The Internal Revenue Service Advisory Council (IRSAC) released its annual report today for 2016. Based on IRSAC’s findings and discussions in 2016, the council made recommendations on topics including:
- Evaluating the Effects of Penalties on Voluntary Compliance;
- Promoting Confidentiality of Treaty-Exchanged Information;
- Improving Fraud Prevention through Individual Taxpayer and Business Master File (BMF) Authentication;
- Enhancing the IRS2Go Mobile Application and Online Accounts; and
- Revising and Updating Circular 230.
With regard to penalties on voluntary compliance, IRSAC suggested that the streamlining and “modest liberalization” of penalty abatement decisions could help the IRS work more efficiently within its budget constraints to provide higher quality taxpayer service. Specifically, the council emphasized that their primary purpose should be to encourage voluntary compliance.
IRSAC recommended an expansion of existing taxpayer education materials regarding treaty-exchanged information and enhanced communication with taxpayers whose confidentiality was compromised or data misused. Fraud prevention may be improved through better authentication procedures at the point of filing and online enhancements to simplify tax return preparation and interactions with the IRS. A number of suggestions about the IRS2Go Mobile Application and Online Accounts generally focused on integrating all processes and information into a single account, including earlier access to personal tax documents such as Forms W-2 and Forms 1099.
Plans to revise and update Treasury Circular 230 focused on the statutory authority of the IRS to establish and enforce professional standards for tax practice, specifically the abandonment of the Registered Tax Return Preparer (RTRP) program.
IRSAC members volunteer their time to provide an organized public forum to present insights to the IRS from outside the government agency covering a wide range of tax issues. Its activities are administered by the Office of National Public Liaison, and its members include representatives from the taxpaying public, the tax professional community, small and large businesses, and the payroll community.
To read IRSAC’s full 2016 report, click here (PDF).