March 22, 2018
On March 22, the National Association of Enrolled Agents (NAEA) proposed recommendations to the House Ways and Means and Senate Finance Committees on reforming the Internal Revenue Service. These recommendations represent an accumulation of NAEA’s formal submissions to Congress, testimony before congressional committees, collaborative work with other practitioner groups, and concepts developed in consultation with NAEA’s Government Relations Committee and membership at large. It is NAEA’s intention that this report act as a resource for the tax writers and their staffs to help develop important reform legislation over the coming months.
A summary of our report is as follows:
- Congress should reassess and build on the recommendations for IRS governance and management in the Report of the National Commission on Restructuring the IRS by streamlining its membership and selection process; increasing its ability to keep the IRS on track for its strategic planning; ensuring that the IRS is free of any political, religious or racial bias; helping it better coordinate with Treasury IG for Tax Administration; and properly compensating top management.
- Workforce reform should focus on the agency’s culture and leadership. To that end, IRS needs to have a dialog centered on its values and its approach to providing top-quality service to the public. The agency cannot provide excellent customer service if it cannot train and develop its staff and secure the right leadership.
- To ensure an adequate level of funding, and to hold the Service responsible for its performance, a reform effort should reestablish an annual joint congressional hearing. A joint hearing would provide congressional guidance on acceptable levels of service and enforcement and inform the appropriations process.
- IRS needs to provide effective, efficient, taxpayer-centered compliance activities in its examination, collection, and appeals functions. For instance, IRS should explore further alternative dispute resolution options; ensure compliance staff do not bypass an active power of attorney; increase the authority of and set higher standards for appeals staff; and incorporate a number of taxpayer rights changes included in the National Taxpayer Advocate’s 2017 Purple Book.
The tax professional community should be a critical part of any plan that hopes to create a well-run, efficient IRS. In 2017, taxpayers filed 132 million returns electronically; 79 million of those originated with roughly 700,000 paid preparers. In order to leverage the tax professional community, Congress should:
- provide guidance on private sector electronic signature options for Forms 2848 and 8821 used by Circular 230 practitioners. IRS should debut tax practitioner online accounts that include a robust and secure means of communicating with IRS.
create a dedicated, executive-level practitioner services unit that would centralize and modernize its approach to all practitioners. - provide IRS authority to establish minimum standards for unenrolled tax preparers, empower the Office of Professional Responsibility to issue cease-and-desist letters to any person or corporation improperly using the agency’s credential, and clarify who may verify any element of a return for purposes of qualifying for any federal program or benefit.
In summary, IRS should develop a strategic mission shared by its many stakeholders—employees, congressional overseers, and tax professionals alike. To help sustain this shared mission, Congress must consider governance, management, personnel, and budget. Only in this comprehensive approach do we believe the agency can be successful in its mission, which is to provide top quality service.
Please contact NAEA Executive Vice President Robert Kerr (rkerr@naea.org) with any questions or comments. NAEA thanks the members of the House Ways and Means and Senate Finance Committees for their work on these issues of great importance to all taxpayers.
The comment letter can be found here.