U.S. GOVERNMENT PUBLISHING OFFICE

33–658 WASHINGTON : 2019

THE TAXPAYER EXPERIENCE WITH THE 

INTERNAL REVENUE SERVICE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

DECEMBER 13, 2017 

Serial No. 115–OS09 

Printed for the use of the Committee on Ways and Means 

( 

ii 

COMMITTEE ON WAYS AND MEANS 

KEVIN BRADY, Texas, Chairman 

SAM JOHNSON, Texas 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

PETER J. ROSKAM, Illinois 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

PAT MEEHAN, Pennsylvania 

KRISTI NOEM, South Dakota 

GEORGE HOLDING, North Carolina 

JASON SMITH, Missouri 

TOM RICE, South Carolina 

DAVID SCHWEIKERT, Arizona 

JACKIE WALORSKI, Indiana 

CARLOS CURBELO, Florida 

MIKE BISHOP, Michigan 

RICHARD E. NEAL, Massachusetts 

SANDER M. LEVIN, Michigan 

JOHN LEWIS, Georgia 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

BRIAN HIGGINS, New York 

TERRI SEWELL, Alabama 

SUZAN DELBENE, Washington 

JUDY CHU, California 

DAVID STEWART, Staff Director 

BRANDON CASEY, Minority Chief Counsel 

SUBCOMMITTEE ON OVERSIGHT 

VERN BUCHANAN, Florida, Chairman 

DAVID SCHWEIKERT, Arizona 

JACKIE WALORSKI, Indiana 

CARLOS CURBELO, Florida 

MIKE BISHOP, Michigan 

PAT MEEHAN, Pennsylvania 

GEORGE HOLDING, North Carolina 

JOHN LEWIS, Georgia 

JOSEPH CROWLEY, New York 

SUZAN DELBENE, Washington 

EARL BLUMENAUER, Oregon 

iii 

C O N T E N T S 

Page 

Advisory of December 13, 2017, announcing the hearing .................................... 2 

WITNESSES 

Jennifer MacMillan, Enrolled Agent, Owner, Jennifer MacMillan, EA; Government Relations Chair, National Association of Enrolled Agents ................ 5 

Tameka E. Lester, Associate Director, Philip C. Cook Low-Income Taxpayer 

Clinic, Georgia State University College of Law ............................................... 17 

Karina Ron, Director, Center for Financial Stability, United Way of MiamiDade ...................................................................................................................... 28 

Lynnette Lee-Villanueva, Vice President, Tax-Aide, AARP Foundation ............ 34 

SUBMISSIONS FOR THE RECORD 

American Institute of Certified Public Accountants (AICPA) .............................. 58 

Coalition for Effective and Efficient Tax Administration (CEETA) .................... 65 

National Treasury Employees Union (NTEU) ...................................................... 70 

(1) 

THE TAXPAYER EXPERIENCE WITH THE 

INTERNAL REVENUE SERVICE 

WEDNESDAY, DECEMBER 13, 2017 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON OVERSIGHT, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:03 a.m., in Room 

1100, Longworth House Office Building, Hon. Vern Buchanan 

[Chairman of the Subcommittee] presiding. 

[The advisory announcing the hearing follows:] 

2 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON OVERSIGHT 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–1721 

Wednesday, December 13, 2017 

OS–09 

Chairman Buchanan Announces Hearing on 

The Taxpayer Experience with the 

Internal Revenue Service 

House Ways and Means Oversight Subcommittee Chairman Vern Buchanan (R– 

FL), announced today that the Subcommittee will hold a hearing entitled ‘‘The Taxpayer Experience with the Internal Revenue Service.’’ The hearing will focus on 

understanding taxpayers’ interactions with the Internal Revenue Service and soliciting feedback on how to improve the relationship between the agency and taxpayers. The hearing will take place on Wednesday, December 13, 2017, in 

room 1100 of the Longworth House Office Building, beginning at 10:00 a.m. 

In view of the limited time to hear witnesses, oral testimony at this hearing will 

be from invited witnesses only. However, any individual or organization may submit 

a written statement for consideration by the Committee and for inclusion in the 

printed record of the hearing. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit written comments for the hearing record must follow the appropriate link on the hearing page 

of the Committee website and complete the informational forms. From the Committee homepage, http://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you would like to make a submission, and click on the link entitled, 

‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, submit all requested information. ATTACH your submission as a 

Word document, in compliance with the formatting requirements listed below, by 

the close of business on Wednesday, December 27, 2017. For questions, or if 

you encounter technical problems, please call (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any materials submitted for the printed record, and any written comments in response to a request for 

written comments must conform to the guidelines listed below. Any submission not in compliance with these guidelines will not be printed, but will be maintained in the Committee files 

for review and use by the Committee. 

All submissions and supplementary materials must be submitted in a single document via 

email, provided in Word format and must not exceed a total of 10 pages. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

All submissions must include a list of all clients, persons and/or organizations on whose behalf 

the witness appears. The name, company, address, telephone, and fax numbers of each witness 

must be included in the body of the email. Please exclude any personal identifiable information 

in the attached submission. 

Failure to follow the formatting requirements may result in the exclusion of a submission. All 

submissions for the record are final. 

3 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TDD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

Note: All Committee advisories and news releases are available at 

http://www.waysandmeans.house.gov

f 

/ 

Chairman BUCHANAN. The Subcommittee will come to order. 

Welcome to the Ways and Means Oversight Subcommittee hearing on ‘‘The Taxpayer Experience with the Internal Revenue Service.’’ Today’s hearing is an important part of our efforts to reform 

the Internal Revenue Service. 

I have said before, this bipartisan effort is not an attempt to discredit the IRS or cast the agency in a bad light. I understand there 

are many public servants that are doing an outstanding job and 

work at the IRS. 

I have also made it clear I believe there is always room for improvement—continuous improvement. That was my model in business for 30 years before I came here. It should be a priority for the 

IRS. And I am committed to working with Ranking Member Lewis, 

my colleagues in Congress, and the agency to achieve that. 

For some perspective, in fiscal year 2016 the IRS collected more than $3.3 trillion in taxes. That is money generated by millions of 

hard-working Americans. In order to collect those funds, the agency 

processed more than 244 million tax returns and supplemental documents. That number includes individual and business tax returns. 

Of the 150 million returns filed by individual taxpayers, more 

than half were filed by paid preparers. This means at least 50 percent of individual tax filers do not have direct contact with the IRS. 

With more and more taxpayers seeking help to comply with the 

complex tax laws, it is critical we hear from those of you who directly interact with taxpayers on a regular basis. Without this critical input, it is difficult to get a full understanding of how taxpayers are being treated. 

Improving the relationship between the IRS and taxpayers starts 

with ensuring that the taxpayer’s rights are being respected. It is 

the duty of the IRS Commissioner to ensure that employees are familiar with that and act in accordance with the Taxpayer Bill of 

Rights. Key taxpayer rights include the right to be informed, the 

right to quality service, and the right to a fair and just tax system. 

The goal of our hearing today is to get a better understanding 

from you of how ordinary taxpayers interact with the IRS. Each of 

the witnesses represents an organization that helps thousands of 

taxpayers in their dealings with the IRS, whether by routine tax 

filing or through resolving tax controversy cases. I look forward to 

your testimony and your unique perspective with each of you. 

And now I yield to the distinguished Ranking Member from 

Georgia, Mr. Lewis, for his purpose of an opening statement. 

Mr. LEWIS. Good morning. Mr. Chairman, thank you very much 

for holding this hearing. 

I would like to thank you, each one of you, for being here today. 

I would like to thank our witnesses for being here today. 

4 

Before we begin, I would like to take a moment to address the 

Republican tax cut bill. This bill would increase the national debt 

by $2.3 trillion, and it will cause 13 million Americans to lose their 

healthcare coverage. That is not right. That is not fair. That is not 

just. That is wrong. 

All taxpayers expect, demand, and deserve better, much better, 

than legislation which puts politics before the good of the people. 

For the sick, the elderly, and the disabled, this bill may mean life 

or death. For middle-class, working, and immigrant families, this 

bill would mean an increase in taxes. For students, this bill would 

mean it is more difficult to realize their dream of a good education. 

In particular, I am concerned about how this bill would impact 

the IRS and taxpayer services. We have not had a single hearing 

on the challenge of implementing this bill. We have not had a single hearing on the confusion this bill would create during the tax 

filing season which begins in a few short weeks. 

Since 2010, Congress cut the agency’s budget by almost $1 billion. I have said time and time again that you cannot get blood 

from a turnip and you cannot justify robbing poor Peter to pay billionaire Paul. It is clear that the IRS does not have enough funding, staff resources, or time to handle these significant changes in 

tax law. 

Throughout the year, this Subcommittee has done good work, 

and I appreciate all of the good work you have done, Mr. Chairman, necessary work, the people’s work. Mr. Chairman, I hope that 

we can continue to find ways to work together and give this agency 

the tools, staff, and resources it needs to serve taxpayers. 

This morning, I look forward to learning more about the taxpayers’ experience with the agency, the low-income taxpayer clinics, and the other IRS partners who provide free tax services to 

low-income and elderly taxpayers. Their insight should guide our 

work to make sure that taxpayers have more access to good quality 

in-person, online, and telephone services. 

In closing, I would like to thank each of the witnesses for being 

here today and for the good work you do to serve and support taxpayers. I look forward to your testimony. 

Again, Mr. Chairman, thank you for holding this hearing. I yield 

back. 

Chairman BUCHANAN. And thank you, Mr. Lewis. 

Without objection, other Members’ opening statements will be 

made part of the record. 

Today’s witness panel includes five experts. Jennifer MacMillan 

is an enrolled agent and owner of Jennifer MacMillan, EA, testifying on behalf of the National Association of Enrolled Agents. 

At this time, I would like to recognize the gentleman from Georgia to introduce his witness, the next witness. 

Mr. LEWIS. Well, thank you, Mr. Chairman. 

It is my honor to introduce Ms. Tameka Lester. Ms. Lester is the 

Associate Director of the Philip C. Cook Low-Income Taxpayer 

Clinic at Georgia State University College of Law located in my 

congressional district. 

Thank you, and welcome. 

Chairman BUCHANAN. Thank you, Mr. Lewis. 

5 

Next, I would like to recognize the gentleman from Florida, Mr. 

Curbelo, to introduce the next witness. 

Mr. CURBELO. Thank you very much, Mr. Chairman. 

And I am proud to introduce this morning Ms. Karina Ron, Director of the United Way Center for Financial Stability with United 

Way of Miami-Dade, an organization that all throughout the country, but especially in our community, makes such a big difference 

for so many people in need. 

So, Ms. Ron, I am very grateful that you are here today, and I 

look forward to hearing the entirety of your testimony. But, of 

course, you know I have a special interest in the VITA program, 

which you all are so active in. So thank you. 

And thank you, Mr. Chairman, for this opportunity. 

Chairman BUCHANAN. And thank you. 

Finally, we have with us Ms. Lee-Villanueva, Vice President of 

the Tax-Aide program operated by the AARP Foundation. 

The Subcommittee has received your written statements. They 

will all be made part of the formal hearing record. You have 5 minutes to deliver your oral remarks. 

We will start with you, Ms. MacMillan. 

STATEMENT OF JENNIFER MACMILLAN, ENROLLED AGENT, 

OWNER, JENNIFER MACMILLAN, EA; GOVERNMENT RELATIONS CHAIR, NATIONAL ASSOCIATION OF ENROLLED 

AGENTS 

Ms. MACMILLAN. Thank you, Chairman Buchanan and Ranking Member Lewis. 

I speak on behalf of the National Association of Enrolled Agents, 

which represents over 55,000 enrolled agents. EAs are tax experts 

licensed by the Treasury. We must pass a rigorous Treasury-administered exam and are subject to background checks as well as 

meeting ongoing continuing education and ethics requirements. 

The IRS, for better or worse, is the face of the Federal Government for most citizens. Increasingly, EAs, who assist taxpayers at 

every level of administrative dealings with the IRS, believe taxpayer service has in recent years deteriorated to an unacceptable 

level. 

Our written statement details our concerns with IRS taxpayer 

service. This morning, however, I will focus on three issues: the 

IRS focus on providing assistance on a one-size-fits-all basis, concerns regarding post-filing assistance, and bolstering taxpayer 

rights. 

IRS provides three taxpayer service channels—face-to-face contacts, telephone, and self-help on the IRS.gov website. All can be 

helpful, but each has its limitations. 

IRS serves over 5 million taxpayers annually at their Taxpayer 

Assistance Centers, or TACs. These face-to-face resources are vital, 

particularly for the most vulnerable members of our society. Yet, 

we note they are subject to limited availability, both in hours and 

training, and in location. 

These centers are helpful for basic tax questions, but the IRS refers taxpayers with more complicated issues to other channels or 

to paid preparers. While the latter may be good for enrolled agents, 

it is not necessarily good for taxpayers, and it illustrates the need 

6 

for Congress to make policy determinations about what level of 

service is acceptable from the IRS. 

At the IRS call centers, levels of service have steadily declined 

since 2010, reaching 37 percent 2 years ago. At that time, wait 

times also increased dramatically. 

Last year, with additional resources, IRS significantly improved 

the level of customer service at these call centers. Notwithstanding 

this concrete improvement, it appears that additional funding will 

not be available in the fiscal year 2018 budget. This will likely result in fewer taxpayers and practitioners receiving necessary services. 

Finally, taxpayers are increasingly solving pre-filing basic issues 

by visiting IRS.gov. The IRS website has recently been revamped, 

and we encourage the IRS to continue to work with the practitioner 

community and the public to improve the website. While IRS.gov 

drives down agency costs, not every taxpayer is well-equipped to 

use a self-help version. 

As daunting as filing can be for taxpayers, dealing with enforcement matters can quickly become overwhelming. Taxpayers have a 

limited number of choices when they disagree with a notice or have 

a valid explanation the IRS should consider. They can try to reach 

the IRS to resolve the issue, they can pay a tax professional to take 

the matter off of their hands, or they can pay an assessment that 

is more than they truly owe. We often see taxpayers give up after 

spending hours waiting on hold or having their calls dropped. 

Campus audits are a prime example of this predicament. While 

correspondence exams increase IRS efficiency, they typically increase taxpayer burden as well. Churning out computer-generated 

exams demands that taxpayers have the right to contest the proposed actions of the IRS. Communicating with a human at the IRS 

could often resolve these cases quickly and efficiently, but the IRS 

lacks the ability to hire and train sufficient personnel for these necessary contacts. 

To increase the quality of taxpayer service at the IRS, Congress 

should consider the following policy and legislative changes: 

Provide IRS with additional targeted resources, as detailed in 

our written testimony. 

Create and fund dedicated training. 

Increase the authority and set higher standards for field personnel. 

Provide collections personnel the authority and training to quickly resolve cases when they deviate slightly from the financial 

standards to facilitate payments from taxpayers. 

And re-evaluate national standards for collection information 

statements. 

We also recommend giving the Taxpayer Advocate Service authority to make adjustments and expand dispute resolution options 

to all taxpayers. 

For most taxpayers, filing a return is a daunting undertaking, so 

it is no wonder over half of filers use paid preparers. The vast majority of paid preparers are not subject to any standards or even 

background checks. 

While many unenrolled preparers are conscientious and knowledgeable, many are not. The IRS cannot require or enforce even 

7 

minimal standards on these individuals, although taxpayers expect 

and deserve to be able to have confidence that the person preparing 

the return is competent to do so. 

Thank you, again, for allowing me to testify today, and I look forward to answering any questions you may have. 

[The prepared statement of Ms. MacMillan follows:] 

8 


33658A.001

NA_~ POW'ERJNG AliLERICA' S TAX EXP1tllTS 

---------+---------

The State of Taxpaye•· Se•·vice at the Jnten•al Revenue Se•·vice 

Written Statement of 

J ennifer MacMillan, EA on behalf of 

TheN ational Association of Enrolled Agents 

Decembe•· 13, 2017 

The National Association of Enrolled Agents (NAEA), represents the interests of over 55,000 

enrolled agents nationwide. Enrolled agents are tax experts, licensed by the Department of 

Treasury. 1l1ey must pass a thorough three-part Treasury-administered exam covering all 

elements of the Internal Revenue Code. Additionally, they are subject to background checks and 

must meet continuing education and ethics requirements to continue as enrolled agents in good 

standing. 

The Internal Revenue Service, for better or worse, touches more U.S. citizens than any other 

federal department or agency. It is the face of the federal government for most citizens. 

Increasingly, enrolled agents, who are the frontline representatives of taxpayers at every level of 

the tax administrative system, are expressing the view that the quality of taxpayer service within 

the IRS has deteriorated to an unacceptable level over the last five years. 

Twenty years ago, the National Commission on Restmcturing the IRS provided a guiding 

principle for policymakers "that taxpayer satisfaction must become paramount at the new IRS 

and that the IRS should only initiate contact with a taxpayer if the agency is prepared to devote 

the resources necessary for a proper and timely resolution of the matter." The report went on to 

ask: 

Was filing your tax ren•m easier than the previous year? 

