
A number of other important issues were discussed at the Board’s meeting. Although the regulation of Return Preparers is in abeyance pending Congress granting the IRS new statutory authority, the IRS continues to promote its voluntary Annual Filing Season Program, which encourages non-credentialed return preparers to stay up-to-date on tax laws and changes. The Board was also briefed on IRS enterprise risk management program activities and communication plans surrounding the Taxpayer Bill of Rights that was rolled out in June 2014.
In addition, the Board was updated on IRS’ progress and risk mitigation activities associated with the continued implementation of tax-related portions of the Affordable Care Act (ACA), such as programming and testing, the publication of new forms and instructions, and agency readiness for handling ACA telephone calls and related tax issues in the upcoming 2015 filing season.
Lastly, the Oversight Board continues to urge policymakers in the Administration and Congress to bring the Board up to full strength and quickly confirm its two current nominees. At present, the Board has only two private-life members, who have served well beyond their terms and continue to serve in holdover status. This is far short of the vision set forth by RRA98 which calls for seven private-life members.
“We are very excited about the nominations of Linda Millsaps and Ronald Pearlman. They are both exceptionally qualified to serve on the Board if confirmed. We ask the Senate to put their confirmations on a fast track,” said Board Chairman Paul Cherecwich, Jr. “The IRS Oversight Board cannot carry out the spirit and letter of the law with so many vacancies,” he concluded.
The Oversight Board’s last meeting of 2014 will be held on December 3rd in Washington, DC.
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