Mission

Hi, I'm BJ. For more than 40 years, my mission has been to provide provide high quality, low-cost solutions to help all clients achieve success --- regardless of their endeavor. Now that I am a semi-retired virtual administrative assistant, I hope to continue to share some of my knowledge through this blog. I'm working on several projects, so please be patient while I dust off some old posts, before I write in earnest.

Latest Posts

Wednesday, January 10, 2018

2018 Tax Filing Season Begins Jan. 29, BGGE Bookkeeping Service Began Jan. 2

The Internal Revenue Service announced in their January 04, 2018  IR-2018-01 news release that the nation’s tax season will begin Monday, Jan. 29, 2018 and reminded taxpayers claiming certain tax credits that refunds won’t be available before late February. Below are excerpts of that release:

The IRS will begin accepting tax returns on Jan. 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers will have two additional days to file beyond April 15.

Many software companies and tax professionals will be accepting tax returns before Jan. 29 and then will submit the returns when IRS systems open. Although the IRS will begin accepting both electronic and paper tax returns Jan. 29, paper returns will begin processing later in mid-February as system updates continue. The IRS strongly encourages people to file their tax returns electronically for faster refunds.

The IRS set the Jan. 29 opening date to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns.

April 17 Filing Deadline

The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday – April 16. However, Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 17, 2018. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

The IRS also has been working with the tax industry and state revenue departments as part of the Security Summit initiative to continue strengthening processing systems to protect taxpayers from identity theft and refund fraud. The IRS and Summit partners continued to improve these safeguards to further protect taxpayers filing in 2018.

Refunds in 2018
Choosing e-file and direct deposit for refunds remain the fastest and safest way to file an accurate income tax return and receive a refund. The IRS expects more than four out of five tax returns will be prepared electronically using tax software.

The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days, but there are some important factors to keep in mind for taxpayers.

By law, the IRS cannot issue refunds on tax returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit before mid-February. This applies to the entire refund — even the portion not associated with the EITC and ACTC.

IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018, if those taxpayers chose direct deposit and there are no other issues with the tax return. This additional period is due to several factors, including banking and financial systems needing time to process deposits.

After refunds leave the IRS, it takes additional time for them to be processed and for financial institutions to accept and deposit the refunds to bank accounts and products. The IRS reminds taxpayers many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving Presidents’ Day may affect their refund timing.

The Where's My Refund? ‎tool on IRS.gov and the IRS2Go phone app will be updated with projected deposit dates for early EITC and ACTC refund filers in late February, so those filers  will not see a refund date on Where's My Refund? ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so Where’s My Refund? remains the best way to check the status of a refund.

BGGE Tax Season began January 2, 2018.  BGGE Bookkeeping clients should receive my annual newsletter in their inbox in a few days.  This year a tax preparation checklist will be included and posted on this site.

Friday, January 5, 2018

BGGE Has Moved



After 15 years, BGGE has moved from Citymax to Blogger. As advertised, Citymax's  website building software includes reliable hosting, secure shopping cart, easy inventory management, and professional email accounts.  Their customer support was excellent. But last year I realized that I did not need all the features they offered.  By switching over to Blogger, which is free, I could save more than $300 a year.

Another reason I decided to move, I wanted to reduce the number of websites I managed.  I maintained  four of my own websites plus three client sites.  Finally, looking ahead, I want my blog to be my legacy.  My aim is to publish quality content that will be relevant to small business owners, students, job-seekers, and "you" after I'm gone.

Although  I had considered this move for over a year, actually switching over is scary.  This is a  major revamp. Each page must be transferred manually.  I apologize for missing pages or broken links during this overhaul. Thank you in advance for your patience.