Did the IRS personnel treat you respectfully and professionally? 

Were your questions and problems handled as smoothly as account inquiries with your 

bank, credit card company, or utility? 

Based on anecdotal evidence, enrolled agents believe these three questions still cannot be 

answered "yes" by all taxpayers. Today, I will attempt to paint a picture of the state of taxpayer 

service at the agency from the viewpoint of taxpayers. 

NAEA takes an expansive view of customer service, encompassing the entire "pipeline" of the 

IRS tax administration workflow: pre-filing issues, tax lD numbers, withholding and estimated 

tax payments, access to rerums and instmctions, filing, post-filing inquiries and adjustments, J.D. 

theft, compliance notices, audits - both office and correspondence - and collections. Too often, 

policymakers and the IRS create a false dichotomy between taxpayer service and taxpayer 

compliance. From taxpayers' perspective, all aspects of their interaction with the IRS are 

essentially compelled. "Voluntary compliance" is a misnomer; even "voluntary self-assessment" 

is a stretch. Taxpayers on a whole file tax returns and respond to IRS inquiries because it's the 

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9 


33658A.002

right thing to do, but also because they arc fearful of the consequences of noncompliance. 

Because they are afraid, it is incumbent on the IRS and Congress to ensure that the IRS does its 

job fairly, accurately and timely at all points of the tax administration process. 

The "Pipeline" 

Pt·e-fll.ing Sta~ - Before a tax return is ever filed, taxpayers may find they must interact with 

the IRS. Many taxpayers require tax ID numbers other than a Social Security number. Some 

taxpayers have tax planning questions or questions about estimated taxes or withholding. 

Additionally, once taxpayers begin the process of preparing to file they face a myriad of 

complicated questions to be addressed. Taxpayers have three options to find answers: Face-toface contact with the IRS; calling the agency; and self-help on lRS.gov. All three options can be 

helpful, but each has its limitations and drawbacks. 

Typically, IRS experiences over five million mmual visits to walk-in resources known as 

Tax payer Assistance Centers (fA C). These face-to-face resources are extremely important for 

lower income taxpayers, the elderly, less educated, and English-as-a-second-language 

imliviuuals. We see lwo problems involving lhis resource. Firsl, ils availabilily bulb in localion 

and in hours. Frankly, with the budget cuts the IRS has absorbed over the last six years, it is 

amazing that more TAC resources have not been shuttered. The Taxpayer Advocate points out in 

her latest report to Congress that since 2010, the IRS budget has been reduced by nearly 20 

percent on an inflation adjusted basis. In most rural areas, taxpayers are looking at a 100 to 200-

mile round trip to have a face-to-face contact with an IRS employee. Additionally, because 

T ACs are typically open from 9 AM to 5 PM, for workiltg class citizens, a visit means taking 

time off from work. Because of the IRS's new appointment-only system, taxpayers who show up 

without an appointment are routinely tunted away. The TACs have completely stopped offering 

free tax preparation for low income, elderly, and disabled taxpayers and, as noted above, will not 

answer "out-ol~scope" tax law questions during the filing season and will not answer any tax law 

questions outside the filing season. Considering the limited resources available to IRS, we do not 

see how they have any other choice. Obviously, this is a basic resource issue for congressional 

policymakers. 

The second problem with T AC is training. These centers are helpful for basic tax questions, but 

for more complicated issues the IRS is b1wll about steering taxpayers to hire paid preparers. 

While this is good for enrolled agents, it is once again a policy decision for Congress about what 

level of service is acceptable from the IRS. Better trained T AC assistors mean taxpayers, taking 

time off from work and/or driving long distances, will have better service. Imagine making the 

significant sacrifice of time and gas to attempt to be compliant with the tax laws only to be told 

you need to hire someone to help you because the assistors are not adequately trained. 

Phone resources have similar problems. The percentage of calls answered has steadily declined 

since 20 I 0, resulting in an abysmally low 37 percent two years ago. IRS showed last year that 

they can answer the phones faster and resolve problems more accurately if they are provided the 

resources. Unfortunately, it looks like that additional funding will not be available for the next 

budget. This lack of funding will mean longer waits, more dropped calls, and we are concerned it 

will result in a further reduction of the type of questions IRS persollJlel will be trained to answer. 

It is also important to keep in mind that passage of the Tax Reform legislation will significantly 

drive up calls into the agency, even if most changes are not effective until next year. 

2 
10 


33658A.003

Finally, more and more taxpayers are solving their basic pre-fling issues by visiting IRS.gov. 

The IRS webpage is invaluable for taxpayers and practitioners alike. The IRS bas heard several 

basic complaints about IRS.gov over the years: it was at times difficult to locate basic 

information quickly because of the cluttered nature of the entry page; search queries often 

resulted in hundreds of useless results; queries on commercial search engines rarely resulted in 

identifying IRS.gov resources; once the TRS posted something on their website, it stayed even 

after it was no longer relevant or even accurate; and the website was not compatible with mobile 

devices. 

The IRS has only recently launched a revamped IRS.gov to address many of these basic 

problems. The entrance page is much better designed and less cluttered. While the response 

from our membership is mixed at best, it seems taxpayers are seeing some improvements. Search 

queries from both the website and from commercial search engines seem to be providing the 

most up-to-date information directly ii·om IRS.gov. Outdated infonnation seems to have been 

removed from the site. The site works better on mobile devices. We hope that the TRS will 

pledge to continue to work with the public and the practitioner community to vigorously manage 

and improve IRS.gov. Government agencies, and even the private sector, tend to "fix" problems 

ami then allow websites Lo grow stale. B.:cause of the importan<:e of IRS.gov Lo taxpayers and 

practitioners, IRS cannot rest on its laurels. It must continue to improve and evolve the website if 

the agency is to provide services at a high level. 

We would be remiss if we did not mention IRS Future State. We agre.e with the IRS's assessment 

that Future State provides value for taxpayers and practitioners. We do not believe, however, that 

the IRS will see the utilization rates from the public that they seem to expect. Authenticating 

themselves is still proving to be difficult for most taxpayers. Also, since taxpayers will rarely 

actually access their accO\mts, they will forget passwords and uscmames and will need customer 

service support, for which we fear the agency will not be prepared. The National Association of 

Enrolled Agents believes strongly that IRS needs to focus resources early on providing robust 

accounts for Circular 230 practitioners - enrolled agents, certified public accountants, and 

lawyers. IRS is quick to acknowledge that practitioners are valued partners in tax administration, 

however the Service has not placed a high priority on advancing practitioner service.s as rapidly 

as individual taxpayer accounts. Because solving problems quickly and efficiently is core to a 

practitioner's business, as well as the significant role we play in tax administration, we urge a 

more rapid deployment of practitioners services. 

Filing~~ - For most taxpayers, filing a tax retum is a daunting undertaking. According to 

testimony by former Commissioner John Koskinen, about 80 million retums, or 56 percent of 

the total individual tax retums filed each year, are done by paid preparers. Another 34 percent of 

taxpayers use tax preparation software, making a total of 90 percent of taxpayers who seek some 

form of assistance. 1 The current tax refonn legislation could provide some relief from filing 

burden yet most areas in the Internal Revenue Code will continue to be overly complex. 

Individual taxpayers will continue to encounter convoluted mles and multiple complicated 

decision points; the eamed income tax credit, child credit, rental property and schedule C 

income, to name a few. Even making the determination of which filing status to nse can be a 

surprisingly difficult task. 

1 \Vritten 1·esthoony of John A. Koskinen, Conuuissioner lntem.al Revenue Service before 1be Senate Finauce 

Committee, AprilS, 2014 

3 
11 


33658A.004

For low income taxpayers, finding competent and ethical tax retum preparers is key to both the 

taxpayer experience and the integrity of the tax administration system. The Volw1teer Income 

Tax Assistance program (VITA) and other non-profit groups are essential elements to the ftling 

season, which is why many enrolled agents - retired and active - participate as volunteers. The 

VITA program does have significant limitations on the taxpayers they can assist, and volunteers 

are barred from preparing anything more than very simple tax retums. Circular 230 practitioners 

provide higb quality tax services to taxpayers, having passed a rigorous test, maintaining 

competence through continuing education, and are held to high ethical standards. While many 

unenrolled and unlicensed preparers are conscientious and knowledgeable in the complex tax 

laws and regulations, many are not. This fact, along with a natural desire of most taxpayers to 

maximize refi.mds, results in a toxic situation that undermines tax compliance and usually results 

in taxpayers being stuck dealing with IRS enforcement once the noncompliance is discovered. 

Unfortunately, the IRS cannot require or enforce even minimal standards on these individuals, 

who make up the majority of the tax preparation industry. 

The IRS's desire to stop tax fraud and stolen identity fraud refunds leads to one of the most 

difficult experiences for modem day taxpayers: a frozen tax retu.m/refund. On the refund fraud 

side, the IRS has established electronic screens to stop fraudulent refunds from being sent out. 

While these screens are essential for combating fraud, they raise particularly difficult problems 

for people with legitimate returns caught itl the screens because the IRS has not created a 

dedicated process for appealing these holds. This filing limbo causes a great deal of anxiety at 

the very least and economic hardship for many. As pointed out by the Taxpayer Advocate in her 

recent report to Congress, the IRS does not even know the magnitude of the problem because 

they do not keep track of the number of legitimate taxpayers caught in the agency's fraud 

screens. 

For tax retums screened because of suspicions of ID theft, the IRS sends a letter to taxpayers 

asking them to call a dedicated phone line to authenticate their identity. If taxpayers fail the 

phone authentication test, they must travel to a Taxpayer Assistance Center to authenticate in 

person. Once a taxpayer's identity is stolen and a fraudulent tax return has been filed using their 

Social Security number, they can be assigned an Identity Protection Personal Identity Number 

(TP PIN) to protect future tax retum filings. While the process is burdensome on both the IRS and 

the taxpayer, it bas been e!Iective. Unfortunately, taxpayers who have not already experienced 

identity theft cannot be assigned an IP PIN. IRS cites the cost of providing TP PINs to taxpayers 

who wish to opt in to the program as the reason for this limitation. 

Post-Filing Stage - As daunting as tax filing can be for taxpayers, dealing with notices, audits, 

appeals and collection matters can quickly become overwhelming. So much so, that as a 

professional, enrolled agents cannot not legitimately recommend to anyone that they attempt to 

fight an enforcement action or endure an audit without the help of a highly-trained Circular 230 

representative. 

Enrolled agents are fmding that compliance personnel increasingly lack a basic understanding of 

the statutes and regulations they are tasked to admmister. More disturbingly, some do not know 

their own procedures as laid out in the Intemal Revenue Manual (IRM). 

4 
12 


33658A.005

Additionally, with few exceptions, dealing with the IRS has become a game of hurry-up-andwait. Taxpayers and their representatives respond in a timely fashion to notices or requests for 

audit responses, but then fmd themselves waiting long periods of time for an acknowledgment or 

response, let alone a resolution of their case. 

While correspondence exams increase efficiency for the IRS, they typically increase taxpayer 

burden and can be more expensive and take more time than an in-person audit. Because there is 

only one chance lor resolution, taxpayers expend substantial time and effort to present a 

relatively simple case that could be taken care of with a single telephone call or even a face-toface meeting. 

When responses from taxpayers arrive at the correspondence examination unit, they can sit in a 

queue at the IRS processing center for weeks, or even months depending on the backlog, causing 

great anxiety on the part of taxpayers. These computer-generated cases are assigned to tax 

examiners only when a response is received from the taxpayer or their representative. If all goes 

well, the IRS issues a letter thanking them for their responses, infom1ing them nothing more is 

needed. All too often though, taxpayers respond with a timely submission of documentation, but 

the: C<ISC: doc:s not rc:cc:ivc: proper consideration of !acts and circumstancc:s, and the: only 

subsequent communication from the IRS is an audit report with a balance due notice enclosed. 

If a protest of this assessment is submitted to the IRS, the response is often inadequately handled 

as well. In many cases, it appears that the protest was hastily reviewed by an inexperienced or 

under-trained employee, resulting in the denial of a valid protest. If this denial is appealed, 

sin1ilarly trained employees evaluate the argument, adding another step in an exercise in futility. 

Any further requests for a referral to Appeals of these disputed items are all too often not 

considered or acknowledged, and a Statutory Notice of Deficiency is summarily sent to the 

taxpayer. 

Once the computer has taken this action, filing a petition iJl Tax Court is the only way to get the 

case heard by a qualified Appeals Officer. Enrolled agents believe there must be greater 

accessibility to be heard by an independent Appeals Officer at multiple stages while the 

taxpayers' fate is being detennined in these automated audit pipelines. 

Enrolled agents have noticed that as mastery of the laws and regulations bas dechned, there bas 

been a c-orresponding decline in resolving cases quickly and fairly. In some cases, we believe tllis 

change in culture means that rather than getting to the right answer and then moving on, IRS 

compliance personnel in the field and campuses are more inclined to "find something wrong" if 

they have invested substantial time on an examination. In other cases, we have seen, the 

Service's desire to close cases as quickly as possible with their limited resources spread thin has 

Jed to a hesitation on the part of IRS personnel to accept follow-up documentation or request an 

explanation when documentation is not understood. 

The IRS Taxpayer Advocate Service provides a safety net for taxpayers who are unable to 

resolve their issues with the IRS through normal channels. The advocates working cases are 

generally well trained and knowledgeable, and can quickly identify and justify recommendations 

for resolution in many cases. In the past, the Taxpayer Advocate Service employees could adjust 

taxpayer accounts, but in recent years, Advocates' authority only extends to making 

recommendations, which must then be carried out by anotber IRS employee. In certain cases, the 

5 
13 


33658A.006

process of recommending action and dependence on a second IRS employee to manually process 

an adjustment is inefficient and in many cases, unnecessary. 

In the context of the IRS' Future State planning, we must emphasize an ongoing need for 

personal contact, either through a TAC or on the telephone. As mentioned earlier, the bold new 

dire.ction the IRS has laid out, and continues to develop, must be realistic. The post-filing issues 

that arise are heavily dependent on computers and taxpayers are most vulnerable when additional 

tax is assessed or an action is taken against them. Interaction with a trained, knowledgeable 

human should be prompt and thorough. At a minimum, the IRS should carefully consider 

taxpayers' explanations, explain the law to them when they are under scrutiny, and make every 

attempt to determine the correct amount of tax. Lacking the resources to provide this level of 

service, these programs are terribly unfair. 

Appealing Post-Filing ss e~ - Historically, Appeals Officers were experienced and 

knowledgeable and operated in a culntre of resolving cases quickly and fairly. Over time, as 

resources have dwindled system-wide, more cost-effective alternatives have been developed by 

the IRS. ln our experience, many of these cost-saving processes have led to severe reductions in 

service leading to taxpayer rights being compromised. The result has been reduced public 

confidence in the U.S. tax system as fair and equitable. 

The issue at hand is that there are not enough Appeals personnel to provide taxpayers with inperson conferences across the 50 states and territories. For example, between fiscal years (FYs) 

2013 and 2016, the number of Appeals Hearing Officers available to resolve cases dropped by 24 

pcrcenr. Consequently, the IRS created Campus Appeals units, which rely on telephone and now 

video conferences to handle their workload. 

Root Causes of the Decline in Tax a 'er Service 

IRS Budget: In the last five years, the IRS budget has declined from $12.146 billion in 2012 to 

$11.235 billion in 2016. As a result, the number of revenue agents decreased 22 percent from 

10,216 to 7,937, and the number of tax compliance officers decreased 28 percent from 1,154 to 

832. Contact representatives withi11 the Automated Collections System (ACS) has decreased 22 

percent, from 2,426 in FY 2012 to 1,897 in FY 20 16. Enforcement personnel are not typically 

seen as customer service. However, if a taxpayer receives a Jetter or notice about their account 

and then arc not able to resolve the issue in a timely and accurate fashion, then the non-resolution 

does become a customer service issue. 

Retirements: The IRS is hemorrhaging experienced, well-trained personnel. Since 20 I 0, 

approximately 17,000 employees have departed from the TRS and 40 percent more are or will be 

eligible to leave the IRS in the coming year. The loss of these experienced employees has 

necessitated the hiring, training and deployment of many inexperienced persollllel in a short 

period of time. Exacerbating this problem is the fact that training at the IRS is done by taking 

experienced people out of the field to pass on their knowledge to the newly hired, creating an 

even larger vacuum. 

Lack of Quality Training: The IRS traiuing budget has been slashed from $172 million in FY 

2010 to about $22 million in 2013 (unable to obtain more updated data), a staggering 87 percent 

2 Taxpayer Advocate Service 2017 Report, voltuue 2, page 1t2 

6 
14 


33658A.007

reduction. Training is not only key to increasing knowledge and understanding of the tax code 

and regulations, but is also among the IRS's responsibilities under the Taxpayer Bill of Rights. 

