Better taxpayer service among GAO priorities for IRS

The IRS should implement more than two dozen past and new recommendations from the U.S. Government Accountability Office (GAO), the GAO said in a letter to the Service released Monday.

The letter, one of several similar assessments issued to federal agencies, is intended to address key recommendations from previous GAO audit reports. As of May 2022, the IRS had 268 GAO recommendations that remained open. Of these, 25 had been designated priority recommendations, meaning that GAO considers them worthy of the Service’s attention to significantly improve its operations by saving money, improving management, and preventing abuse and corruption. fraud.

Since the GAO sent a similar letter to the IRS in June 2021, the IRS has implemented four of the 25 priority recommendations, and one, regarding the reporting of cryptoassets, was closed because a new law requiring reporting by a third of some cryptoasset transactions solved the problem. . To the remaining 20 priority recommendations, the GAO added five more in the letter. The IRS did not agree with all of the recommendations.

The recommendations were divided into six categories: improving taxpayer services (eight recommendations); reduce tax evasion and improper payments (six recommendations); improve cybersecurity (one recommendation); improved reporting (five recommendations); improving audit effectiveness (three recommendations); and improving the staffing and management of IRS personnel (two recommendations). With each recommendation, the GAO described the actions remaining to be taken.

Recommendations for improving taxpayer service were as follows:

Reduce the backlog of 2020 returns: The IRS should revise its estimates to clear its 2020 filing season backlog, the GAO had recommended in a March 2021 report. The IRS disagreed with that recommendation, saying it continued monitor its backlog of paper returns. Most of those returns have been fully processed, the IRS reported in April 2022, except for some withheld “for review due to complex errors.” The GAO has requested additional information on these remaining statements.

Reducing the correspondence backlog: The IRS should estimate timelines for resolving its backlog of taxpayer correspondence and monitor, update and publicly report its progress periodically, the GAO recommended. The IRS agreed.

Upgrade “Where’s my refund?” : The IRS agreed with that recommendation, but said improving the web tool depends on available funding and the results of research this spring into user needs and expectations. National Taxpayers Advocate Erin Collins recently asked the Service to provide more information on the site regarding the status of a pending refund. Shortly thereafter, the IRS expanded the service to allow taxpayers to check the status of refunds for the previous two tax years in addition to that of the most recent return.

Review the Free File agreement: The IRS should ensure that future decisions on whether to renew this arrangement, in which third-party tax software providers provide free federal tax preparation to eligible taxpayers, take into account developments since a March IRS analysis. 2021, including the exodus of two major companies from the program in 2020 and 2021 and the removal of the ban on the IRS operating its own online filing system. The IRS agreed.

Expand more options for free online tax filing: Before the current free files agreement expires in October 2023, the IRS should work with stakeholders to develop alternative ways for taxpayers to file returns at no cost that would reflect current guidelines for digital services. federal. The IRS disagreed with this recommendation in an April 2022 report, saying it lacked sufficient funding and that it “does not believe a free public filing option would significantly improve the experience. taxpayers,” according to the GAO.

Identify the objectives for improving service to taxpayers: In a September 2020 report, the GAO recommended that the IRS identify performance goals for better service and a better taxpayer experience. The IRS agreed, noting that its January 2021 Report on the First Taxpayer’s Law to Congress defined a framework in this direction.

Identify performance measures for improving taxpayer services: The IRS also agreed to further outline how it would measure its progress toward achieving its taxpayer service goals. The Service indicated that it would do so in its SRI Strategic Plan 2022-2026which she said in March 2022 would be completed in the spring of 2022.

Establish timelines and follow-up procedures for processing taxpayer appeal requests: The IRS accepted this 2018 recommendation, saying that its four major administrative divisions have already developed timeliness standards for transferring appeal requests from their review units to the IRS Independent Office of Appeals, and that three of the divisions have procedures fully in place. place of control of deadlines.

Among the remaining 13 recommendations were:

  • Establish a dedicated unit to lead efforts to combat corporate-related identity theft reimbursement fraud;
  • Research, evaluate and develop expanded third-party information reports to include more sole proprietor income and expense information;
  • Submit a revised modernization plan to Congress for feedback;
  • Track the results of major partnership audits and analyze them to better plan and allocate audit resources; and
  • Fully implement an agency-wide workforce planning initiative.

The AICPA continues to advocate for better IRS services; visit the webpage describing AICPA’s advocacy efforts to learn more.

— To comment on this article or suggest an idea for another article, contact Paul Bonner at [email protected].

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