Saturday, July 8, 2017

National Taxpayer Advocate 2017 Mid Year Report to Congress

According to the IRS News Release (IR-2017-113) June 28, 2017 — National Taxpayer Advocate Nina E. Olson released her statutorily mandated mid-year report to Congress that presents a review of the 2017 Filing Season, identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the upcoming fiscal year, and contains the IRS’s responses to each of the 93 administrative recommendations the Advocate made in her 2016 Annual Report to Congress.
In her preface to the report, Ms. Olson praises the IRS for running a generally successful filing season, including reducing the incidence of identity theft, implementing new accelerated Form W‑2 reporting requirements, and matching Forms W‑2 against tax returns claiming refunds. But Ms. Olson says taxpayers who require assistance from the IRS are continuing to face significant challenges obtaining it. She attributes part of the problem to resource constraints, saying that IRS funding has been reduced by nearly 20 percent since fiscal year (FY) 2010, after adjusting for inflation.
While taxpayer services and enforcement activities are both essential for effective tax administration, Ms. Olson says taxpayer services require more emphasis than they are currently receiving. She points out that more than 60 percent of the IRS budget is allocated to enforcement activities while only about 4 percent is allocated for taxpayer outreach and education. The report elaborates on taxpayer service limitations, particularly involving outreach and education:
As of September 30, 2016, the IRS dedicated only 98 employees to conducting education and outreach to the 62 million small business and self-employed taxpayers, and only 365 employees to conducting education and outreach to the nearly 125 million individual taxpayers. There are 14 states that have no Stakeholder Liaison employees who conduct outreach to small business and self-employed taxpayers. The number of Taxpayer Assistance Centers [TACs] is declining each year, and because of the IRS’s new appointment-only system, taxpayers who show up without an appointment are routinely turned away. The TACs have completely stopped offering free tax preparation for low income, elderly, and disabled taxpayers and . . . [they] will not answer “out-of-scope” tax law questions during the filing season and will not answer any tax law questions outside the filing season.
Ms. Olson recommends that the IRS expand its outreach and education activities and improve its telephone service and that Congress provide the IRS with sufficient funding to do so.
Overview of the Filing Season
The report says the IRS delivered a generally successful filing season in 2017. The IRS processed nearly 130 million returns, about 90 percent of which were filed electronically. Seventy-five percent of the returns resulted in refunds, and the average refund amount was $2,763. The IRS successfully implemented several provisions of the Protecting Americans from Tax Hikes Act of 2015, which directed the IRS to delay paying refunds until February 15 to taxpayers claiming either the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit and required the IRS to deactivate Individual Taxpayer Identification Numbers (ITINs) based on age of issuance and non-use.
During Filing Season (FS) 2017, the IRS answered 79 percent of the telephone calls it received on its “Account Management” (AM) telephone lines that were routed to telephone assistors. That is up from 72 percent during FS 2016. In addition, the time these taxpayers spent on hold declined from 11.1 minutes in FS 2016 to 6.5 minutes in FS 2017. Thus, taxpayers generally were better served on the AM telephone lines.
However, taxpayer service was less successful in other areas. The IRS compliance telephone lines, which are not included in the AM category, showed significant declines. Of note, the IRS received about 2.7 million calls on its “Installment Agreement/Balance Due” line. “For the most part, these calls come from taxpayers who are seeking to make payment arrangements – the sort of calls most private businesses would pick up immediately,” the report says. Yet the IRS answered only 40 percent of these calls during FS 2017 (down from 76 percent in FS 2016), and wait times increased from 11 minutes in FS 2016 to a staggering 47 minutes in FS 2017.
Moreover, despite answering a higher percentage of calls on its AM telephone lines, IRS telephone assistors actually answered 25 percent fewer calls during FS 2017 as compared with FS 2016. That occurred because taxpayer calls routed to AM telephone assistors declined by even more – 32 percent. Had IRS telephone assistors received the same number of calls during FS 2017 as they received during FS 2016, they would have answered only 54 percent of taxpayer calls (rather than 79 percent). Therefore, while the uptick in the percentage of AM calls answered was welcome news this year, the report cautions that the IRS has not necessarily turned the corner in strengthening its telephone service. The report also notes that the FY 2018 budget proposal for the IRS projects the agency will answer only 39 percent of taxpayer calls routed to telephone assistors next year.
During FS 2017, the IRS implemented a policy that, for the first time, requires taxpayers to schedule appointments in advance of visiting any of the IRS’s 376 Taxpayer Assistance Centers to receive face-to-face service. The TACs, which previously were known as “walk-in” sites, have now been transformed into “appointment-only” sites. In response to complaints from TAS and others, the IRS has given TAC managers the discretion to make exceptions to the policy, but the general rule continues to require advance appointments.
This year, the IRS has continued a policy originally adopted in 2014 that sharply limits the authority of IRS employees to answer tax law questions. IRS employees are restricted to answering “basic” questions during the filing season and are restricted from answering any tax law questions outside the filing season. The report says that answering taxpayer questions about how to comply with the law should be viewed as a core function of tax administration.
Priority Issues for FY 2018
The report identifies and discusses 13 priority issues the Office of the Taxpayer Advocate plans to focus on during the upcoming fiscal year. Among them are the following:
  • Private Debt Collection Implementation. This spring, the IRS began assigning delinquent taxpayer accounts to private collection agencies (PCAs). TAS reviewed the accounts of taxpayers whose debts had been assigned to PCAs through May 17 and who had filed tax returns for 2014 or later. It found that 23 percent reported incomes below the federal poverty level, and 53 percent reported incomes below 250 percent of the federal poverty level, which is the threshold of “low income” Congress adopted for purposes of obtaining assistance from a Low Income Taxpayer Clinic. Among the elderly, the median income shown on recent returns filed by taxpayers who received Social Security retirement benefits in 2016 was less than $13,200.

    The Advocate remains concerned that PCAs will pressure taxpayers who cannot afford to pay into doing so. When the IRS itself is collecting unpaid taxes, it is authorized to perform a financial analysis of a taxpayer’s ability to pay, and it does not collect from taxpayers where its financial analysis shows doing so would impose a financial hardship. oeHoHowever, PCAs are not authorized to perform a financial analysis, and the IRS has not authorized them to collect financial information from taxpayers that could be turned over to the IRS for analysis. Because PCAs are paid a percentage of what they collect, there is a financial incentive for them to pressure even low income taxpayers from whom the IRS ordinarily would not collect to make payments.