On the collection side, revenue officers have been given very linle discretion or training on 

resolving taxpayer cases. When a taxpayer's expenses exceed the financial standards for an 

Installment Agreement, the taxpayer must enter a payment plan that is unaffordable, which 

greatly increases the likelihood of default down the road. In addition, the National Standards for 

Collection Infonnation Statement analyses are unrealistic for taxpayers living in high cost areas. 

More flexibility in making determinations of collection potential would improve the public's 

perception that the system is fair and equitable. 

Recommendations 

To increase the quality taxpayer service at the IRS, Congress should consider the following 

policy and legislative changes: 

Increase IRS budget fo•· hiring pet·sonnel. With this increased budget, the TRS should increase 

staffing in every division, especially at the points of significant taxpayer contact (such as all call 

centers and TAC counters), increase training at all levels, and guarantee that taxpayers do not 

have to travel more than 100 miles (where feasible) to have a face-to-face meeting with Appeals 

personnel. At the same time, it is important for the IRS to continue exploring video-conferencing 

and other options for increasing communications. Additionally, once a taxpayer responds to an 

IRS notice or lener, the IRS should communicate a decision to the taxpayer within 30 days. 

Compliance, enforcement, and Appeals personnel should be given greater authority to settle 

cases early and the IRS should evaluate them based on a singular focus on early and fair 

resolution of disputes. Finally, we would also urge Congress to take into consideration the need 

for additional funding for implementation of the Tax Refonn legislation. Taxpayers will need 

IRS guidance quickly and frontline employees will need to be retrained in all aspects of tbe 

legislation. 

Create and fund a dedicated training division within the IRS to inct·ease competency and 

change the culture. A dedicated training division will streamline the IRS education process, 

ensuring that tax law and administrative policies be taught consistently throughout the country 

while guaranteeing that experienced personnel will not have to be taken offline to train new 

employees. Instructors will be tasked to research state-of-the-art tax administration techniques at 

the state, local and international levels and will help incorporate these techniques into their 

education materials and the Internal Revenue Manual. Additionally, as was done immediately 

after passage of the IRS Restrucruring and Refom1 Act of 1998, IRS training shall focus on early 

and fair resolution of tax disputes. Only clear and consistent training will move the IRS to a more 

taxpayer service-oriented organization. 

Increase the authority of and set higher standards fo•· Appeals personnel. While we 

welcome and applaud the IRS for the recent addition of vide.o conferencing as a substitute for 

some in-person Appeals hearings, we suggest additional provisions be implemented. The 

knowledge, experience and authority of the Appeals personnel should meet a higher standard 

than the campus Appeals Technical Employees, who may have very little authority and may not 

grasp the intricacies of the cases assigned to them. 

7 
15 


33658A.008

Give Collections personnel wide•· discr etion to •·each early agreements on payment plans. 

Congress and the IRS need to give collections personnel the authority and training to resolve 

cases quickly that might otherwise deviate slightly from the fmancial standards to facilitate 

payments by taxpayers. Additionally, the IRS should reevaluate the National Standards for 

Collection Information Statements by either adjusting the allowable living expenses for regional 

or local cost of living variations, or by returning to use of a dollar range, based on gross monthly 

income (as was the case prior to the IRS decision in 2007 to apply a single dollar amount for 

food, clothing and other items, based on family size alone). 

Give the Taxpayer Advocate Service authority to make adjustments, rathet· than merely 

making •·ecommeudations to ffiS pe.-sonnel. IRS Taxpayer Advocate Service is at the 

forefront of problem resolution within the IRS. We recommend reinstituting a Problem 

Resolution group with representation from examination, appeals and coUection housed in the 

Taxpayer Advocate department with fixed authority to resolve issues up to $10,000 and close 

cases. 

Collections personnel must r eft·ain from bypassing representatives with active powet·s of 

allot·uey. Congress should rc:emphasiLc: and reaffirm lhe consettuc:ncc:s of violalions of 26 USC 

7525, to ensure that IRS personnel and PCAs shall not ignore valid powers of attorney by 

directly contacti ng taxpayers by telephone or at their residences or places of business. 

RequiJ·e IRS exam and collection pet·sonnel to offer alternative dispute resolution options. 

We commend the IRS for the expansion of Fast Track Settlement earlier this year, bringing the 

opportunity for small business and individual taxpayers to resolve unique examination issues 

through Appeals, allowing for consistency with large and mid-sized businesses. We recommend 

that the IRS expand altemativc dispute resolutions options to all taxpayers and that exam and 

collection personnel be required to offer these options at the appropriate time. 

Provide ffiS with the autho.-ity to establish mi.nimum standards for unenroUed tax 

preparet·s. Congress should override Loving and all subsequent cases relying on its holdings and 

provide specific authority for the IRS to require all non-<:redentialed paid tax preparers to meet 

minimum standards. Such standards should include passing a one-time competency exam 

administered under the auspices of the Department of Treasury, requiring tax compliance 

background checks, setting continuing education requirements, and requiring compliance with 

strict ethical standards. 

To facilitate earlier •·esolutions to disputes, the IRS should debut online accounts for tax 

practitioners with a t·obust and secure means of communicating with IRS personnel. Access 

to secure online communication is especially important as the agency becomes increasingly 

reliant on correspondence audits that currently require snail-mailing documents to anonymous 

IRS campus employees. Communicating through the practitioner's online account would go a 

long way to improving resolution times and hopefully mitigate, if not eliminate, the lost 

documents experience. Individual online accounts should display a Publication I equivalent 

when taxpayers utilize payment options in their accounts. The IRS should provide guidance on 

the use of private sector electronic signatures for Fonns 2848 and 8821 for Circular 230 

practitioners. 

The National Association of Enrolled Agents commends the Committee on Ways and Means in 

its bipartisan approach to improving the Internal Revenue Service. Our membership believes 

8 
16 

f 


33658A.009

strongly that a well-funded, well-trained IRS, fully cognizant of taxpayer rights and the value of 

Circular 230 tax practitioners to the process, will improve the taxpayer experience at every level 

of the organization. We look forward to continuing our work witlJ the Committee. 

9 
17 

Chairman BUCHANAN. Thank you. 

Ms. Lester, you are recognized. 

STATEMENT OF TAMEKA E. LESTER, ESQ., ASSOCIATE DIRECTOR, PHILIP C. COOK LOW-INCOME TAXPAYER CLINIC, 

GEORGIA STATE UNIVERSITY COLLEGE OF LAW 

Ms. LESTER. Chairman Buchanan, Ranking Member Lewis, and 

Members of the Subcommittee, thank you for the opportunity to 

testify and discuss IRS reform and the taxpayer experience. 

I want to spend the next few minutes talking about the low-income taxpayers we see at the Georgia State University Low-Income 

Taxpayer Clinic, how they interact with the Internal Revenue Service, and what low-income taxpayers need to effectively gain access 

to the Internal Revenue Service. 

Our clients come from all walks of life. They are members of different political parties, socioeconomic groups, and have different 

cultural backgrounds. Some have always struggled to make ends 

meet, while others have fallen on hard times after losing their job 

or the result of an injury or sickness. 

The theme, however, is that time and money are finite and limited resources. The VITA program provides low- to no-cost tax representation services, and refundable credits like the earned income 

tax credit make a tremendous difference for them in bridging the 

poverty gap. 

But what happens when the IRS has questions about their return or determines a taxpayer has gotten a refund that they are 

not entitled to? When it is time to work with the IRS, what are 

their options for communicating with the service? 

We must consider how we can better serve and provide greater 

accessibility to our taxpayers who are already struggling the most. 

Taxpayers can engage with the IRS via online and mail, by telephone, and at Taxpayer Assistance Centers. 

Examining all these channels is important because each taxpayer’s situation is different. Some of our clients have Internet access and smartphones, but some of them don’t. Some of our clients 

don’t even have phones, and for those who do, they may have limited data plans. Taxpayer Assistance Centers are not in every city, 

and the ones that do exist are by appointment only. 

I have three recommendations that I believe will provide low-income taxpayers with greater accessibility to the IRS and allow the 

IRS to provide greater service for all taxpayers. 

First, our clients are often the subject of audits and collection activity. Both processes involve taxpayers sending in documentation, 

such as copies of their children’s birth certificates, Social Security 

cards, school records, and their own personal information. 

Taxpayers provide this information or documentation primarily 

through mail and fax, which presents several issues with security 

and financial issues. Taxpayers should have the ability to send information to the IRS electronically through secured portals and accounts. 

Next, when low-income taxpayers get notices from the IRS, they 

need options of talking with a representative over the phone or in 

person, so funding must be increased to hire additional representatives. Wait times for phone reps should be decreased, each TaxVerDate Sep 11 2014 13:29 Feb 22, 2019 Jkt 033658 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33658.XXX 33658
18 

payer Assistance Center should have more than one person available to taxpayers to talk with them in person, and there needs to 

be more of these centers in underserved areas. 

The Taxpayer Assistance Centers should begin accepting walk-in 

taxpayers again because taxpayers who do not have phones and 

who have an immediate need should not be turned away from 

these centers simply because they do not have an appointment. 

In addition, LITCs are instrumental in helping taxpayers navigate the IRS and resolve their issues. While Congress has continued to increase the overall funding available to LITC programs, the 

statutory cap of $100,000 for any one organization to receive has 

not been changed since the program began in 1998. 

Many organizations, like Georgia State University, receive the 

statutory cap, but have the capacity and interest to serve more taxpayers. For the last 26 years our clinic has served the taxpayers 

of Georgia. At any given time, we are working with hundreds of 

taxpayers, but we can do more. Where an organization like Georgia 

State University has experienced helping taxpayers and successfully operating a clinic, additional funding can help to set additional locations to service more taxpayers. 

No one wants to have an issue with the IRS. And, in my experience, our clients really do have a desire to resolve their issues 

properly. However, they need our help in order to do that. 

By improving online technology, providing more representatives 

for taxpayers to speak with over the telephone and in person, and 

increasing the statutory cap for organizations who are operating 

LITCs, the service can increase accessibility of their agency and enhance the overall experience for all taxpayers. 

Chairman Buchanan, Ranking Member Lewis, and Members of 

the Subcommittee, this concludes my statement. Thank you for the 

opportunity to share my views, and I welcome your questions. 

[The prepared statement of Ms. Lester follows:] 

19 


33658A.010

HEARING BEFORE THE 

COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON OVERSIGHT 

U.S. HOUSE OF REPRESENTATIVES 

"IRS REFORM: THE TAXPAYER 

EXPERIENCE" 

~,, GeorgiaStatc C 0 L LEG E 

Un1vers1ty. o F LAw 

Testimony of Tameka E. Lester, Esq. 

Associate Director 

Philip C. Cook Low-Income Taxpayer Clinic 

Georgia State University College of Law 

December 13, 2017 

Washington, D.C. 
20 


33658A.011

WRITTEN 

TESTIMONY OF 

TAMEKA E. LESTER, ESQ. 

ASSOCIATE DIRECTOR 

PHILIP C. COOK LOW-INCOME TAXPAYER CLINIC 

GEORGIA STATE UNIVERSITY COLLEGE OF LAW 

BEFORE THE 

HOUSE WAYS AND MEANS COMMITTEE 

SUBCOMMITTEE ON OVERSIGHT 

IRS REFORM: THE TAXPAYER EXPERIENCE 

DECEMBER 13, 2017 

Chairman Buchanan, Ranking Member Lewis, and Members of the 

Subcommittee, thank you for the opportunity to testify and discuss Internal 

Revenue Service (IRS) reform and the taxpayer experience. 

I. Low Income Taxpayer Clinics 

A. History 

Tax Clinics have been committed to working with the IRS and low income 

taxpayers for over 40 years. The first tax clinic began at Hofstra University 

School of Law in 197 41• Throughout the 1980s and 1990s, sixteen tax clinics 

began to surface at academic institutions and legal service organizations 

throughout the country2. Prior to the enactment of the Revenue Reform Act of 

1998, Congress learned more about the importance of the work of these initial 

clinics through hearings like this one and the testimony of Janet Spragens3 and 

Nina Olsen4

. The clinics were providing representation to low income taxpayers 

who had a controversy with the IRS, in addition to advocating for the resolution of 

systemic issues affecting all taxpayers. In order to expand the work of this 

collective group, funding was needed and ultimately granted through the 

implementation of Internal Revenue Code Section 7526. This legislation 

1 T. Keith Fogg, History of Low-Income Taxpayer Clinics, 5 (Villanova University 

Charles Widger School of Law, Working Paper Series, 2013). 

h ttps_:_Lfruwers.ssrn.comLsol3 LP-<l(:lers.cfm ?abstrac__t_U:I.=__2142144. 

2 Id. 

3 janet Spragens was the founding director of the American University Federal Tax 

Clinic in Washington, DC. The clinic is now named the janet R. Spragens Federal Tax 

Clinic in her memory. 4 Nina Olsen was the founding director of The Community Tax Law Project in 

Richmond, Virginia. In 2001, she was appointed to the position of National 

Taxpayer Advocate. 

2 
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33658A.012

provided for funding of up to $100,000 per year for "qualified Low Income 

Taxpayer Clinics,''5 birthing the Low Income Taxpayer Clinic (LITC) Program, 

which has grown to 134 clinics in 48 states and has changed the lives of millions 

of taxpayers. 

The Philip C. Cook Low-Income Taxpayer Clinic at Georgia State University 

College of Law was founded by Ronald W. Blasi in 1992 and provides 

controversy representation and educational resources to low income taxpayers in 

the state of Georgia. 

B. Mission 

The mission is three-fold: representation, education, and advocacy. 

Representation is the cornerstone of the LITC program. LITCs provide direct 

controversy representation to low income taxpayers. They assist taxpayers with 

interpreting notices, as well as navigating audits, examinations, and matters 

before the United States Tax Court. In doing so, LITCs ensure taxpayers pay no 

more than the correct amount of tax, which is a guarantee promised to taxpayers 

under the IRS's Taxpayer Bill of Rights6

. These rights have also been codified in 

Internal Revenue Code Section 78037

. Where factual and legal issues have 

been resolved and a taxpayer is unable to pay the tax due, clinics work with the 

taxpayer and the IRS to arrive at terms that satisfy the interests of both parties 

under the IRS Fresh Start program8, while making sure low income taxpayers are 

not financially crippled by tax liabilities they cannot ever hope to repay. In 

addition, LITCs assist taxpayers with lien and levy issues that affect their wages, 

s 26 USC 7526(c)(2) 6 The Taxpayer Bill of Rights outlines 10 fundamental rights taxpayers. Taxpayers 

should be aware of these rights when working with IRS functions. The rights are as 

followed: To be informed, to quality service, to pay no more than the correct 

amount of tax, to challenge the IRS's position and be heard, to appeal an IRS decision 

in an independent forum, to finality, to privacy, to confidentiality, to retain 

representation, and to a fair and just tax system. 

7 See 26 USC 7803(a)(3). 

a The IRS Fresh Start program, initiated in 2012, was designed to help taxpayers pay 

their liabilities and avoid getting federal tax liens. The program increased the 

amount of tax owed before the IRS would file a tax lien, extended the number of 

months a taxpayer could request an installment agreement (payment plan), and 

made the terms for accepting an offer in compromise more flexible. Specifically, the 

offer in compromise program allows taxpayers to settle their tax debt for less than 

they actually owe. Often times these liabilities cannot be repaid because the 

taxpayer has suffered negative events relating to their health or employment, and 

settling the tax liabilities for an amount that they can reasonably repay helps bring 

them back into compliance. This also makes it easier for them to find employment 

and gain access to credit, which hopefully makes them less reliant on government 

social programs in the future. 

3 
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33658A.013

deposit accounts and Social Security benefits, obtain frozen refunds, and claim 

innocent spouse relief.

9 Many LITC clients receive the Earned Income Tax 

Credit (EITC), the most effective federal anti-poverty program in the United 

States, so clinics do a great deal of work with the IRS's Examination and Appeals 

divisions to ensure that taxpayers are able to receive it. Since 2007, our clients at 

the Philip C. Cook Low-Income Taxpayer Clinic at Georgia State University 

College of Law have had approximately $20,272,000 at issue in controversies 

with the IRS. As a result of our clinic's efforts, those amounts were reduced to 

$1,898,172. This saved low income taxpayers $18,373,828. Since 2013, this 

has equated to $229,768 in actual money refunded to taxpayers. Since 2002, 

our clinic has represented 422 taxpayers and consulted with an additional 120. 

Of the $9,703,865 proposed in deficiencies by the IRS, our efforts helped to 

reduce this amount by $7,829,322, or by 81 percent. Our clinic, like many 

others, participates in the United States Tax Court Calendar Call program where 

we help taxpayers with cases before the Court and consult with pro se litigants to 

provide legal advice before trial. 

LITCs also have a vested interest in preventing future controversies from 

occurring. To that end, they spend time in the community educating taxpayers 

on their rights and responsibilities under the Internal Revenue Code. LITCs tailor 

their education and outreach plans to the specific needs of those they serve, and 

have conducted sessions on how to properly claim the EITC and other child 

related benefits. They also partner with other organizations, like the Volunteer 

Income Tax Assistance (VITA)10 program, providing tax law training to ensure 

volunteers acquire the knowledge necessary to pass their certification exam. 

