www.qns.com I LIC COURIER I AUGUST 2018 43
TAX TIPS
Bipartisan Bill
Would Overhaul IRS
for First Time
Since 1998
BY JOHN SAVIGNANO, CPA
Federal legislators have proposed a major overhaul of the IRS, the rst such reform
since 1998, which is intended to modernize the agency and emphasize the service
aspect of it’s mission. Backed by both Democratic and Republican members of the
House Ways and Means Committee, the legislation is organized into nine divisions,
covering a wide variety of topics ranging from information technology to taxpayer
services to enforcement policies. e bill passed the House by and overwhelming
majority in April, but it has yet to be introduced in the Senate.
One of the major provisions in the proposed overhaul is the creation of a new IRS
Independent Oce of Appeals. is oce would be led by a chief of appeals who
would report directly to the IRS administrator. (e bill would change the title of the
IRS’s leader from “commissioner” to “administrator”, as a way to emphasize that the
primary responsibility of this person is to administer the tax code.)
While the IRS already has an independent appeals process, the bill aims to make it
more widely accessible. It the IRS does not grant a referral to the Independent Oce
of Appeals, then the taxpayer must be provided with a precise and detailed reason
why and be given instructions as to how to protest the decision.
Further those taking part in the appeals process would be provided with access to
non-privileged portions of their case le relevant to the dispute within 10 days of a
conference with the Independent Oce of Appeals. In contrast, however, current law
requires a Freedom of Information Act request in order for this information to be
released.
As a way to save money, the IRS changed its appeals policy in 2016 so that an
in-person appeals conference would be granted only if the appeals team manager
deemed it appropriate. Prior policy required the appeals oce to automatically
transfer cases from the campus to the eld whenever taxpayers requested meetings
face to face. Campus cases-also known as correspondence cases-are generally smaller
cases; they comprise 75 percent to 80 percent of individual taxpayer appeals. Last
year, the IRS changed policy again, providing that taxpayers that eld cases could
once again request a face-to-face meeting, but not those with campus cases.
Another major focus of the bill is identity the and cybersecurity. It would
formally codify the already-existing public-private partnership represented by the IRS
Security Summit; allow for limited sharing of tax return information with state-level
and private-sector partners as part of an information-sharing and analysis center;
establish a single point of contact within the IRS for identity the victims; allow
anyone to get an identity protection personal identication number (IP PIN), which
before was available only to at-risk taxpayers); and prohibit the IRS from providing
taxpayer information to any outside contractor, unless the contractor has adequate
privacy safeguards in place.
e IRS will also be required to develop, by 2023, robust and secure online
accounts for taxpayers and preparers. ese services are intended to supplement, not
replace existing IRS taxpayer services.
Among other things, the proposal would require the IRS to develop a
comprehensive customer service strategy within a year aer enactment, addressing
how it intends to provide taxpayer assistance and establish benchmarks and metrics
to gauge its success.
According to the proposal, the IRS would also be required to develop and
implement an information technology strategic plan that accounts for the service’s
long-term IT needs. is strategic plan would be overseen by the IRS chief
information ocer, a position that this bill formally codies as part of the service’s
structure.
In addition, the bill would curtail the IRS’s ability to seize property, requiring that
the agency show probable cause when seizing funds that appear to have been
structured for money-laundering purposes.
John Savignano is a partner with Savignano Accountants & Advisors
located at 47-46 Vernon Blvd., Second Floor, in Long Island City. If
you have any questions or require additional information, please call
John at 718-707-0955.
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