    The statute governing the program requires the IRS to assign cases to PCAs that the IRS itself is not working and that are contained in “potentially collectible inventory.” However, the statute does not define the term “potentially collectible inventory.” To protect low income senior citizens, the Advocate has previously recommended the IRS adopt a definition that would exclude recipients of Social Security retirement benefits with incomes below 250 percent of the federal poverty level.

    The report says the IRS allowed TAS personnel to listen to a sample of PCA telephone calls during the 2006-2009 iteration of the program and initially agreed to do so this spring. However, the IRS recently informed TAS it has changed its position and will not allow TAS personnel to listen to calls. The report says that if TAS is prohibited from listening to a random sample of calls between the PCAs and taxpayers, it will not be able to determine whether the PCAs are complying with taxpayer rights to the extent required by law. Moreover, the IRS has declined to require all PCA employees working taxpayer cases to watch a training video taped by the National Taxpayer Advocate on protecting taxpayer rights.

    During FY 2018, TAS will take additional steps to ensure the protection of taxpayer rights under the program and will advocate to exclude Social Security recipients with incomes below 250 percent of the federal poverty level from assignment to PCAs.
     
  • U.S. Passport Revocations and Denials. Legislation passed by Congress in 2015 requires the Department of State (DOS) to deny an individual’s passport application and allows the DOS to revoke or limit an individual’s existing passport if the IRS certifies the individual has a “seriously delinquent” tax debt. The law provides an exception allowing the DOS to issue a passport to a certified individual in emergency circumstances or for humanitarian reasons. TAS is actively monitoring the implementation of this requirement because of the risk of extreme harm if the IRS or DOS makes a transcription error or a taxpayer is not given adequate notice of a passport denial or revocation, which could happen while the taxpayer is outside the United States.

    TAS is concerned that the IRS does not plan to notify taxpayers of its intent to certify their tax debts as “seriously delinquent” until the certification is taking place. The U.S. Supreme Court has held that the right to travel, including international travel, “is a part of the ‘liberty’ of which the citizen cannot be deprived without due process of law under the Fifth Amendment.” (Kent v. Dulles, 357 U.S. 116, 125-126 (1958).) The report says that revoking a taxpayer’s passport without providing an additional stand-alone notice of intent to do so raises legitimate questions about whether the government has complied with the U.S. Constitution’s due process requirements. Apart from the questionable legality of failing to provide advance notice, the report points out that advance notice of a certification that will lead to denial or revocation of a passport is likely to cause many taxpayers to resolve their debts, thereby sparing both the taxpayer and the government from the bureaucratic hassle of revoking and then reinstating a passport.

    During FY 2018, TAS will take steps to address these concerns systemically, and will help affected taxpayers resolve their seriously delinquent tax debts and obtain reversals of certifications in a timely manner, where appropriate.
     
  • Transparency in the Offshore Voluntary Disclosure Programs. TAS continues to have concerns about the transparency of the IRS’s Offshore Voluntary Disclosure Programs (OVDPs). These programs are largely governed by a series of Frequently Asked Questions (FAQs) posted on the IRS website. However, the IRS generally does not disclose the legal guidance underlying the FAQs, leaving taxpayers and their representatives with insufficient information about how to interpret ambiguous answers. In analyzing the programs, TAS reviewed a sample of ten items of undisclosed advice about FAQs issued between March 1, 2016 and March 8, 2017. According to the IRS, the undisclosed documents had not been checked or reviewed by any disclosure experts to determine whether they should be disclosed, yet they contained substantial information that would be helpful for taxpayers and their representatives.

    The IRS is also objecting to the release of aggregate data that would give Congress, taxpayers, and their representatives a better feel for the how the programs are operating and a range of results they may expect. In the past, both TAS and the Government Accountability Office (GAO) have computed and publicly reported aggregate data, such as the average or median tax, interest, and penalties paid by taxpayers inside and outside the OVDP. The IRS is now objecting to the release of such data, asserting that TAS should not publish any data points more detailed “than those provided by the Commissioner in press releases.”

    “I find the IRS’s objection to our publication of aggregate data on OVDP outcomes deeply disturbing,” Ms. Olson said in releasing the report. “Conceptually, if the IRS is able to limit the release of data to what it includes in press releases, there would be no meaningful Taxpayer Advocate reports, no GAO reports, and no TIGTA reports, and the Freedom of Information Act would become a dead letter. Practically, the IRS has not argued any harm has arisen from the prior release of the same data points to which it is currently objecting. Practitioners have expressed considerable frustration with the OVDPs, where auditors make case-by-case decisions based on nonbinding FAQs that the IRS may withdraw or change at any time, and have complained that outcomes often seem arbitrary and unpredictable. The public deserves access to aggregate data on average outcomes, and we don’t believe any exemption under FOIA entitles the IRS to withhold it.”

    During FY 2018, TAS will continue to advocate for the IRS to disclose all OVDP-related rules and procedures along with any legal interpretations of them and advocate for the IRS to disclose detailed summary statistics for the ODVP and streamlined programs so taxpayers have a better sense of likely outcomes.
     