Once certified, volunteers prepare tax returns for low to moderate income 

taxpayers at no cost. During 2015, LITCs have conducted more than 3,000 

educational sessions 11 . 

When LITCs come across systemic issues that impede a taxpayer's ability to 

9 Innocent spouse relief is a way for spouses and former spouses who filed joint 

income tax returns to seek relief from a tax liability. When spouses fil e joint tax 

returns, both become jointly and severally liable for the full tax due. Innocent 

spouse relief is granted in favor of a taxpayer who shows that only their spouse or 

former spouse should be held responsible for the tax. This typically happens where 

the taxpayer provides documentation to prove the spouse or former spouse failed to 

report income, reported income improperly or claimed improper deductions and 

credits without his knowledge. 

tO VITA and the LITC programs work together to provide low income taxpayers with 

a continuum of service. VITA completes current, and to a lesser extent, some past 

year returns. LITC assists taxpayers with controversies that arise from previous tax 

years. With the help of these programs, taxpayers can meet their fil ing 

requirements and work with a qualified representative to resolve any issues that 

may result from the return. 11 Low Income Taxpayer Clinic Program Report Uanuary 2017). 

4 
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33658A.014

receive fair and just resolutions for their issues, they work with the IRS to 

improve processes for all taxpayers. These issues can be substantive in nature. 

One example occurred when an LITC noticed that when taxpayers won 

judgments from their state and their pro bono attorneys recovered attorney's 

fees, the state was treating the attorney's fees as income to the taxpayer even 

though the taxpayer had no obligation to pay fees12• The LJTC applied for a 

Private Letter Ruling from the IRS, and the IRS gave the directive that the 

payment of attorney's fee were not taxable income to a client when he did not 

have an obligation to pay. The issues can also be more procedural in nature, 

such as how to correctly process a power of attorney. In these instances, the 

goal is to improve the system of tax administration for many taxpayers versus 

simply resolving an issue for one client. 

The Philip C. Cook Low-Income Taxpayer Clinic and other LJTCs accomplish this 

through the hard work of students, attorneys, accountants and volunteers who 

put in countless hours to ensure taxpayers receive quality representation, 

excellent service, and the best possible outcomes given the facts and 

circumstances of their cases. We also pride ourselves in providing an intimate 

training ground for future lawyers, which allows them to begin the process of 

developing effective lawyering skills essential for the profession. The American 

Bar Association (ABA) has approved the role LITCs provide in training law, 

business, and accounting students to provide more affordable tax controversy 

representation 13 . The representation's value is not simply to low income 

taxpayers, but to middle income taxpayers when the students graduate with the 

skills to provide this representation at a more affordable cost. This is particularly 

important in a time where legal employers are demanding more "practice-ready" 

law school graduates, the ABA is mandating more experiential education, and 

there are issues with access to justice. 

II. LITC Clients And How They Interact With The IRS 

The charge to LITCs has been clear. The objective is to assist low income 

taxpayers primarily in the controversy process. The premise is that the system of 

tax administration works best when individuals have access to representation, 

and access to representation should not be predicated solely on one's ability to 

pay an attorney or accountant. Ninety percent of our clients have income that 

falls below 250 percent of the federal poverty guidelines set by the United States 

Department of Health and Human Services each year14. For the 2017 calendar 

12 Low Income Taxpayer Clinic Program Report (January 2017). 13 American Bar Association, Report on the Future of Legal Services in the United 

States 

wwvy.americanbar.orgLcont~.n.tLQarn.bJ._Q_<!.Lilll3g_e_s.L.abanewu2..016t_L;S_Be_)2ort_Fti1_ 

WEa,pdf). 14 26 USC 7526(b)(l)(B); LITCs are permitted to take up to 10% of their cases 

outside of the income eligibility limits. These cases typically are accepted where 

there is a strong case for providing pro bono representation and the case would 

5 
24 


33658A.015

year, this equates to an individual earning less than $30,150 and a family of four 

earning less than $61,500. Many LITC clients are struggling to make ends meet 

and take care of their families with the income from low wage employment, 

Social Security benefits, unemployment, and the charity and generosity of family, 

friends, religious and sectarian non-profit organizations. In other cases, LITC 

clients are taxpayers who planned well and made fiscally sound financial 

decisions; however, they fell on hard times after losing a job or sustaining a life 

changing injury or sickness. LITC clients range from students, retirees, and 

disabled individuals, to veterans and other hard working taxpayers. Along with 

the challenges of poverty, lower literacy rates, physical and mental disabilities 

and little to no financial resources or tangible assets to leverage, everyday life 

can be extremely difficult. A great deal of their resources are spent on necessary 

living expenses like food and shelter; smart phones, Internet and the flexibility to 

leave work and wait on hold for hours to speak with a representative are luxuries 

they simply cannot afford. This makes it essential for the IRS to take an omnichannel approach 15 to continue providing avenues and opportunities for 

taxpayers to engage with the IRS online, over the phone, in person, and through 

the use of qualified representatives. 

Ill. Progress 

The IRS has made strides in improving its online accessibility. The newly 

redesigned website has a much sleeker layout, is easier to navigate, and is 

mobile friendly. For those taxpayers with access to the Internet and smart 

phones, this provides an excellent vehicle for obtaining information about various 

tax related topics and accessing IRS forms. The IRS has also made efforts to 

create online accounts, which allow taxpayers to access their balance, transcripts 

for the most recent years, and make payments 1617. While these steps are helpful 

in allowing the IRS to provide service in light of its increasingly shrinking budget, 

it has some negative impacts on low-income taxpayers. 

Improvements have also been made around the verification of income for 

purposes of claiming the Earned Income Tax Credit (EITC). This anti-poverty 

provide educational value for the students. We will not accept a case from a client 

who could afford private representation from the practicing bar. 15 Omni-channel approach is a sales term. It refers to a situation where there are 

various channels or touch points that provide users with seamless experiences 

across platforms. 16 View Your Account Information, h~/ Lwww.irs.gov LRaymentsfview-your-taxaccount (last visited on December 6, 2017). 

17 Due to the Equifax breach, the online account capabilities have been limited. "At 

this time, new user registration is only available for Online Payment Agreement, ePostcard, and FATCA Qualified Intermediary System. New users cannot register to 

access Get Transcript, View Your Account, Identity Protection PIN (IP PIN), or 

Secure Messaging. Returning users may still log in to all applications. We apologize 

for the inconvenience." 

6 
25 


33658A.016

initiative rewards low to moderate income individuals and families who are able 

to work and earn income in the form of a refundable tax credit. Where a taxpayer 

can satisfy the requirements for the credit, it can yield sizable refunds useful in 

bridging the income gap throughout the year. Due to the high potential for 

refunds, there is a great deal of abuse involving this credit. To curtail some of 

this abuse and ensure taxpayers are properly claiming the credit, Congress 

mandated in the PATH Act that the IRS must delay the release of refunds that 

involve the credit so they can verify the taxpayer's income. While delaying 

refunds can have adverse financial implications on low income taxpayers, 

verifying income upfront has provided benefits in the areas of identity theft and 

refund fraud. 

IV. Issues Encountered By Low Income Taxpayers When Engaging With 

TheiRS 

The primary ways for engaging with the IRS are online, by phone, and in person 

at Taxpayer Assistance Centers. Each of these touch points has advantages and 

disadvantages. Low income taxpayers also have access to representation 

services from LITCs; however, the program has limitations, too. 

The online services are available anytime, so taxpayers are not restricted by their 

work schedules or the IRS's hours of operation. As long as the taxpayer has 

access to the Internet, he can utilize the website and online account at a time 

and in a place that is most convenient for him. The disadvantage to this medium 

is that the taxpayer must have access to Internet or a smart phone, and many of 

our clients simply do not. 

Taxpayers have the option of contacting the IRS via phone. This allows them to 

speak directly to a representative about their tax account, and in some cases 

discuss how issues arise, make payment arrangements, and request transcripts 

be mailed to their home. This option works well once taxpayers are on the phone 

with the representative. The issue, however, is actually getting a representative 

on the phone. During the 2017 filing season, an IRS representative answered 

only 40 percent of the phone calls made into the "Installment Agreement/Balance 

Due" line. Wait times averaged 47 minutes, and in our experience in the LITCs, 

it has been longer18

. For taxpayers who may rely on being able to take care of 

personal calls during their lunch breaks or who have other restrictions that will 

not allow them to sit on the phone for hours to talk to a representative, this poses 

a serious issue. 

Face-to-face service is available for taxpayers at Taxpayer Assistance Centers 

(TACs)19. The IRS has 376 TACs, and there is at least one located in each state. 

IS National Taxpayer Advocat e Objectives Report To Co ngress, Fiscal Year 2018, 

Volume 1. 

t9 Contact Your LocallRS Offi ce, hJ!RS:/ Lww~irs.g.ovLheJR[CQJJ.tact_:~o ur lo~al-irs: 

office (last visited December 7, 2017). 

7 
26 


33658A.017

This provides taxpayers with an opportunity to meet with a representative in 

person to discuss their tax related issues. Taxpayers can also make payments 

or payment arrangements, request the assistance of the Taxpayer Advocate 

Service, pick up IRS forms and publications, and receive multilingual assistance 

in over 150 languages. Prior to 2016, the TACs were walk-in sites. Taxpayers 

could simply visit a center at their convenience and wait to speak with a 

representative; however, TACs now operate by appointment. Taxpayer must call 

the site to make an appointment in advance. The phone lines are open during 

certain hours. If a taxpayer misses that appointment or needs to reschedule, he 

must call back and make another appointment. In addition, those taxpayers who 

go to the TACs and are willing to wait are turned away without being assisted. 

While some taxpayers can get their questions answered and accomplish the 

same results over the phone, others may need immediate assistance for urgent 

matters where they are unable to make an appointment. Other taxpayers may 

be in such financial difficulty that they may not even have access to a phone. 

The inability to visit a site without an appointment to discuss tax related matters 

could adversely affect taxpayers who may otherwise be able to resolve their 

issues. 

LITCs provide a vehicle for obtaining low to no cost representation. This 

representation equalizes the playing field for low income taxpayers by allowing 

them to seek the representation of attorneys, accountants, and enrolled agents 

regardless of their ability to pay. Qualified organizations are able to apply for the 

LITC grant, receive up to $100,000 annually, and can use those funds to hire 

staff, rent space, and buy supplies essential in providing this service. While the 

number of LITC sites has increased significantly since 1998, so has the need for 

their assistance. The National Taxpayer Advocate has identified several 

underserved areas, one of which is Georgia. While existing LITCs in these 

underserved areas may have the capacity to take on more clients or set up other 

satellite locations, additional funding is needed to assist in those efforts. 

Because of the statutory cap of $100,000, the needs of many other taxpayers are 

going unmet. 

V. Opportunities For Reform 

Accessibility is key for low income taxpayers. They need the ability to contact 

and engage with the IRS online, over the phone, in person, and through the use 

of qualified representatives. When considering reform, it is important to make 

improvements to each of the customer facing channels as well as the availability 

for representation. 

Online services are helpful for taxpayers. Additional funding should be made 

available to improve online technology and the ability for taxpayers to 

communicate and transmit documents to the Service. Currently, taxpayers 

primarily provide documentation in response to IRS requests via mail or fax. 

Documentation sent by mail is sometimes lost in transit, potentially allowing 

sensitive information such as social security numbers to be compromised. 

8 
27 

f 


33658A.018

Faxing information can become expensive, as most companies charge a per 

page fee to send faxes and to scan. As technology improves, taxpayers should 

be permitted to transmit the requested information to the IRS electronically. This 

will be helpful for some taxpayers, but cannot be the primary touch point because 

the Internet, scanners and smart phones are not available to everyone. 

Funding should also be increased to hire additional representatives to answer 

phone calls and staff new and existing T ACs. These two mediums provide 

taxpayers with direct ways to contact IRS representatives. Both allow them to 

ask questions about tax issues, receive information about their specific tax 

account, and make payment arrangements. Since 2011 , the IRS has reduced 

the number of TACs from 401 to 376. Twenty-two of those sites do not have 

actual staff at the location, and 95 TACs have only one person staffing the 

center2°. For taxpayers not in a city with a TAC, the phone is their lifeline to the 

Service. Since there are only 376 TACs, this leaves quite a few areas 

underserved and groups of taxpayers who have no choice but to call the IRS. 

For those cities with TACs, additional representatives would ensure more 

taxpayers are serviced. In addition, the TACs should begin accepting walk-in 

taxpayers again. 

LITCs are instrumental in helping taxpayers navigate these avenues and the tax 

administration system. While Congress has continued to increase the overall 

funding available to the LITC program, it has not revisited the statutory cap, 

which dictates how much funding any one organization can receive. Many 

organizations, such as Georgia State University, have the capacity and interest in 

serving more taxpayers in other parts of the state. For 26 years the Philip C. 

Cook Low Income Taxpayer Clinic at Georgia State University has serviced the 

state of Georgia. The majority of our clients are in the Atlanta metropolitan area; 

however, we could provide satellite campuses in other parts of the state. We 

simply need additional funding to equip those locations with attorneys, 

accountants, or enrolled agents. We currently receive the statutory cap of 

$100,000; however, if this amount were increased, this funding could be possible 

not only for Georgia but other underserved areas in the country. 

VI. Conclusion 

Chairman Buchanan, Ranking Member Lewis, and Members of the 

Subcommittee that concludes my statement. It is important to recognize the 

needs of low income taxpayers when considering IRS reform. Thank you for the 

opportunity to share my views. I would be happy to answer any questions. 

2o National Taxpayer Advocate 2016 Annual Report To Congress, Special Focus (IRS 

Future State: The National Taxpayer Advocate's Vision For a Taxpayer-Centric 21st 

Century Tax Administration). 

9 
28 

Chairman BUCHANAN. Thank you. 

Ms. Ron, you are recognized. 

STATEMENT OF KARINA RON, DIRECTOR, CENTER FOR 

FINANCIAL STABILITY, UNITED WAY OF MIAMI-DADE 

Ms. RON. Good morning, Chairman Buchanan, Ranking Member 

Lewis, and Members of the Committee. Thank you so much for the 

opportunity to be here and to testify today. I will be mainly focusing on experiences through the VITA program. 

The United Way focuses on lasting solutions that go beyond charity because financially stable people are more likely to access quality healthcare, provide a good education for their children, and contribute to their local economies. 

A key component of success in building financial stability is ensuring that hard-working families secure and keep the tax credits 

they are eligible for through free high-quality tax preparation and 

filing services, particularly via the Volunteer Income Tax Assistance program, or VITA, as we know it. 

Volunteer preparers are certified by the IRS and are required to 

maintain the highest standards of ethical conduct and service. This 

certification and a very, very disciplined approach in service delivery have resulted in accuracy ratings among the highest of all tax 

returns filed. According to a 2016 report, for example, the VITA 

program experienced a 94 percent accuracy rating for prepared returns, including returns with earned-income tax credits. 

VITA is a very successful public-private partnership generating 

a strong return on investment. With a modest Federal investment, 

matched in local communities, VITA sites prepared millions of returns, bringing back $1.9 billion to VITA clients in communities 

across the country. 

VITA helps hard-working Americans meet their tax obligations 

while claiming the full amount of any refunds for which they are 

eligible. Often clients qualify for the EITC and child tax credit, 

which are some of our Nation’s most effective anti-poverty tools. 

Only those who work are eligible, and in 2015 these critical prowork tax credits lifted 9.8 million Americans out of poverty, including 5 million children. 

Fundamentally, VITA supports those who cannot afford professional tax services and need assistance to accurately complete their 

taxes. Even beyond tax filing, many programs leverage the touch 

point that VITA provides to offer integrated service delivery, like 

counseling and education, and to connect clients with programs 

that foster proper financial stewardship and even grow savings. 

The Miami-Dade VITA Coalition, for example, provides access to 

financial capability services that range from financial education 

and one-on-one financial coaching to incentivized savings programs 

and even onsite bank account openings in partnership with its local 

banking access coalition, known as Bank On Miami. 

Since its creation, the VITA program has been an incredibly successful public-private partnership throughout the country. The resources that the IRS provides through this matching grant are only 

a portion of what organizations use to operate VITA sites. 

While the tax returns are prepared by volunteers, sponsoring 

community organizations contribute significant resources to recruit 

29 

and train the volunteers to IRS standards, supervise the volunteers 

to ensure accuracy, provide office space and computers for electronic filing, and conduct outreach to community members. 

Currently, 380 United Ways fund, operate, or support VITA programs, contributing financial resources, personnel, and in-kind donations. As a network, the United Way invests $17.4 million in 

VITA and other filing assistance programs. Millions more are invested across the country from other nonprofits and community 

service agencies, though these resources are stretched very tight 

and the reality is that communities often lack the resources to 

meet demand. 

And demand for VITA services only continues to grow. Given the 

significant return on investment and the successful partnership, we 

recommend a boost in funding for this program and for the program to be permanently authorized as called for in the bipartisan 

VITA Permanence Act, sponsored by Representatives Curbelo and 

Davis. 

Thank you, once again, for the opportunity. It is a pleasure to be 

here. 

[The prepared statement of Ms. Ron follows:] 

30 


33658A.019

Committee on Ways and Means, Oversight Subcommittee 

Witness Written Testimony 

Perspective-Director Center for Financial Stability 

United Way of Miami-Dade 

The whole community benefits when working people can turn their financial tightrope into a 

stable pathway to success. That' s why United Way focuses on lasting solutions that go beyond 

charity, because financially stable people are more likely to have access to quality healthcare, 

provide a good education for their children, and contribute to their local economies. A key 

component of success in building financial stability is ensuring hardworking families secure and 

keep the tax credits they are eligible for through free, high-quality tax preparation and filing 

services. 

Through the Community Volunteer Income Tax Assistance Program (VITA), volunteers become 

certified tax preparers and provide qualifying individuals and families with free, reliable 

assistance in filing federal tax returns. Most taxpayers utilizing VITA earn an annual household 

income of less than $54,000 and come from traditionally hard-to-reach and underserved 

communities, including people with disabilities, the elderly, and Native Americans. Additionally, 

many programs offer services for taxpayers with English as a second language. 

Volunteer preparers undergo training well before tax season begins, and are certified by the 

Internal Revenue Service (IRS). In an effort to establish and maintain trust from the public, VITA 

volunteers are required to maintain t he highest standards of ethical conduct and service. 

Volunteers have access to national and local resources that help them complete IRS-required 

certifications, including an online e-learning system and oftentimes in-person community 

trainings. All volunteers must agree to adhere to IRS Volunteer Standards of Conduct, and 

proceed to additional training according to their specific role within VITA. Those preparing tax 

returns or overseeing sites for example, typically proceed to Basic or Advanced tax law 

certification as well as specialty courses including one that addresses the tax needs of military 

service members. Site operations are also managed according to detailed IRS Quality Site 

Requirements, including such practices as peer-to-peer quality reviews of every prepared 

return before filing. This certification and disciplined approach has resulted in accuracy ratings 

among the highest of all tax returns filed. 

VITA is a successful public-private partnership, generating a strong return on investment. With 

a modest federal investment of $15 million in FY2017, matched in local communities, close to 

4,000 VITA sites prepared about 1.3 million returns for taxpayers with an average adjusted 

gross income of $25,000 in 2017. Volunteers helped returned $1.9 billion to VITA clients and 

communities in all SO states and Washington, D.C. In Florida, 268 sites prepared 75,000 returns, 

bringing back $108 million to Main Street economies throughout the state. In Miami Dade 
31 


33658A.020

County specifically, there were $13 million in returns--$5 million of which was realized through 

the Earned Income Tax Credit (EITC). 

VITA helps hardworking Americans meet t heir tax obligations while claiming the full amount of 

any refunds for which they are eligible. Often clients qualify for the EITC and Child Tax Creditsome of our nation's most effective anti-poverty tools. Only those who work are eligible, and in 

2015 these critical pro-work tax credits lifted 9.8 million Americans out of poverty, including 5 

million children. 600,000 Floridians were lifted out of poverty by the EITC and CTC, including 

311,000 children, each year, on average, during 2011 to 2013. Further, research shows that 

EITC and CTC recipients use their returns for asset building expenditures like reliable 

transportation to work, groceries, and quality childcare. 

One in five EITC eligible workers don't claim the credit however, and the complex nature of the 

EITC - wisely structured to incentivize and reward work -can make it challenging to navigate, 

resulting in some unintentional error in claims. However, according to a 2016 Treasury 

Inspector General Report for Tax Administration (TIGTA) report- the VITA program experienced 

a 94% accuracy rating1 for prepared returns-including returns with EITC claims. To put that in 

perspective, in 2014 the IRS National Taxpayer Advocate stated that unenrolled tax preparers 

were found to have errors in 49% of the EITC returns they filed2

• We cannot emphasize enough 

-tax returns filed by VITA volunteers have the highest accuracy rate for EITC filing. VITA is a 

solution for addressing error rates on EITC, ensuring government resources are accurately 

delivered to those working and eligible. 

Fundamentally, VITA supports those who cannot afford professional tax services and need 

assistance to accurately complete their taxes. One VITA client may be a 20 year-old single 

parent working as a full-time cashier at the local fish market, completely new to tax 

responsibilities and possible credits, and worried about whether or not they will owe taxes on 

top of tax preparation fees. Another VITA client may be a recently divorced mother of 3, 

struggling to make sense of her household finances with her 40-year old marriage ending, and 

anxious because someone told her she would owe the IRS taxes on her alimony this year. Yet 

another VITA client may be a SO-year old father juggling 3 jobs to provide for his family, using 

credit cards to help with rising housing, transportation, and health care costs, and no longer 

able to afford his local tax preparer. These clients frequently leave their VITA sites with 

tremendous appreciation for the guidance and support they received, often surprised at the 

level of professionalism and transparency demonstrated by their tax preparers, having a better 

understanding of their tax returns, and expressing a new level of confidence in their financial 

next steps- whether it involves a tax refund or a tax payment. 

1

Page 8, Quality Statistical Sample Return Review Accuracy Rate 

httpsjfwww.t easury.gov/tigta/aud tr~ortsj2016reports/20164004Sfr.pdf 

' Financial Services and General Government Appropriations Hearing, 2014 

https:/1 archive .orgj deta ils/gov .gj)o. fdsys.CH RG-113hhrg88602 

2 
32 


33658A.021

In diverse communities like Miami-Dade, tax time offers a particularly powerful opportunity to 

help those with a limited understanding of formal financial structures and systems in the United 

States, including tax law. Of the more than 10,000 taxpayers served by the Miami-Dade VITA 

Coalition for example, more than 90% are low income filers and over 70% have limited English 

proficiency. In addition, there is a high concentration of new citizens and recent immigrants 

who need support with Individual Taxpayer Identification Numbers, and other matters in order 

to file their taxes. Given their linguistic, cultural, educational, and financial barriers, these 

populations are especially vulnerable to predatory services that too often result in significant 

financial loss, IRS rejections and audits, and fraud or identify theft. 

For those who make up Miami's vibrant entrepreneurial economy, there is even an additional 

layer of complexity and need for VITA services. Starting and growing a microbusiness is the 

most promising path to financial stability for many low-income households, and they dedicate 

themselves to their start-up or mom-and-pop business despite an often limited grasp of 

financial management tools and systems. Each tax season then, many self-employed taxpayers 

find themselves needing guidance but unable to afford hundreds of dollars in tax preparation 

fees in order to complete a Schedule C. VITA sites like those in the Miami-Dade VITA Coalition 

recognize this need and help self-employed taxpayers get organized, file accurately, and even 

connect to other free small business services in the community. 

Beyond tax filing, many programs leverage the touch point with low and moderate-income 

workers that VITA provides to offer integrated service delivery. When VITA clients have 

completed the filing process, volunteers and financial stability specialists are on hand to 

provide counseling and education, and to connect clients with programs that foster proper 

financial stewardship and grow savings. The Miami-Dade VITA Coalition for example, provides 

access to financial capability services ranging from financial education and one-on-one financial 

coaching, to incentivized savings programs and onsite bank account openings in partnership 

with its local banking access coalition, Bank On Miami. 

Each year, VITA cl ients recognize the value and impact of VITA, and t hey help spread the word 

in their communities. At some Miami-Dade VITA sites for example, well over 40% of clients 

have come to VITA through a family or friend referral. 

Since its creation, the VITA program has been an incredibly successful public-private 

partnership throughout the country. The resources the IRS provides through this matching 

grant program - $1S million in FY2017 - are only a portion of what organizations use to 

operate VITA sites. While the tax returns are prepared by volunteers, sponsoring community 

organizations contribute significant resources to recruit and train the volunteers to IRS 

standards, supervise the volunteers to ensure accuracy, provide office space and computers for 

electronic filing, and conduct outreach to community members. Currently, 380 United Ways 

fund, operate, or support VITA programs-contributing financial resources, personnel, and inkind donations. As a network, United Way invests $17.4 million in VITA and other filing 

assistance programs. Millions more are invested across the country from other non profits and 

3 
33 

f 


33658A.022

community service agencies, t hough resources are stretched tight and the reality is t hat 

communities often lack the resources to meet demand. 

And demand for VITA services only continues to grow. The IRS has determined that while 1.3 

million presently access free tax assistance, approximately 19 million would do so if it were 

readily available. Given the significant return on invest ment in t his successful partnership, we 

recommend a boost in funding for this program, and for the program to be permanently 

authorized- as called for in the bipartisan VITA Permanence Act, sponsored by Representatives 

Curbelo and Davis. 

4 
34 

Chairman BUCHANAN. Thank you. 

Ms. Lee-Villanueva, you are recognized. 

STATEMENT OF LYNNETTE LEE-VILLANUEVA, 

VICE PRESIDENT, TAX-AIDE, AARP FOUNDATION 

Ms. LEE-VILLANUEVA. Thank you, Chairman Buchanan and 

Ranking Member Lewis and Members of the Oversight Subcommittee, for the invitation to testify today on ‘‘The Taxpayer Experience with the Internal Revenue Service.’’ I am Lynnette LeeVillanueva, Vice President for AARP Foundation Tax-Aide. We appreciate the opportunity to share with you information about the 

program and our service to the American taxpayer. 

AARP Foundation is the Nation’s largest volunteer-run tax assistance and preparation program administered in conjunction with 

the Internal Revenue Service. It started in 1968 with just four volunteers at one site. Tax-Aide relies on volunteers who make a difference in their communities by assisting many older, lower-income 

taxpayers who might otherwise miss out on important credits and 

deductions. 

Today, as we approach our 50th anniversary, nearly 35,000 volunteers in all 50 States and the District of Columbia serve in approximately 5,000 Tax-Aide sites from February 1 to mid-April. 

In 2017, the AARP Foundation volunteers helped 2.5 million people file their Federal and State tax returns, including 1.5 million 

Federal returns. In 2017, Tax-Aide clients, who have an average 

adjusted gross income of around $27,000, received $1.3 billion in 

income tax refunds and another $222 million in earned-income tax 

credits. 

Not only is Tax-Aide the producer of about one-half of all volunteer prepared returns, but our research also indicates that the full 

Tax-Aide effort ranks fourth on the list of all tax-preparing entities, 

behind only the top three national paid preparer firms. 

AARP Foundation Tax-Aide is consistently well regarded by taxpayers. According to the 2017 AARP Foundation Tax-Aide Satisfaction Survey, 96 percent of respondents stated that they were very 

satisfied with our service. Among those who used Tax-Aide in previous years, 92 percent said they returned to the program because 

they are satisfied with the quality of service. 

AARP Foundation provides traditional face-to-face assistance 

service in neighborhood locations, such as libraries, malls, banks, 

community centers, and senior centers. Local partners donate their 

space rent free and sometimes help with administrative activities 

and program promotion. We work hard to reach out to those who 

are 50 or older, are homebound or disabled, or live in diverse communities in underserved and rural and urban areas. 

Tax-Aide sites are staffed by volunteers who serve as counselors 

who are trained to prepare and quality review tax returns and 

client facilitators who greet taxpayers and help them with their 

paperwork. Other volunteers include translators, technologists, administrators, and site leaders who provide equally important services. 

Volunteers, on average, spend about 6 years in the same volunteer position, and many of our volunteers have stayed with the program for more than 20 years. AARP Foundation Tax-Aide volunVerDate Sep 11 2014 13:29 Feb 22, 2019 Jkt 033658 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33658.XXX 33658
35 

teers must train and pass an IRS certification test every year in 

order to serve taxpayers. The program’s training commitment is 

about 3 to 5 days of in-person instruction every year. 

Tax-Aide seeks to assist taxpayers in ways that go beyond inperson assistance. A site locator tool helps taxpayers find locations 

of open Tax-Aide sites, and a call center allows individuals to contact us with questions. 

In addition, Tax-Aide provides online tax assistance, a web-based 

tool available year-round where taxpayers can find answers to frequently asked questions, as well as submit their own questions to 

receive answers about tax preparation. 

Tax-Aide also provides access to My Free Taxes, an option for 

taxpayers interested in filing their own returns electronically. In 

the off-season, taxpayers can contact Tax-Aide if they need help 

with an amended return or have questions about letters from the 

IRS. 

AARP Foundation Tax-Aide continues to strive to provide accurate returns and compassionate service to those who need it most 

by helping them preserve as much of their existing income as possible. 

We appreciate the Committee’s efforts today to better understand 

the taxpayer’s filing experience. We stand ready to assist and serve 

as a resource and partner for the Committee to improve the tax filing experience for everyone. 

Thank you for the time to testify. 

[The prepared statement of Ms. Lee-Villanueva follows:] 

36 


33658A.023

Real Possibilities 

STATEMENT FOR THE RECORD 

SUBMITTED TO THE 

HOUSE WAYS AND MEANS 

OVERSIGHT SUBCOMMITTEE 

Hearing on the Taxpayer Experience with the Internal Revenue Service 

December 13, 2017 

AARP Foundation 

601 E Street, N.W. 

WASHINGTON, D. C. 20049 

Submitted By 

Lynnette Lee Villanueva 

Vice President 

AARP Foundation 

For further information, contact: 

Name: Lynnette Lee-Villanueva 

Number: 202-434-6001 

Department: Programs. AARP Foundation 
37 


33658A.024

AARP Foundation thanks Chairman Buchanan, Ranking Member Lewis and members of the 

Oversight Subcommittee for the invitation to testify today on the "Taxpayer Experience with the 

Internal Revenue Service." We appreciate the opportunity to share with you information about 

AARP Foundation Tax-Aide and our service to the American taxpayer. I am Lynnette LeeVillanueva, Vice President and National Director for the program. 

AARP Foundation works to end senior poverty by helping vulnerable older adults build economic 

opportunity and social connections. As AARP's charitable affiliate, we serve AARP members and 

nonmembers alike. Bolstered by vigorous legal advocacy, we spark bold, innovations solutions that 

foster resilience, strengthen communities and restore hope. 

Helping older adults preserve as much of their existing income as possible is an important part of 

our mission to increase economic opportunity. AARP Foundation Tax-Aide is one of the ways we 

accomplish that. It's the nation's largest free, volunteer-run tax assistance and preparation 

program, administered in conjunction with the Internal Revenue Service. Started in 1968 with just 

four volunteers at one site, Tax-Aide relies on volunteers, who make a difference in their 

communities by assisting many older, lower-income taxpayers who might otherwise miss out on 

important credits and deductions. 

Today, as we approach our SO'h anniversary, nearly 35,000 volunteers in aliSO states and the 

District of Columbia serve in approximately 5,000 Tax-Aide sites from February 1 to mid-April. 

AARP Foundation Tax-Aide volunteers are trained and IRS-certified each year to ensure they know 

about and understand the latest changes and additions to the U.S. Tax Code. 

In 2017, AARP Foundation Tax-Aide volunteers helped 2.5 million people navigate complicated tax 

codes, ensure proper credits and deductions, and file their federal and state tax returns. Taxpayers 

who used AARP Foundation Tax-Aide received $1.37 billion in income tax refunds and more than 

$222 million in Earned Income Tax Credits (EITCs). This year, individuals served by Tax-Aide had an 

average Adjusted Gross Income (AGI) of about $27,000. 

The number of federal returns prepared by AARP Foundation Tax-Aide sites in tax season 2017 in 

all 50 states and Washington DC exceeded 1.5 million, with a 98% e-file rate. Not only is Tax-Aide 

the producer of about one-half of all volunteer prepared returns, but our research also indicates 

that the full Tax-Aide effort ranks fourth on the list of all tax preparing entities, behind only the 

top three national paid preparer firms. 

Taxpayer Program Feedback 

AARP Foundation Tax-Aide is consistently well regarded by taxpayers. According to the 2017 AARP 

Foundation Taxpayer Satisfaction Survey, the vast majority of respondents - 96 percent - stated 

that they were very satisfied with the service. Nearly all Tax-Aide respondents reported that the 

overall quality of service they received was excellent (87 percent) or good (10 percent). In fact, 

among those who used AARP Foundation Tax-Aide in previous years, 92 percent say that they 

returned to AARP Foundation Tax - Aide because they are satisfied with the quality of service. 

Program Funding 
38 


33658A.025

With funding support from the Tax Counseling for the Elderly (TCE) and Volunteer Income Tax 

Assistance (VITA) grants, as well as from AARP Foundation, AARP Foundation Tax-Aide has assisted 

more than 50 million people since the program began. 

The Tax Counseling for the Elderly program offers free tax help to individuals who are age 60 or 

older. The IRS and eligible organizations enter into cooperative grant agreement s to provide tax 

assistance to elderly taxpayers. The funds provided by the IRS are used by organizations to 

reimburse volunteers for their out-of-pocket expenses -including transportation other expenses 

incurred by them in providing tax counseling assistance at locations convenient to the taxpayers. 