  • Other Priority Issues. Other priority issues the Taxpayer Advocate Service plans to focus on during FY 2018 include the IRS’s approach to international tax administration; the advantages and disadvantages of the IRS’s heavy emphasis on online taxpayer accounts; options to improve the administration of the EITC; tax compliance barriers for ITIN holders; the inadequacy of the IRS’s Allowable Living Expense standards; the IRS’s policies regarding levies on retirement accounts; the IRS’s continuing efforts to combat tax-related identity theft; taxpayer challenges in complying with the Affordable Care Act; lack of specificity in third-party contact notices; and the IRS’s continuing information technology challenges, particularly in developing an enterprise-wide case management system.
Volume 2: IRS Responses to Taxpayer Advocate Recommendations
The National Taxpayer Advocate is required by statute to submit a year-end report to Congress that, among other things, describes at least 20 of the most serious problems facing taxpayers and makes administrative recommendations to mitigate those problems. The report released today includes a second volume containing the IRS’s general responses to each of the problems the Advocate identified in her 2016 year-end report as well as specific responses to each recommendation. In addition, it contains TAS’s analysis of the IRS’s responses and, in some cases, details TAS’s disagreement with the IRS’s position.
Overall, the Advocate made 93 administrative recommendations in her 2016 year-end report, and the IRS has implemented or agreed to implement 35 of the recommendations, or 38 percent. The agreed implementation rate is lower than last year’s. Out of 116 administrative recommendations proposed in the Advocate’s 2015 year-end report, the IRS implemented or agreed to implement 65 of the recommendations, or 56 percent.
“Both people who work in the field of tax administration and taxpayers generally can benefit greatly from reading the agency responses to our report,” Ms. Olson said. “Tax administration is a complex field with many trade-offs required. Reading both my office’s critique and IRS’s responses in combination will provide readers with a broader perspective on key issues, the IRS’s rationale for its policies and procedures, and alternative options TAS recommends.”

* * * * * * *

The National Taxpayer Advocate is required by statute to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The statute requires these reports to be submitted directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year. The second report must discuss at least 20 of the most serious problems encountered by taxpayers, identify the ten tax issues most frequently litigated in the courts, and make administrative and legislative recommendations to resolve taxpayer problems.
ABOUT THE TAXPAYER ADVOCATE SERVICE
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can help protect your taxpayer rights. We can offer you help if your tax problem is causing a hardship or if you've tried but haven't been able to resolve your problem with the IRS. If you qualify for our assistance, which is always free, we will do everything possible to help you. Visit TaxpayerAdvocate.irs.gov or call 1-877-777-4778. For more information, go to TaxpayerAdvocate.irs.gov or irs.gov/advocate. You can get updates on tax topics at facebook.com/YourVoiceAtIRSTwitter.com/YourVoiceatIRS, and YouTube.com/TASNTA.

Saturday, April 15, 2017

IRS Releases FY 2016 Data Book

According to the IRS News Release (IR-2017-69) March 30, 2017, the Internal Revenue Service released the 2016 IRS Data Book, a snapshot of agency activities for the fiscal year.
The 2016 IRS Data Book describes activities conducted by the IRS from Oct. 1, 2015, to Sept. 30, 2016, and includes information about returns filed, taxes collected, enforcement, taxpayer assistance, the IRS budget and workforce as well as other data. This edition contains charts that show trends such as increases in telephone service and declines in enforcement activities when compared to 2015.
IRS Increased Toll-free Telephone and Online Assistance to Taxpayers

During Fiscal Year 2016, the IRS helped more than 68 million taxpayers over the telephone through live assistance and automated services. Taxpayers used the IRS web site in greater numbers; there were more than one-half billion unique visits to IRS.gov during FY 2016. The most popular feature on IRS.gov, Where’s My Refund, was used almost 300 million times during FY 2016, up more than 27 percent compared to the prior year.

FY 2015FY 2016Percent Change
Total number of IRS.gov visits
493,247,292
506,090,501
2.60%
Where's My Refund
234,739,847
299,593,852
27.63%
IRS2Go active users
3,903,463
5,048,563
29.34%
Telephone assistance and Walk in Assistance
61,340,034
68,311,901
11.37%
Total telephone assistance
55,696,262
63,831,163
14.61%
Automated telephone assistance
37,459,477
38,286,569
2.22%
Live telephone assistance
18,236,785
25,544,594
40.07%

Enforcement Actions Decline in 2016
During Fiscal Year 2016, the IRS collected more than $3.3 trillion, processed more than 244 million tax returns and other forms, and issued more than $426 billion in tax refunds. There were fewer enforcement actions taken during FY 2016. The IRS audited just over 1 million tax returns of individuals in FY 2016, down almost 16 percent from the prior year’s total of 1.2 million. The coverage of individuals audited fell to 0.70 percent, the lowest coverage rate in more than a decade.
Several collection activities fell in FY 2016. IRS levies were down 40 percent compared to the prior year, and the agency filed almost 9 percent fewer liens than in the prior year.
The IRS Data Book’s online format makes navigating data on taxpayer assistance, enforcement and IRS operations easier. The publication contains depictions of key areas and quick links to the underlying data. This year’s edition marks 100 years since the Revenue Act of 1916 became law.

An electronic version of the 2016 IRS Data Book can be found on the Tax Stats page of IRS.gov. Printed copies of the 2016 IRS Data Book, Publication 55B, will be available May 2017 from the U.S. Government Printing Office. To obtain a copy, write to the Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954, or call (202) 512-1800 for voicemail, or fax a request to (202) 512-2250.

01/07/2018 Update:  This article was originally posted on BGGE Blog | Site News | Free Stuff Alerts | New Arrivals | & More

Sunday, January 8, 2017

2017 Tax Season Begins Jan 23rd - Prepare for Some Significant Changes

The nation’s tax season officially begins on Monday, January 23, 2017.   That is when the IRS will begin accepting electronic tax returns and processing paper tax returns.  While many software companies and tax professionals will be accepting tax returns before Jan. 23, they cannot actually submit your return until the IRS systems open.

According to the December 9, 2016 newsletter, the IRS expects more than 153 million individual tax returns to be filed in 2017.  Four out of five tax returns will be prepared electronically using tax return preparation software.

Certain taxpayers may need to prepare for some significant changes for this tax season, as highlighted below:

Refunds in 2017

Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund.

The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days, but there are some important factors to keep in mind for taxpayers.

Beginning in 2017, a new law requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit until mid-February. Under the change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund — even the portion not associated with the EITC and ACTC — until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent fraud.

As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should also submit returns as they normally do — including returns claiming EITC and ACTC.

The IRS will begin releasing EITC and ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or on debit cards until the week of Feb. 27 (assuming there are no processing issues with the tax return and the taxpayer chose direct deposit). This additional period is due to several factors, including banking and financial systems needing time to process deposits.

After refunds leave the IRS, it takes additional time for them to be processed and for financial institutions to accept and deposit the refunds to bank accounts and products. The IRS reminds taxpayers many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day may affect their refund timing.

April 18 Filing Deadline 

The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017, rather than the traditional April 15 date. In 2017, April 15 falls on a Saturday, and this would usually move the filing deadline to the following Monday — April 17. However, Emancipation Day — a legal holiday in the District of Columbia — will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 18, 2017. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

01/09/2018 Update:  This article was originally posted on BGGE Blog | Site News | Free Stuff Alerts | New Arrivals | & More.

Thursday, July 7, 2016

National Taxpayer Advocate Reviews 2016 Filing Season

On July 7, 2016, National Taxpayer Advocate Nina E. Olson released her statutorily mandated mid-year report to Congress that contains extended excerpts from her ongoing Public Forums on Taxpayer Needs and Preferences, presents a review of the 2016 filing season, and identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the upcoming fiscal year.

National Taxpayer Advocate Public Forums on Taxpayer Needs and Preferences 


For the last two years, the IRS has been developing a “Future State” plan that envisions how the agency will operate in five years and beyond. A central component of the plan is the development of online taxpayer accounts. In the National Taxpayer Advocate’s 2015 Annual Report to Congress, Olson praised aspects of the plan but expressed concern that (i) the IRS’s intent in developing online accounts is largely to save money in light of recent budget cuts by reducing telephone and face-to-face assistance and (ii) many taxpayers will not conduct business with the IRS through online accounts because they lack Internet access or skills, cannot complete the authentication process required to set up an account, do not trust the security of the IRS system, or would prefer to speak with an IRS employee. As a result, she expressed concern that critical taxpayer needs may go unmet under the Future State plan.

To provide a vehicle for direct public comment, Olson announced plans to hold Public Forums around the country, some in conjunction with Members of Congress who serve on committees actively engaged in IRS oversight. To date, Olson has held eight Public Forums and has several more planned. Two have been held in Washington, DC. Others have been held in Glen Ellyn, Ill., with Rep. Peter Roskam; Bronx, N.Y., with Rep. José Serrano; Hendersonville, N.C., with Rep. Mark Meadows; Red Oak, Iowa, with Sen. Charles Grassley; Baltimore, Md., with Sen. Ben Cardin; and Harrisburg, Pa., co-organized with Sen. Bob Casey.

Among the panelists at the Public Forums in Washington, DC, were representatives of four Federal advisory committees to the IRS and four major national organizations of tax practitioners. Two panels featured experts who reported on research studies that assessed public use of online services as well as the effects of the “digital divide.” Olson writes: “I continue to be concerned that the IRS’s design for the Future State ignores or dismisses the significant body of data that shows large portions of the taxpaying public is either unable or unwilling to engage with government online services for anything other than the most routine tasks, if those.” The report also points out that only about 30 percent of taxpayers seeking to register for the IRS’s “Get Transcript” application over the last month were able to do so because of enhanced authentication measures, which suggests many taxpayers may not even be able to establish online accounts in the current environment.