The Volunteer Income Tax Assistance program offers free tax help to people who generally make 

$54,000 or less, people with disabilities and taxpayers who speak limited English who need 

assistance in preparing their own tax returns. 

Program Structure and Scope 

AARP Foundation Tax- Aide provides traditional face-to-face tax assistance service in 

neighborhood locations such as libraries, malls, banks, community centers, and senior centers. 

Space for tax preparation is provided rent-free thanks to local partners that donate their space, 

and, in some cases, they also help with administrative activities and program promotion. 

Taxpayers have access to Tax-Aide locations that are open by appointment only, as walk-in sites, 

or a combination of both. 

Tax-Aide sites are staffed by volunteers mainly consisting of Counselors and Client Facilitators. 

Counselors are trained to prepare and quality-review tax returns, and Client Facilitators greet 

taxpayers and help them with their paperwork. Other volunteers provide equally Important 

activities; they include translators, technologists, administrators, and site leaders, among others. 

Volunteers on average spend about six years in the same volunteer position and many of our 

volunteers have stayed with the program for more than 20 years. 

Administrat ive support and policy guidance are provided by 15 professional program staff based in 

Washington, DC. A network of AARP state offices around the country assist s volunteers with local 

recruitment and promotion support to reach target audiences, including those age 50 and older, 

multicultural populations, homebound and disabled, to name a few. We also have initiatives in 

place to serve diverse communities in underserved rural and urban areas. 

In addition, AARP Foundation Tax-Aide staff and volunteers work closely with the IRS, specifically 

with the Stakeholder Partnerships, Education & Communication (SPEC) team, which is the 

outreach and education arm of the Wage and Investment Division of the IRS. We work with SPEC's 

national relationship manager, and have built strong local relationships with SPEC Territory 

Managers nationwide. 

Training and Scope 

AARP Foundation Tax-Aide volunteers must train and test every year in order to serve taxpayers. 

Volunteers assisting taxpayers take Standards of Conduct training provided by the IRS, and must 
39 

f 


33658A.026

achieve IRS certification at the advanced level. The program's training commitment is 3 to 5 days 

of in-person instruction, depending on the experience of the Counselor. State tax law training is 

also provided by local volunteers. 

Volunteers are trained within a nationally determined scope of work. Tax-Aide and the IRS review 

what will be in scope for tax preparation each year. Examples of areas in scope include typical 

items such as wages, interest, retirement income, Social Security benefits, and IRA contributions, 

and many other items. Examples of areas out of scope include self-employment expenses that 

exceed $25,000, and rental income. (See the addendum for the 2018 tax season AARP Foundation 

Tax-Aide scope document.) 

Training for specific areas of scope provides volunteers with a clear understanding of what they 

can and cannot prepare; adhering to scope also protects our volunteers via the Volunteer 

Protection Act of 1997, which aims to promote volunteerism by limiting, and in many cases 

completely eliminating, a volunteer's liability when acting for nonprofit organizations. 

Taxpayer Resources 

In addition to in-person assistance, AARP Foundation Tax-Aide seeks to be responsive to taxpayers 

through various resources. Each season in mid-January we open the Tax-Aide Site locator Tool 

(aarp.org/FindTaxHelp) providing an easy and efficient way for taxpayers to find information and 

locations of open Tax-Aide sites. AARP Foundation Tax-Aide also employs a call center so taxpayers 

and other interested parties can contact us with questions. In addition, Tax-Aide provides Online 

Tax Assistance, a web-based tool available year-round, where taxpayers can find answers to 

frequently asked questions, as well as submit their own questions and receive prompt answers 

about tax preparation. Tax-Aide also provides access to "My Free Taxes," an option for taxpayers 

interested in filing their own returns electronically. 

In the off-season, taxpayers can contact Tax-Aide if they need help with an amended return or 

have questions about letters from the IRS. AARP Foundation Tax-Aide has a limited number of sites 

open after the tax season has ended to help taxpayers; volunteers also make themselves available 

to help on a one-to-one basis, as needed; and, we may recommend that taxpayers get help from 

the IRS Taxpayer Advocate Service (an independent organization w ithin the IRS to protect taxpayer 

rights and assist with problems taxpayers can't resolve on their own). 

Closing 

AARP Foundation Tax-Aide continues to strive to provide accurate returns and compassionate 

service to those who need it most by helping them preserve as much of their existing income as 

possible. We appreciate the Committee's efforts today to better understand the taxpayers' tax 

filing experience. We stand ready to serve as a resource and partner for the Committee to improve 

the tax filing experience for everyone. 
40 

Chairman BUCHANAN. Thank you for your excellent testimony. 

We will now proceed to the questions-and-answers session. In 

keeping with my past precedent, I will hold my questions until the 

end. 

I will now recognize the gentlelady from Indiana, Mrs. Walorski. 

Mrs. WALORSKI. Thank you, Mr. Chairman. 

Thank you, ladies, for being here and sharing your expertise. I 

am hoping you have an answer to my question. So stay tuned. 

The hearing is called the Taxpayer Experience, so I am going to 

let some of my constituents do the talking on their experience with 

the IRS. 

An 80-year-old farmer in my district received a letter saying that 

even though the IRS had found nothing wrong with their taxes, he 

and his wife had been selected for a random statistical audit. Even 

though the audit only took a few days, they had to spend $1,900 

defending themselves and waste countless hours pulling together 

documents and traveling to the CPA’s office to meet with the auditor. All the while, they felt the burden was on them to prove their 

innocence rather than the auditor proving guilt. 

Or take another family farm in my district that received an audit 

notification in September of 2012. The auditor sent by the IRS had 

no background in agriculture, didn’t know the difference between 

a combine and a tractor. Things only got worse when their CPA offended the auditor. After that, they were at her mercy. She initially said they owed over $600,000. After spending over $120,000 and 4 years fighting that determination, the bill was reduced to $100,000. They could have kept on fighting but didn’t 

want to keep spending more time and more money. 

These are only two stories of countless in my district, and I am 

assuming probably countless in your experience as well. I know 

there is plenty more where that came from. 

It is easy to add up the time and the money spent, but it is 

harder to quantify stress. 

Consider this. That 80-year-old farmer I just told you about had 

a heart condition and was told by doctors to avoid stress. How exactly can he do that while sitting across from an IRS auditor when 

he did nothing wrong. 

His family farm? The husband died during the audit, and the 

wife pleaded for a little extra time. She didn’t even get a response. 

My first question for all of you is if any of you are familiar with 

this kind of statistical audit encountered in the first story. If so, 

what sort of costs are imposed on taxpayers subject to one? 

I see, Ms. MacMillan, you are shaking your head. I am guessing 

you have an answer. 

Ms. MACMILLAN. Yes, I have had a few clients go through 

these audits. And I know it is a matter of trying to balance fairness 

with getting the information the IRS needs. 

The National Research Project audits that were started maybe 

12 years ago are these extremely extensive audits, and they use 

that information to develop better audit technique selection, or selection technique, for future audits. 

So I have been through a few of them and they are grueling. I 

don’t know that the IRS can get that data elsewhere. But, yes, it 

is extremely expensive to go through one of those, and they often 

41 

result in no change. But they do go through horrendous amounts 

of documentation, asking everything from, what about that piece of 

property you owned in Colorado? And they are like, we sold that 

24 years ago. 

So they have gone to their third party or their outside sources 

to figure out what they should be looking at, but then the data is 

all over the place. It could be refined. 

Mrs. WALORSKI. I appreciate it. 

Ms. Lester, do you have some input? 

Ms. LESTER. Absolutely. We see this a lot, even with low-income 

taxpayers having to go through audits. The way we like to describe 

it to taxpayers is, when you fill out a tax return, you are on the 

honor system, unfortunately. And so when the IRS comes back, 

they want documentation to support the things that you have 

claimed on the return. 

And so that is why it is so important to encourage taxpayers to 

collect documentation as they go along and to retain that documentation for an extended period of time just in case they are subject to an audit in later years. 

We think that is why the work we do in the Low-Income Taxpayer Clinic is important because we are a training ground for students, law students, business students, accountants. So not only 

are we providing a valuable service to low-income taxpayers, but 

we are training students who will later be able to use their skills 

to provide affordable services for taxpayers who can actually afford 

to pay but don’t want to pay astronomical fees in order to gain representation. 

Mrs. WALORSKI. I appreciate it. 

Do any of you have suggestions or recommendations based upon 

everything that you have seen on how to speed up this process, 

other than just educating the taxpayer to keep their documents? Is 

there anything else that you see in troubleshooting this that would 

actually speed up the process? 

Ms. LESTER. Yeah, I can add to that. One of the recommendations that we have made is to improve the ability for taxpayers to 

correspond with the IRS in an online fashion. 

Because right now what happens is taxpayers are pulling together all this documentation. Then they are having to mail it to 

the IRS. Then it has to be routed to the correct area. And so that 

leaves a lot of chance for things to happen with documentation, for 

it to be misrouted, for it to be lost. 

And so we think that with improved online capabilities, taxpayers can send the information directly to the Service and that 

can help speed up the process. 

Mrs. WALORSKI. Great. I appreciate it. Thank you, all of you, 

for your expertise. 

Mr. Chairman, I yield back. 

Chairman BUCHANAN. Thank you. 

I now recognize the gentleman from Georgia, Ranking Member 

Lewis. 

Mr. LEWIS. Thank you very much, Mr. Chairman. 

Mr. Chairman, you know, it is quite unusual. I have been on this 

Committee and the Subcommittee for some time. But I think this 

42 

is my first time seeing an all-women panel. And I guess you can 

say that is major progress. 

Chairman BUCHANAN. It is the future. 

Mr. LEWIS. It is the future. I think you are right. I agree with 

you, Mr. Chairman. 

I have been saying to some that I think women are coming into 

their own, and I think the days and years to come will be the days 

and years of women. So thank you. 

Ms. Lester, thank you again for being here. You know, when 

writing tax laws too fast and sometimes trying to implement laws 

you make mistakes and there is confusion for taxpayers and the 

IRS. 

We have this new unbelievable tax legislation. Do you have anything, or do any of you have anything to say, of what could happen, 

or might not happen, or what time should you get the information 

to inform? Any of you could respond. 

Ms. Lester, do you want to go first? 

Ms. LESTER. Can you repeat your question? 

Ms. MACMILLAN. Could you repeat the question? I am sorry. 

Mr. LEWIS. You know we have a big tax bill? 

Ms. MACMILLAN. Yes, I am aware of that. 

Mr. LEWIS. Right? You have been reading about it? 

Ms. MACMILLAN. Right. Yes. 

Ms. LESTER. Yes. 

Mr. LEWIS. Tax reform is coming down the pipe. So are you concerned that there will be some confusion on the part of the IRS or 

the taxpayers that you serve? 

Ms. MACMILLAN. I don’t know that I am confused about the 

IRS. There will be costs of the IRS to implement major changes to 

the Tax Code. That is clear. I don’t know if I can address anything 

else about it. 

I can tell you that middle-class taxpayers on the West Coast are 

at a different income level than middle-class taxpayers in the Midwest. So there is going to be a discrepancy. 

Mr. LEWIS. There are certain things that affect the taxpayers on 

the West Coast that may not affect those in the Southeast? 

Ms. MACMILLAN. Well, obviously, on both coasts, the higher income—someone in the middle class on the West Coast would look 

like they were a wealthy person if they lived in the Midwest. So 

I am unsure of how it is going to shake out. But the explanation 

that this helps middle-class taxpayers may not help many of my 

clients. 

Mr. LEWIS. Ms. Lester, do you want to respond? 

Ms. LESTER. Sure. I have looked at some of the details of the 

tax bill, and one of the things that I know will probably concern 

low-income taxpayers is just understanding the differences and understanding the changes. 

It is already very difficult for taxpayers to understand their 

rights and responsibilities under the Internal Revenue Code, and 

it seems like, once they kind of begin to understand that, the laws 

change. 

And so some of the things that we are looking at that we think 

will affect them is the exemption amount going away for lowincome taxpayers that have multiple children. This actually deVerDate Sep 11 2014 13:29 Feb 22, 2019 Jkt 033658 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33658.XXX 33658
43 

creases their taxable income. And so with that going away, their 

taxable income could possibly increase. Although the standard deduction is increasing, that could still have an effect on them. 

But there are some things that could be helpful, such as the child 

tax credit being increased. So we see there being some benefits and 

also some disadvantages that would affect our taxpayers. 

Mr. LEWIS. Thank you. 

Ms. RON. If I could add, this is definitely not my area of expertise, but I would say that from the perspective of the population 

that we serve, there are definitely concerns with the tax reform 

coming up. Definitely, the United Way, I think, would be happy to 

follow up with more specifics on that. But I think, in general, there 

are concerns, particularly perhaps around impact on charitable giving. 

Mr. LEWIS. Thank you. 

Yes, ma’am. 

Ms. LEE-VILLANUEVA. I would just like to add that for the 

AARP Tax-Aide program, our commitment would be to make sure 

that our volunteers are up to speed on the current tax law and 

make sure that they are properly trained in order to serve our clients. 

Our clients that we see, the taxpayers with the lower income, 

and many of them in the older population, would still need assistance to be able to prepare their returns, and we would be there 

committed to provide that assistance. 

Mr. LEWIS. My time is running out, but if you could make it 

quick, and I will make it quick. 

What is your number one recommendation for Congress in terms 

of improving taxpayer service in your community? 

Ms. MACMILLAN. I think overall the lack of funding has been 

the biggest problem, and we encourage Congress to look to funding 

them better. 

Mr. LEWIS. Thank you. 

Ms. LESTER. I would have to agree. I think just making sure 

that taxpayers—I know there has been a big push to improve the 

online capabilities, and we think that is great. But just making 

sure that taxpayers have the ability to talk with actual representatives via phone and also at Taxpayer Assistance Centers is critical. 

Mr. LEWIS. Thank you. 

Ms. RON. I would also say that funding for programs that are 

so comprehensive, such as VITA, would be very important, especially in diverse communities. And to add to that, I would say also 

perhaps some assistance with data collection and reporting that 

might inform best practices on the ground. 

Mr. LEWIS. Thank you. 

Ms. LEE-VILLANUEVA. I would just say for the taxpayers that 

we see, we turn away taxpayers every year. So even though we 

serve 2.5 million, we still could serve many more. So expanding the 

services of the volunteer programs I think would be ideal in providing service, especially to the lower-income population. 

Mr. LEWIS. Thank you very much. 

Thank you, Mr. Chairman. 

Chairman BUCHANAN. Thank you, Mr. Lewis. 

I now recognize the gentleman from Florida, Mr. Curbelo. 

44 

Mr. CURBELO. Mr. Chairman, thank you for holding this hearing on such an important subject and allowing us to learn directly 

from those who interact the most with the IRS. 

One topic being discussed this morning that I am particularly 

proud to support is the Volunteer Income Tax Assistance program. 

VITA, or VITA as it is called in Miami sometimes, partners with 

the Federal Government and local community to provide tax preparation services for individuals with annual incomes below $54,000 

and for those with limited proficiency in English. 

The VITA preparation services are of the highest quality, with an 

accuracy rating of 94 percent, even including returns claiming the 

complicated earned income tax credit. The certified preparers in 

the VITA program help traditionally underserved populations navigate the obstacles associated with filing a tax return and protect 

them from fraudulent preparers. 

These are some of the most vulnerable people in our communities, Mr. Chairman. And these are people who want to comply, 

who want to follow the law, who want to do the right thing, which 

is why I have become such a strong advocate for this program. 

I want to thank your Committee staff, Mr. Chairman, for the 

great work they are doing on this issue and others. And I am so 

pleased that H.R. 2901, the VITA Permanency Act I introduced 

with Representative Davis, has garnered the support of 38 bipartisan cosponsors, including 13 Members of this Committee. 

It is great that the Senate has included this language in their 

tax reform package. And I will continue to lead the charge to maintain full funding with the Appropriations Committee as we work 

toward a spending resolution for fiscal year 2018. 

I want to ask, Ms. Ron, as the IRS’s Taxpayer Assistance Centers offer less and less face-to-face help to people, are you seeing 

an increase in demand for VITA services? 

Ms. RON. Definitely. And I would say in Miami-Dade County, for 

example, we estimate that we are only serving 1 percent of the 

folks that are eligible for this service. So there is definitely a lot 

of opportunity and a lot of demand there. 

We work very closely with our local SPEC offices and IRS partners and there is a great trust there. And we definitely see a lot 

of increase out of need, but also, I think, recognition of the quality 

of services that we provide, particularly around amendments and 

other kinds of difficult situations. 

Mr. CURBELO. How is your interaction with the IRS? Are you 

getting referrals from the agency? 

Ms. RON. Yes, definitely, and there has been an increase, I 

would say, at least for the past 3 years. 

Mr. CURBELO. Okay. I also want to ask you, in your testimony 

you mentioned the vibrant entrepreneurial economy in Miami-Dade 

County, which I am so familiar with and which makes me so proud 

to come from such a diverse, dynamic, and special part of the 

world. 

Can you elaborate on any microbusiness trends that you are seeing? Are you seeing an increase in individuals with 1099s or miscellaneous income from things like Uber driving, Thumbtack, or 

other tech-related commerce? 