“At each of the [field] Public Forums, we heard from a panel of witnesses representative of the community we were visiting,” Olson wrote. Most panels included a representative from a Volunteer Income Tax Assistance (VITA) site and a Low Income Taxpayer Clinic (LITC); an attorney, Certified Public Accountant, or Enrolled Agent active in representing individuals and small businesses; and witnesses who focused on challenges faced by particular taxpayer groups, including English as a Second Language (ESL) and immigrant taxpayers, elderly taxpayers, farmers, U.S. taxpayers living abroad, disabled taxpayers, victims of identity theft, and small businesses victimized by payroll service provider fraud.

Today’s report contains extended excerpts from the transcripts of the Public Forums, organized around key concerns that Olson identified in her earlier report or that panelists consistently raised. Information on the Public Forums, including complete transcripts, is available at http://taxpayeradvocate.irs.gov/news/national-taxpayer-advocate-public-forums.

Olson announced that TAS will conduct a nationwide survey of a statistically representative sample of U.S. taxpayers about their needs, preferences, and experience with IRS taxpayer service and will hold focus groups on the IRS Future State at the IRS Tax Forums this summer.

Because the IRS Future State plan aims to establish how the IRS will interact with taxpayers in the coming years, TAS views it as its most important area of focus. TAS’s overriding goal will be to work with the IRS to ensure the plan provides for high quality taxpayer service and the protection of taxpayer rights. Based on the results of the National Taxpayer Advocate Public Forums, the nationwide survey, and the Tax Forum focus groups, Olson plans to “set forth our vision of the IRS Future State in the 2016 National Taxpayer Advocate’s Annual Report to Congress. This plan, I can say with confidence, will be based on taxpayers’ needs and preferences, as they and their representatives have expressed them to us.”

Overview of the Filing Season 


The report says the IRS delivered a generally successful filing season in 2016. Of particular note, the IRS substantially improved taxpayer service on its toll-free telephone lines as compared with 2015. In every year since FY 2008, the IRS has received more than 100 million telephone calls. During the 2015 filing season, IRS telephone service reached a low; the IRS answered only 37 percent of taxpayer calls routed to customer service representatives overall, and the wait time for taxpayers who got through averaged 23 minutes. During the 2016 filing season, the IRS answered 73 percent of its calls, and the wait time dropped to 11 minutes. Thus, the IRS nearly doubled the percentage of calls it answered and reduced wait times by more than half.

The report attributes this improvement both to additional funding provided by Congress and to effective use of that funding by the IRS. However, the report notes that IRS funding has been reduced by about 19 percent on an inflation-adjusted basis since FY 2010 and describes areas where the IRS has limited or eliminated important services.

Service at Taxpayer Assistance Centers (TACs). The IRS maintains approximately 375 TACs around the country that collectively serve more than five million taxpayers annually. Historically, the TACs were known as “walk-in sites,” but the IRS plans to eliminate virtually all walk-in service and require that taxpayers schedule advance appointments in all TAC locations by the end of the year. The report says this requirement will cause particular harm to (i) taxpayers who do not know the TACs have shifted to appointment-only scheduling and travel sometimes considerable distances to seek personal assistance and (ii) taxpayers who need assistance urgently and cannot wait to obtain an appointment. Under a pilot program testing appointment-only service, 20 percent of taxpayers had to wait between 13 and 41 days to obtain an appointment and five percent had to wait more than 41 days. The report says those wait times are too long for taxpayers with urgent needs. At several TACs, the IRS went so far as to refuse to accept tax payments or returns this filing season.

Limited Assistance with Tax-Law Questions. Both on its phone lines and in its TACs, the IRS continued recent restrictions on answering tax-law questions. During the filing season, the IRS answered only “basic” questions, deeming more complex questions “out of scope.” After the filing season, the IRS is not answering any tax-law questions at all, even though many taxpayers obtain legally authorized extensions of time to file. Last year, nearly 15 million returns were submitted after the filing season.

Taxpayer Burden Caused by Identity Theft Filters. The IRS screens all tax returns claiming refunds in an attempt to identify returns submitted by identity thieves. When the IRS identifies a return as suspicious, it generally sends the submitter a letter saying the submitter must verify his or her identity before it will release the claimed refund. The false positive rate of this program, known as the Taxpayer Protection Program (TPP), was 36.6 percent in 2015. TPP filters stopped nearly 2.1 million returns overall, so with the 36.6 false positive rate, the IRS stopped more than 760,000 returns filed by legitimate taxpayers. The National Taxpayer Advocate has expressed concern about the impact of this high false-positive rate on legitimate taxpayers. Many taxpayers, particularly the low income, depend on timely receipt of their refunds, so the impact of refund delays can range from mere inconvenience to extreme financial hardship. Accordingly, the National Taxpayer Advocate has recommended that the IRS refine its TPP filters to reduce the false-positive rate.

To date, it does not appear that improvements have been made. During just the first five months of 2016, TPP filters stopped about 1.8 million returns, and the IRS was projecting a similar false positive rate of 36 percent. Taxpayers seeking to verify their identities by calling the IRS encountered extreme difficulty getting through, causing many to wait extended periods of time to receive their refunds. During the 2016 filing season, the IRS received more than 4.4 million calls on its TPP telephone line. It answered just 22.7 percent – meaning that nearly four out of every five calls was not answered, by far the worst performance on any high-volume telephone line.

The report says: “TAS understands and supports the need for a variety of revenue protection strategies. But the IRS must recognize the need for approaches that minimize the burden on legitimate taxpayers. We recommend the IRS devote more resources to re-calibrating its filters during the filing season and establish a maximum target false-positive rate. By so doing, it could simultaneously block more fraudulent returns and reduce the number of legitimate returns it flags, thereby reducing inconvenience to taxpayers and its own unnecessary re-work.”

Limited Service Options for U.S. Taxpayers Living Abroad. The number of U.S. citizens living abroad was estimated at about nine million in mid-2016, and many non-citizens have a U.S. tax filing obligation, as evidenced by the nearly 642,000 Form 1040-series returns filed by nonresident aliens for tax year 2014. Yet taxpayer service options for these taxpayers are limited and continue to be reduced. Taxpayers located overseas generally cannot call U.S. toll-free telephone lines. Almost two years ago, the IRS closed the last four tax attaché posts abroad, eliminating face-to-face service as an option. For the 2016 filing season, the IRS eliminated its Electronic Tax Law Assistance program through which taxpayers could submit tax-law questions to the IRS and receive a response via email.

The report says: “The National Taxpayer Advocate is concerned the IRS is providing fewer options for international taxpayers even as the population of U.S. citizens abroad grows, and these taxpayers are facing greater challenges in voluntarily meeting their tax obligations, partly as a result of the Foreign Account Tax Compliance Act (FATCA), Foreign Bank and Financial Accounts (FBAR) reporting rules, and the Affordable Care Act (ACA).”

Priority Issues for FY 2017 In addition to the IRS Future State plan (discussed above), the report identifies and discusses 14 other priority issues the Office of the Taxpayer Advocate plans to focus on during the upcoming fiscal year. Among them are the following:

  • FATCA Burden. While implementing FATCA and similar international withholding provisions, the IRS withheld refunds from tens of thousands of U.S. taxpayers who were entitled to them. Much of the problem was attributable to the way the IRS attempted to match the Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, filed by the withholding agent against the Form 1042-S filed by the taxpayer with his or her income tax return. In one case, the IRS disallowed the refund claims of tens of thousands of foreign students at U.S. universities and colleges, most of whom were fully entitled to those refunds. In the coming year, TAS will advocate for the IRS to improve the accuracy of its data-matching procedures to reduce the number of freezes placed on legitimate international refund claims. 
  • Private Debt Collection Implementation. In late 2015, Congress passed legislation that generally requires the IRS to assign delinquent tax accounts it is not actively seeking to collect to private debt collection agencies. TAS will be actively involved in the implementation of the program to ensure the program rules follow the law without infringing on taxpayer rights; to seek a definition of the statutory term “potentially collectible inventory” that excludes the accounts of taxpayers who are experiencing economic hardship; and to urge the IRS to require the PCAs to disclose the portions of their operational plans, calling scripts, and training materials that affect taxpayers so the National Taxpayer Advocate, Congress and the public can evaluate whether their collection tactics are reasonable. 
  • IRS Levies on Retirement Accounts. Congress has enacted numerous laws that promote retirement savings. These laws further the public policy of ensuring individuals have sufficient assets on which to live after they retire. The IRS is permitted to levy on retirement assets but does not do so as a matter of policy unless it determines a taxpayer has acted flagrantly in seeking to evade the collection of the tax. At present, the IRS does not have a clear definition of the word “flagrant,” but rather lists examples of flagrant conduct. TAS is working with the IRS to develop a definition of “flagrant” conduct that allows levies to be made in extreme cases but continues to shield retirement assets in cases where a taxpayer is simply unable to pay.
  • Online Taxpayer Accounts. The National Taxpayer Advocate has long advocated that the IRS develop online taxpayer accounts as a valuable addition to the IRS’s taxpayer service offerings. As discussed in the context of the Future State development, however, the Advocate believes taxpayers should still have the option to work with IRS personnel by phone or in person. In addition, the IRS envisions granting account access to tax return preparers, most of whom are not currently licensed. During the coming year, TAS plans to work with the IRS to ensure it maintains adequate security protocols to protect taxpayer information, restricts taxpayer account access to credentialed preparers, and continues to provide telephone and face-to-face service to taxpayers who need or prefer to speak with an IRS employee. 
  • EITC Compliance. The Earned Income Tax Credit (EITC), one of the government’s largest means-tested, anti-poverty programs has a high improper payments rate. At the same time, eligible taxpayers often have difficulty proving their eligibility due to the complexity of the law, the difficulty in providing traditional documentation, and the IRS’s reluctance to accept alternative documentation sources. In her 2016 Annual Report to Congress, the National Taxpayer Advocate plans to expand on prior recommendations to reform the eligibility requirements and administration of the EITC in order to reduce improper payments while maintaining a high participation rate among eligible individuals. TAS also plans to work with the IRS to develop flexible guidance for acceptance of alternative documentation sources.
  • Identity Theft Victim Assistance Procedures. The problem of stolen identity refund fraud requires that the IRS improve both its detection of fraudulent returns and its procedures to assist taxpayers who have been victimized by identity theft. The IRS has made significant strides in both areas, but as discussed above, the false positive rate in the Taxpayer Protection Program (TPP) remains high. During the 2016 filing season, TPP filters stopped about 1.8 million returns, and taxpayers who called the TPP telephone line to verify their identities were told it would take about nine weeks for the IRS to release their refunds. During the coming year, TAS will work with the IRS to improve victim assistance, including by shortening the time to resolve cases and issue refunds. In addition, TAS will continue to urge the IRS to assign a single employee to work with identity-theft victims whose cases involve multiple issues or span multiple tax years. 