45 

Ms. RON. Yes, we definitely are. I think, also, in part in response to the economy and especially in a place where you have experiences like natural disasters, Irma recently, a lot of people take 

up self-employment opportunities in order to meet their financial 

needs that they are already struggling with. 

So there is definitely an increased need for that. And because it 

is such a diverse community, a lot of people are not perhaps as 

well-versed with our formal financial structures and systems. And 

so they need that one-on-one support that programs like VITA provide. 

Mr. CURBELO. Thank you. 

Thank you, Mr. Chairman. 

And I am grateful to you, Ms. Ron, and to all of the individuals 

who have joined us this morning. 

Thank you very much. I yield back. 

Chairman BUCHANAN. Thank you. 

I now recognize the gentlelady from Washington, Ms. DelBene. 

Ms. DELBENE. Thank you, Mr. Chairman. 

And I just want to say thank you to all of you for being here with 

us today. 

I represent a big district in Washington State, and we have 

many areas, rural areas, where access to reliable Internet access 

is challenging, and sometimes there is no Internet access whatsoever. 

So when we look at rural communities and rural communities 

that may not have assistance nearby, I wondered—and you mentioned this, Ms. MacMillan—I wondered if you could talk a bit 

about what the experience is like for folks who don’t have electronic access, reliable electronic access, and who live in rural areas 

where there may not be assistance close by. What is their experience like? 

Ms. MACMILLAN. Yeah. That is one of those major limitations 

of IRS.gov, they may not have Internet access, or it just may not 

be suitable for what they need to do or what their needs are. 

Taxpayer Assistance Centers have been closed more and more recently, and the level of information that they can give and the different circumstances for which they can help are being further and 

further limited. The staff there has been told they may only answer 

basic tax questions during tax season, and outside of tax season 

they can’t answer basic tax law questions at all. 

So these people, basically their only option is to either get on the 

telephone or seek out professional help. And like the VITA sites, 

there is just not enough of the Taxpayer Assistance Centers to go 

around anyway. 

So these people are ending up on the phones. And the phones, 

the level of service is pretty much a disaster. And the level of calls 

they can answer and the wait times just are unconscionable, and 

they just don’t have the staff to—— 

Ms. DELBENE. And if they wanted to go to a Taxpayer Assistance Center? 

Ms. MACMILLAN. A Taxpayer Assistance Center might be really far away from them, and they need to make an appointment. 

And I think that is probably the biggest issue now, because taxpayers are used to being able to drive to their local IRS office, 

46 

which could be 200, 300 miles away, and they get there and they 

are told, ‘‘Oh, we do this by appointment only. You will need to get 

on the Internet and make your appointment.’’ 

Ms. DELBENE. And if they can’t get on the Internet and make 

an appointment? 

Ms. MACMILLAN. I guess there is a call-in number. But appointments are being scheduled way out in the future too. There 

are very few exceptions to the walk-in policy of you turn them 

away when they walk into the Center. 

Ms. DELBENE. So for—— 

Ms. MACMILLAN. They are out of luck. They are out of luck. 

Ms. DELBENE. You talked about providing resources. What else 

do you think we can do to make sure that—— 

Ms. MACMILLAN. Training. A dedicated training unit within 

the IRS would be a big help. The training has gone way downhill 

because of budgetary constraints. So they are not able to hire new 

employees, and they are not able to train employees. So they basically are keeping more employees at lower-level positions, so they 

don’t have the authority or the education to know how to handle 

more taxpayer problems. 

Ms. DELBENE. Have others had experience with rural communities and have feedback? 

Ms. Lester. 

Ms. LESTER. Yeah, absolutely. We service the entire State of 

Georgia. And so the majority of our clients are in the metro Atlanta 

area, but we do offer our services to everyone throughout the State. 

And there are a lot of rural communities there where taxpayers 

want to work with us but they have to work with us through snail 

mail and fax and things like that, which can be very challenging. 

As Jennifer said, the Taxpayer Assistance Centers only accepting 

appointments poses a real issue because taxpayers have to have access to a phone, have to have access to the Internet. And even for 

taxpayers who have that, some taxpayers have immediate needs 

that could likely be resolved, but because they have to make an appointment they aren’t able to get the assistance they need right 

then. 

Ms. DELBENE. And they would have to take time off from work 

to actually go. 

Ms. LESTER. Absolutely. And some taxpayers just don’t have 

that flexibility. 

Ms. DELBENE. Is there any other feedback? 

Ms. Ron. 

Ms. RON. I would add also that in Miami-Dade County transportation is a huge problem, and even in some of our neighboring 

communities, like Monroe County, where there are a lot of farm 

workers. So we definitely encounter this. 

And for us, I would just offer up that there have been some strategies that we have used that have been helpful. For example, 

public-private partnerships with banks or other partners that actually have mobile units. And so we are able to kind of maximize that 

by going out on specific dates to serve the populations on-site. 

And another one I would say is perhaps being more creative 

around virtual tax preparation. That has also been something that 

we have used. 

47 

Ms. DELBENE. Thanks. 

Ms. LEE-VILLANUEVA. Yes. Volunteers serve in the community 

where they live. And in many of our communities they know the 

surrounding areas that are around them. We do require that we 

have at least two volunteers in any community to be able to open 

a site. 

But we are beginning to look at what options are available virtually. And there are many volunteer programs around the country 

that have created virtual offerings to those locations that have the 

more rural areas. So we look at those as well. 

Ms. DELBENE. Thank you. 

Mr. Chairman, I yield back. 

Chairman BUCHANAN. Thank you. 

I will now recognize the gentleman from Pennsylvania, Mr. Meehan. 

Mr. MEEHAN. Thank you, Mr. Chairman. 

And I thank this very distinguished panel for not only your presence here today, but for all the work you do out in the community 

on behalf of many of the taxpayers who are confused by the process. 

I will say, I mean, there was a point being made, and I think the 

gentleman from Georgia raised some issues, but one of the real objectives of the tax reform bill is simplification. We had testimony 

here just a short while ago that 94 percent of the people are expected to be able to file their tax returns on that simple card. I 

think that is going to improve a lot of issues to some extent. 

Now, where there are questions, I guess, that is where we are 

going to have to come in and follow up with some of the issues that 

exist. So we need to be able to work in that space for sure. 

But we have all had experiences in our own area with the frustrations of dealing with the IRS in terms of getting responses. I can 

tell stories much like the rest. I had a gentleman who had a 

$75,000 refund due in tax year 2014. The problem was, he calls up 

the IRS, he talks with a person, because it was suggested to him 

that he was a victim of identity theft. And I don’t know how frequently you see these problems. But he mentioned that he was a 

victim of identity theft. 

They resolved it over the phone. And he said, ‘‘Okay, now I have 

it, I see where you are in the system.’’ And he told him he would 

receive his return in the coming weeks. He waited a couple of 

months, still nothing. When he contacted the IRS, they said, ‘‘Well, 

you never sent anything to us.’’ 

How frequently do you run into circumstances in which there is 

either a lack of accountability or at least a lack of some kind of confirmation of meetings? 

And what is the impediment? I understand there are issues of 

identity theft. But what is the impediment, in this age of computergenerated documents and things of that nature, to having an acceptable use of a PDF or something else that goes in, in terms of 

dealing with them? 

Ms. MacMillan, can you start me on some of that process? 

Ms. MACMILLAN. Well, I can tell you from my experience and 

what I have heard from colleagues is that is another area that is 

48 

not being fully—tax refund holds are one of the big issues for identity theft issues when they come up. 

And the other issue is IP PINs, the security PINs that IRS can 

assign to taxpayers who are victims of identity theft. One issue 

that we see is that these are not available to anyone who hasn’t 

had their identity stolen except for in a few circumstances. There 

are three States where they can. 

Mr. MEEHAN. How do you know if you have had your identity—— 

Ms. MACMILLAN. Pardon me? 

Mr. MEEHAN. How do you know if you have had your identity 

stolen? 

Ms. MACMILLAN. Oh, you find out when you file a tax return 

and the IRS sends you a letter that says, ‘‘But you already filed,’’ 

and you didn’t. 

Mr. MEEHAN. Okay. 

Ms. MACMILLAN. The scammers have—they go by the client information, the taxpayer information off the dark web, and then 

they file fraudulent returns in order to claim, you know, just fraudulent, made-up refunds. And they are getting more and more sophisticated. So the IRS has to have sophisticated filters for trying 

to catch these people. 

So the first issue is a lot of bona fide taxpayers are having their 

refunds frozen. And the other issue is, if you are a victim of ID 

theft, the IRS process for getting an IP PIN is kind of burdensome. 

But also the fact that it is not available to all taxpayers, even those 

that have not had their identity stolen, is a problem. 

Mr. MEEHAN. So could we amend that in some way by being 

able to require that? Or what is the reason for not allowing that 

PIN? 

Ms. MACMILLAN. The reason the IRS has stated that they are 

not making that available to all taxpayers is that it is a very expensive program because it is done through third-party providers. 

And then the identity theft, I think the filters that the IRS runs 

all tax returns through to try to gauge whether or not this might 

be a rogue return, those are getting better, but there is still need 

for improvement, and there needs to be a dedicated function at the 

IRS to help these taxpayers. When their refund is frozen they need 

to have an army of assisters on the phone that can help these people get through that process of getting their return—their refund 

to them. 

Mr. MEEHAN. Yeah. We have looked at this issue before, and 

I know the IRS is working very hard in this space. But we are seeing that there are still some impediments. 

Ms. MACMILLAN. Right. 

Mr. MEEHAN. Does anybody else have an observation with respect to this issue of identity theft and timely response? 

Ms. MACMILLAN. It is getting better. They have recently improved their filters. But, unfortunately, I think to some extent that 

is going to continue to be an issue. 

I think they just need to be able to handle these problems or 

handle the resolution more quickly. Right now they send a letter 

to the taxpayer saying, ‘‘This might not be your return. Please send 

49 

us some documentation.’’ And it is just a long process for these people to get their refunds. 

Mr. MEEHAN. More work needs to be done. 

Thank you, Mr. Chairman. I yield back. 

Chairman BUCHANAN. Thank you. 

I now recognize the gentleman and good friend from Oregon, Mr. 

Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. 

I appreciate having our friends come in to talk about some of the 

important roles that you play trying to complete the network of assistance for taxpayers. It is certainly daunting for them. 

And having volunteers at AARP actually more extensively 

trained than some people who are doing it for hire raises troubling 

issues in terms of perhaps we shouldn’t have a system—require 

certain minimum competence for people who are going to charge 

for it, at least as high as what you do with your volunteers. I think 

that is very important. 

But what I am hearing underlying your testimony is that a fundamental problem is that there just are not enough resources at 

the IRS. I am not hearing from you that you find lots of people who 

are lazy and who are malicious. 

Although I will say, from my visits to my local IRS employees, 

they are stressed, they are burdened, they have to take shortcuts 

to try to keep up. I have shared with people on this panel, I have 

watched them burst into tears because they can’t give the service 

that they want to give. 

And I think what we need to be doing is a deeper dive on what 

Congress has done, engaged in political malpractice because of the 

antipathy that some people have to the IRS and taxation, punishing the taxpayers. 

What we have seen, deliberately starving the budget of the IRS 

that has dropped a billion dollars since my friends in the Republican Party got control of the House of Representatives and 

clamped down, a billion dollars less at a time when the number of 

taxpayers increases. It went, what, from 230 million to 244 million 

returns. And those returns are increasingly complex because of all 

the things that Congress passes. 

And while they were doing that, there were more burdens placed 

on the agency. They have to implement a number of legislative 

mandates, the Affordable Care Act, the Foreign Account Tax Compliance Act, Achieving a Better Life Experience, the ABLE Act, the 

reauthorization of the health coverage tax credit, the Protecting 

Americans from Tax Hike. 

All of these were unfunded, layered on top of an agency that has 

been losing staff. We have, I think, a third less than we had 20 

years ago. 

But one of the things we still have is the computer system. In 

fact, we have had testimony before this Committee that the systems go—Fortran. I mean, we are talking about people in the 

1970s. They have difficulty in some instances getting people knowledgeable to fix and operate the computers because they are so out 

of date. 

50 

That is the real challenge we are going to watch, we are going 

to unleash, if my Republican friends pass this tax bill, which everybody is still trying to find out what is in it. 

I loved finding out this weekend that people who make between 

$550,000 and $650,000 might be facing an effective marginal tax 

rate of 107 percent. I didn’t hear about that in our march through 

the fact that people who earn their income from wages and salaries 

are going to be paying a higher rate than people who can recharacterize their income for the first time in our history. 

So we are about to give a beleaguered IRS, outmoded, illequipped, with few new people that are there, and these artificial 

constraints, we are about to give them more mandates in terms of 

how you are going to have guardrails to deal with pass-through income. 

Mr. Chairman, at some point we have to acknowledge what we 

have done to the agency. And I hope everybody spends time meeting with the people who work there who want to do a good job. 

Cutting back on enforcement that gives us $6 for each dollar that 

comes in, no business that you had would operate that way, and 

we shouldn’t operate our accounts receivable this way. 

Thank you for your patience. 

Chairman BUCHANAN. Let me just say to the gentleman that 

is why we want to do IRS reform on a bipartisan basis. I am committed to that because I agree with you: there are a lot of issues 

that have to be dealt with. Technology is at the top of the list. 

With that, I recognize the gentleman from Michigan, Mr. Bishop. 

Mr. BISHOP. Thank you, Mr. Chairman. 

And thank you to the panel today for your time and for all your 

dedication to the demographic that you represent. All of us here 

represent a good number of families and individuals. On a daily 

basis, we are deluged by issues, concerns. And I have to say that 

IRS issues are high on the list of issues that come to my office and 

that our dedicated staff works on and that I work on a daily basis. 

And each of us has a story to tell, many of them horror stories, and 

they are not few and far between. Unfortunately, there are several 

of them out there, and they come to us almost daily. 

Mrs. Walorski mentioned some in her district, and Mr. Meehan 

did the same. I won’t do that because there are too many to talk 

about. But I will say that one of the things that I am very proud 

of with this Committee is the fact that we have taken on tax reform. And the issues that have really vexed my constituents, as 

Mr. Meehan said, one of the biggest issues is how complicated this 

IRS Code is and the 70,000 pages of convoluted rules and regulations that have made life miserable for folks. That period of time 

between January 1 and April 15 is a horror story for many families 

and many businesses, and even worse if they get audited thereafter. So anything we can do to simplify I would support and have 

supported. I think this will be a great bit of relief to families and 

to businesses. 

I also have to say that the amount of relief that we are giving 

in the form of tax rate is substantial as well. And many of the folks 

in your demographic will feel that relief in many ways. In fact, 

many of them may not have tax liability at all under the plan that 

51 

we have put forward, which I think is probably the best-case scenario for everybody. 

One thing that I am concerned about is, in your demographic, for 

those of lower income, are folks that are able to respond to IRS audits. Can you tell me—in your organizations and all of your very 

worthy, noble organizations, can you tell me if you provide audit 

services for your clientele? And if so, to what extent? I guess let 

me start here with the AARP because that is one area that I know 

that I hear the most from, the older population. 

Ms. LEE-VILLANUEVA. The low-income population, yes. TaxAide itself does not provide audit services. Under the volunteer programs within the IRS, it is the taxpayer’s responsibility so we ensure that we make sure that the taxpayers understand that this is 

their return and that they are responsible for it and for the information that is on the return. So we might talk to them when they 

get the letter; they usually do contact us. But we do not go with 

them to actually intervene with the audit. 

Mr. BISHOP. Okay. So you don’t represent them in the audit? 

Ms. LEE-VILLANUEVA. No, we do not. 

Ms. RON. I would say we provide a program similarly. We do 

not—what we aim to do is partner up with LITC and other partners to help with those things. 

Ms. LESTER. Yes, we actually do work with taxpayers who are 

going through an audit or an examination with the IRS. The vast 

majority of our clients are dealing with correspondence audits. So, 

again, the IRS is sending them a letter saying that they are questioning or looking into particular credits or deductions they have 

taken on their return. And so, once they contact us, we like to step 

in and walk through that process with them. The earlier they come 

to us, the better, obviously, because we have more remedies that 

we can explore. The problem is that a lot of times just because of 

our population, they are kind of transient in nature. They may not 

open notices. And so a lot of times, when they come to us, they are 

much further along in the process. But for those taxpayers who do 

come to us while they are still in the audit phase or examination 

phase, we are able to work with them to pull documentation together. We might write a memorandum in support of their position. 

If it goes to appeals, we request face-to-face hearings with appeals 

with the Atlanta field office, or we work over the telephone to work 

through those issues with them. 

Mr. BISHOP. Thank you. 

Ms. MACMILLAN. As I think you know, at Enrolled Agent, our 

license is for representing taxpayers so that is one of the breadand-butter areas, is postfiling correspondence. I personally do an 

awful lot of individual audits. 