Later this month, TAS will release a second volume of the report that contains the IRS’s responses to the administrative recommendations the National Taxpayer Advocate made in her 2015 Annual Report to Congress, along with additional TAS analysis of, and comments on, the IRS responses.

The National Taxpayer Advocate is required by statute to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The statute requires these reports to be submitted directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year. The second report must discuss at least 20 of the most serious problems encountered by taxpayers, identify the ten tax issues most frequently litigated in the courts, and make administrative and legislative recommendations to resolve taxpayer problems. 

ABOUT THE TAXPAYER ADVOCATE SERVICE The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can help protect your taxpayer rights. We can offer you help if your tax problem is causing a hardship or if you've tried but haven't been able to resolve your problem with the IRS. If you qualify for our assistance, which is always free, we will do everything possible to help you. Visit taxpayeradvocate.irs.gov or call 1-877-777-4778. For more information, go to TaxpayerAdvocate.irs.gov or irs.gov/advocate. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA. Source - IRS Newsroom 

01/09/2018 Update: This article was originally posted on BGGE Blog | Site News | Free Stuff Alerts | New Arrivals | & More.

Saturday, April 30, 2016

Welcome to BGGE New Support Blog


Welcome to my new blog.  This blog was created to provide support for BGGE clients through articles, tips, and insights from various small business experts, with an occasional commentary on the challenges and triumphs of an aging freelance entrepreneur (me) working from home.


Not just for business owners, I'll also be adding reviews of some productivity tools that I personally use, a reading library, and resources for students, job-seekers, and retirees over the next few weeks.


Actually, bjg4bgge@blogspot isn't really new.  Initially, it was launched in 2009 as the "What's New" Blog.  I had just started a major revamp of BGGE.com, an 800-page site --- so most of my blog posts were about site updates.  At that time, a blogging tool was not offered by my website hosting provider, so I had to rely on a 3rd party blogging platform like Blogspot.

But things have changed since then.  As I am embark on another major overhaul of BGGE.com, I have decided to do a little spring cleaning - sorting through all my old posts, re-posting the more relevant articles, and throwing out the trash.  Now, site updates will be published on my company blog and Blogger will be used to publish support articles.  Please be patient as I spruce up posts and pages.


 I hope you find my new blog informative and useful.

Saturday, April 2, 2016

IRS Releases FY 2015 Data Book

Last month, the Internal Revenue Service released the 2015 IRS Data Book, a snapshot of agency activities for the fiscal year.

The 2015 Data Book describes activities conducted by the IRS from Oct. 1, 2014, to Sept. 30, 2015 and includes information about returns filed, taxes collected, enforcement, taxpayer assistance and the IRS budget and workforce, among others. This edition also contains charts that show trends, such as the decline in the number of audits and the reduction in telephone and in-person tax assistance, but increases in the use of online resources and volunteer tax assistance.

Highlights of this year's Data Book

  • During FY 2015, the IRS collected more than $3.3 trillion, processed more than 243 million tax returns and other forms, and issued over $403 billion in tax refunds.
  • With more than a 15-percent reduction in full-time-equivalent staffing compared to 5 years ago, operations across a number of areas were downsized, including the total number of individual tax return examinations, which decreased by 22 percent over the same time period.
  • The agency’s Website continued to get heavy use with more than 493 million visits to IRS.gov in FY 2015; and one of our most popular online tools, “Where’s My Refund?”, handled a record-breaking 234 million inquiries, a 24-percent increase over the prior year.
  • With a new online format, this year’s publication makes navigating data on taxpayer assistance, enforcement and IRS operations easier, with graphic depictions of key areas and quick links to the underlying data. The Data Book and its predecessor, the IRS Annual Report, have been published for more than 150 years, so this year marks a significant step forward in making IRS “Tax Stats” even more accessible.


An electronic version of the 2015 Data Book can be found on the Tax Stats page of IRS.gov. Printed copies of the 2015 IRS Data Book, Publication 55B, will be available May 2016 from the U.S. Government Printing Office. To obtain a copy, write to the Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954, or call (202) 512-1800 for voicemail, or fax a request to (202) 512-2250.

01/07/2018 Update:  This article was originally posted on BGGE Blog | Site News | Free Stuff Alerts | New Arrivals | & More.

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