Mr. BISHOP. Can you give me an idea of the demographic that 

you represent? How many of them percentage-wise would face an 

audit as a result of their tax return? 

Ms. MACMILLAN. In my practice, about half, maybe more than 

half are field audits, and that is just because I advertise or I put 

myself out there as enjoying doing field audits for taxpayers and 

office audits. The majority of what I see are these correspondence 

audits or, more often, the matching program, the CP–2000s, and 

those are—those have their own set of issues because they are comVerDate Sep 11 2014 13:29 Feb 22, 2019 Jkt 033658 PO 00000 Frm 00055 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33658.XXX 33658
52 

puter-generated audits that are not being handled by a human 

being in any way, shape, or form. 

Mr. BISHOP. Thank you very much. 

Mr. Chairman, I yield back. 

Chairman BUCHANAN. Thank you. 

I now recognize the gentleman from Arizona, Mr. Schweikert. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman. 

This is one of those moments where I am going to throw a number of things at you, and I am begging for even Minority staff and 

others to sort of participate. 

First, to our witness from AARP, we love you in Arizona. As a 

congressional office, we have had terrific experiences coordinating 

and working with some of your staff. 

I am probably a very ill man. For years, I used to help people, 

even in my neighborhood, do their taxes. So they would come, they 

would bring me things to eat, and I would sit and do their taxes 

for them, which is sort of absurd that I ended up on this Committee because I still do my own. And even this week, I got letters 

from the IRS, I owed—they sent me a letter saying, ‘‘You owe 

$10.47’’ and then they sent my wife one, which we filed jointly. And 

that is absurd why they would duplicate those. 

So let me throw a series of things at you. Ms. Ron, a lot of your 

population is getting the earned income tax credit. And in today’s 

world, there is a delay on that as a fraud prevention. I could come 

to you right now and say: If we could get the IRS to actually use 

outside databases—so someone comes in, boom, bounce it off the 

outside database; we know the data says this is the range of income—we could actually get rid of that delay, send them their resources immediately. 

Ms. Lester, when you actually sit someone down—and, look, they 

are asking for documentation. The fact of the matter is, we all have 

these. There is a simple technology where you take a picture of the 

1099—and instantly, that could have been how you file the document that was asked for instead of having to find a photocopier, 

put it in an envelope, mail it. Boom, you could have done it instantly. 

In today’s world, we should have the ability to have a biometric 

login to actually see your tax filing. You could run it on a distributive ledger so you know it is absolutely safe and secure and not 

subject to fraud. 

There are technological solutions that the rest of the world is 

using, even some of the new—and I know I am rambling—but if 

any of you have ever had to call Amazon or others and the person 

you are talking to is actually a computer that is using the voice 

recognition and walking you through, they are saying, ‘‘No, you 

need to do this, do that, do that, do this,’’ instead of this chaos of 

thinking we are going to have phone banks of people who are ready 

to deal with issues— please help me: Where are—am I wrong that 

we have missed a generation because the IRS is still—its base 

database predates President Kennedy. And this is the world we are 

dealing with. 

Ms. MACMILLAN. Yes. Definitely many of the systems and even 

the thought process at the IRS is really antiquated. We are encourVerDate Sep 11 2014 13:29 Feb 22, 2019 Jkt 033658 PO 00000 Frm 00056 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33658.XXX 33658
53 

aging e-services—not e-services—E-Signature legislation that I 

think Congressman Rice has authored. 

Mr. SCHWEIKERT. And I mean this with much love to the Congressman: E-Signature needs to be a thumbprint. 

Ms. MACMILLAN. That would work too. There are third-party 

providers who can provide that. 

Mr. SCHWEIKERT. I understand that, but even those are coding 

from 10 years ago. 

Ms. MACMILLAN. Yeah, that would be—anything they could do 

to improve the technology. We have also suggested having us be 

able to upload PDFs and have them actually see them, and they 

can’t do that yet. So there is a definite lag in the electronic advancement of services with the IRS that—and I assume it is a 

funding issue. 

Mr. SCHWEIKERT. But, Ms. Lester, when you are actually sitting with someone of modest income and you are helping them do 

their taxes, what is the software you are using? 

Ms. MACMILLAN. I use Lacerte. 

Ms. LESTER. In terms of—— 

Mr. SCHWEIKERT. I mean, are you actually using the IRS’s? 

What are you filling out on your computer screen? What is the software? Because I know, at AARP, you use—— 

Ms. LEE-VILLANUEVA. We use the IRS-provided software, 

which is TaxSlayer. 

Ms. RON. Correct. Provided—it is also TaxSlayer. 

Ms. LESTER. For us, we are dealing with controversies, so a lot 

of times we are having to draft letters and memorandum. 

Mr. SCHWEIKERT. So you are doing more triage. 

Ms. LESTER. Exactly. 

Mr. SCHWEIKERT. Don’t you love the idea of being able to take 

a picture of the document? 

Ms. LESTER. That would make our lives so much easier. 

Mr. SCHWEIKERT. Having actually looked at some of this and 

I have actually tried to reach out to some of the providers, why it 

is just not more graphical, where you could sit someone down, and 

they can do this, say, and put in the number. It is archaic where 

we are at. Maybe I am living in a techno-utopian world, but I am 

hoping if we are actually really close to doing something, it is simpler. That is our generational inflection to actually now fix the way 

we do our data systems where we interact with the public that we 

are asking to pay these taxes. 

With that, I yield back, Mr. Chairman. 

Chairman BUCHANAN. Thank you. I now recognize the gentleman from South Carolina, Mr. Rice. 

Mr. RICE. I want to thank you for what you do in helping people 

comply with the tax law. It certainly—it is a burden to the average 

person, and it is an awful shame that it is that way, that we have 

to have such an army of folks to help them comply with this law. 

And I know you two on the end there do it for free. So thank you 

for what you do. Thank you for keeping people out of trouble. 

Thank you for keeping our government running more smoothly. 

I have to ask you, Ms. Ron, and Ms. Lee-Villanueva, what percentage—have you all looked at what percentage of your clients are 

itemizing? I would assume it was pretty low if they are pretty lowVerDate Sep 11 2014 13:29 Feb 22, 2019 Jkt 033658 PO 00000 Frm 00057 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33658.XXX 33658
54 

income folks, right? Have you looked at that and if this doubling 

of the standard deduction is in fact going to eliminate a lot of that 

and make it simpler for folks? 

Ms. LEE-VILLANUEVA. I don’t have the actual percentage with 

me right now. I could get that for you and get back to you, if you 

would like. But we do see a lower number of people who itemize 

just because of the clientele we serve. 

Mr. RICE. Would you say less than 10 percent? 

Ms. LEE-VILLANUEVA. Probably about 15 percent would be my 

guess. But I would need to double-check that. 

Mr. RICE. What would you expect? Have you all run any numbers? What would you expect the effect of doubling the standard 

deduction would be on the number? 

Ms. LEE-VILLANUEVA. I expect it to decrease the number of 

people who need to itemize. 

Mr. RICE. And isn’t that—the itemization, isn’t that one of the 

more complicated areas in terms of preparing somebody’s tax return? 

Ms. LEE-VILLANUEVA. Well, the clientele we see, it is really 

just the stress of filing their tax return. And the reason they come 

to us, they might have a very simple, straightforward concern, but 

they are just more comfortable being able to have somebody sit 

down and for them to make sure that it is done correctly. We do 

see also a large population, of course, of the 60-plus. It might be 

a lot of people who have never had to file their own return, but because of their current situation, the loss of the partner, the spousal 

partner, that might have been filing it, they are in a situation now 

that they have never been in, so they just—— 

Mr. RICE. On the income side, you usually get a 1099 or a W– 

2 or something like that that you can use to fill that out. But the 

deductions and keeping track of all that and making sure it gets 

to the right—it seems to me like that would be the most complicated area generally for filling out tax returns for lower-income 

folks. And it seems to me like doubling the standard deduction will 

make it a lot simpler for folks. 

Ms. LEE-VILLANUEVA. It should make it simpler, yes. 

Mr. RICE. Ms. Ron, would you agree with that? 

Ms. RON. Not necessarily. I would say for the VITA population, 

if I could take a guess, I would say less than 10 percent itemize 

their deductions right now and with potential—— 

Mr. RICE. Would you think this doubling of the standard deduction, do you think it would make it more or less people that would 

itemize? 

Ms. RON. Would you say that one more time? 

Mr. RICE. Okay. The doubling of the standard deduction, 

wouldn’t you think that would diminish the number of people who 

itemize? 

Ms. RON. It might. But since it is less than 10 percent of ours 

that itemize now, I don’t know how much of an impact that would 

have. 

Mr. RICE. So what is the most complicated area that you have? 

Ms. RON. The most complicated—well, for us, it is dealing with 

amendments, and it has more to do with people having their taxes 

55 

prepared by folks who make errors, for example. The other one I 

would say is for—— 

Mr. RICE. You don’t do direct tax preparation—— 

Ms. RON. We do, we do. But a lot of people come referred because they need amendments. 

Mr. RICE [continuing]. Preparation. What would be the more 

complicated area that you deal with when you are preparing—people on the low-income side, right? 

Ms. RON. Yes. 

Mr. RICE. Those making $50,000 or less. What generally complicates their tax returns? 

Ms. RON. I would say it is probably the self-employed folks. And 

for them, they would still need to be able to track their expenses 

and deductions and all that just on the financial management side. 

So I don’t know how much of an impact it would have on them. 

Mr. RICE. You say you do a lot of earned income tax credit and 

child tax credit. 

Ms. RON. Yes. 

Mr. RICE. We had the State Attorneys General or State Innovation Group in here last week talking about those credits. And they 

were telling us that about 30 percent of those are fraud. What do 

you all do to ensure that, when you file the return, they are accurate, and they are not fraudulent? 

Ms. RON. Sure. We do a lot to prevent that. For us, remember 

for VITA sites, we are looking for 90 percent accuracy, so it is a 

different world in a way. So, for us, I would begin with—— 

Mr. RICE. You ride down the road and you see these signs on 

the side of the road ‘‘taxes prepared here, earned income tax credit,’’ and I wonder about that. So what do you all do to ensure that 

it is not fraudulent? 

Ms. RON. I had a little trouble hearing over the coughing. So, 

for us, the major thing is the training of the volunteers. Training 

of the volunteers, and at sites, there is a lot of operational detail 

that goes on. People, for example, have to have—have to bring 

physical Social Security cards. If you are a married couple, you 

both have to be there to sign documents. There are a lot of requirements on our end to make sure that we prevent those kinds of 

issues. 

Chairman BUCHANAN. Thank you. Let me first thank all of you 

for coming today. I want to especially thank all of our volunteers. 

I know in my community, in Sarasota, Florida, we have a lot of volunteers with a lot of great organizations. Without them, you 

wouldn’t have the organizations. So I just want to applaud what 

you are doing. 

I want to do kind of a quick—we are trying to do IRS reform on 

a bipartisan basis, but I would like to do—you might have heard— 

like a lightening round, so I want you to be kind of concise, and 

then also I would like to have you give me whatever input to our 

Committee on three things I want to bring up to you today because 

I need your help on it. 

First, assuming we get tax reform done, which it looks like might 

happen before the end of the year, I am interested, what are your 

two or three biggest concerns in terms of implementation that we 

need to address quickly? I mean, they have already talked about 

56 

500—I think it was $500 million in terms of dollars available, but 

I would like to get your thoughts and your concerns. 

If you have a quick comment you want to make that you think 

would be at the top of the list in terms of this because it is happening at the end of the year. I am expecting it is going to get 

done, but I am interested in hearing any thoughts that you might 

have. We will start quickly with you and just be concise on this 

point. 

Ms. MACMILLAN. I think one of the big issues is going to be 

that the IRS does need to implement this, and there is going to be 

a lot of time spent bringing it up. I think it did create simplification for lower-income or less complicated taxpayers, and there is 

just way more to be done. 

Chairman BUCHANAN. Ms. Lester, I just want everybody to be 

fairly quick because I want you to get back to me because I have 

a couple more questions. Go ahead. 

Ms. LESTER. I think the key thing will be training to make sure 

that the IRS personnel understand what the changes are, understanding that different tax years will have different requirements. 

And so, when looking at past controversies or past years, they may 

have one set of requirements or one set of laws whereas the current year may have different ones so that could complicate matters. 

Chairman BUCHANAN. Ms. Ron, do you have anything? 

Ms. RON. I would say, from our perspective, potentially it is 

more the impact on charitable giving, which we are estimating 

could be a reduction in of 5 or 10 percent. 

Chairman BUCHANAN. Ms. Lee-Villanueva. 

Ms. LEE-VILLANUEVA. The IRS readiness is the top concern 

that we would have, making sure that they are ready to implement 

the change, have the time in place to be able to educate and let 

taxpayers know what the changes are. 

Chairman BUCHANAN. The second question I have is on dispute resolution. I am concerned when I read in the paper, USA 

Today, 62 percent of Americans don’t have $1,000 in the bank. 

They are probably a lot of folks that you work with. So when someone gets something where they might be self-employed and, all of 

a sudden, they owe $3,000 to $5,000, what is your sense of how 

quickly that can get addressed because it is very easy to go to a 

CPA or somebody else and run up a $4,000 bill on a $4,000 to 

$5,000 issue? Is that commonplace? And is our dispute resolution, 

does that work at all, or is that a disaster? 

Ms. MACMILLAN. It is quite common when assessments are incorrect and with the fact that the taxpayer can’t reach someone to 

quickly resolve it. Also, there is no opportunity for a taxpayer to 

go to appeals until the very end of the process. And we believe that 

appeals should be available earlier in the process. 

Chairman BUCHANAN. What happens when someone in the 

real world gets a bill for $3,000 to $5,000, pick a number, $2,000 

to $6,000 or something, you know, they have to go through a process. You are usually talking some professional. Now you are talking a couple grand. It seems like that has to be an area that we 

have to find a way that we can work on. 

Ms. MACMILLAN. I completely agree. And I did want to say at 

some point today that I am constantly amazed every time I have 

57 

a successful resolution on one of these things for my taxpayers. I 

think to myself: What would somebody do if they didn’t have me, 

if they didn’t have the resources to hire someone or they couldn’t 

even find someone? 

Chairman BUCHANAN. I am just worried about them being able 

to pay the bill. 

Anybody else on that quickly? Ms. Ron or Ms. Lester. 

Ms. RON. I would say, from the population that VITA serves, we 

are looking at people who literally sometimes leave the VITA site 

because they saved $150.00 on tax prep fees. So, if they do that for 

$150, things that are very commonly in the thousands are detrimental to their entire family. 

Chairman BUCHANAN. If they get a letter from the IRS, are 

you able to help them, walk them through that, maybe get it resolved fairly quickly, inexpensively? Is that the idea? I am just trying to understand it. 

Ms. RON. So, for us, we work with our partners who will help 

them navigate that system because, for most of them, they have no 

idea where to even start. 

Chairman BUCHANAN. My last question, just quickly, is on the 

taxpayer bill of rights. Is that something that, I am sure you’re familiar with it, but is it something where the volunteers are being 

trained or educated on the taxpayer bill of rights because I am sure 

a lot of taxpayers are not looking at that every day—are the volunteers on behalf of the IRS, is there proper training and education 

so people understand their rights according to the taxpayer’s bill of 

rights? Anybody? 

Ms. LESTER. Absolutely. From our perspective, our volunteers 

are really students and so we do a great deal of training, explaining to students what the taxpayer bill of rights means and what 

the rights are. We also do education and outreach, which is part 

of our mission in the LITC community, doing education and outreach to try to explain to a taxpayer what those rights and responsibilities mean. 

Chairman BUCHANAN. Anybody else, quickly? 

Ms. LEE-VILLANUEVA. I would say that from—we do not actually educate on the bill of rights, but a lot of what the program and 

how the program is implemented is directly related to the bill of 

rights and that we do the quality of service. So a lot of it is written 

into the way the volunteer programs are administered and created. 

Chairman BUCHANAN. It would be helpful to me on any of 

those three issues if you have some followup, if you could get it to 

the Subcommittee, I would be interested in taking a look at your 

experience because you are in the field and dealing with this every 

day. It would be very helpful on these three issues. 

I would like to thank our witnesses for appearing before us 

today. It has been very productive. Thank you. Please be advised 

that Members have 2 weeks to submit written questions to be answered later in writing. Those questions and your answers will be 

made part of the formal hearing record. 

With that, the Subcommittee stands adjourned. 

[Whereupon, at 11:25 a.m., the Subcommittee was adjourned.] 

[Submissions for the Record follow:] 

58 


33658A.027

. AICPA. 

December 12, 20 17 

The Honorable Vern Buchanan 

Chaim1an 

House Ways & Means Committee 

Subcommittee on Oversight 

United States House ofRepresematives 

1102 Longwonh House Office Building 

Washington, DC 20515 

The Honorable John Lewis 

Ranking Member 

House Ways & Means Committee 

Subcouunittee on Oversight 

United States House of Represematives 

1102 Longworth House Office Building 

Washington, DC 20515 

RE: December 13,2017 Heating on " IRS Refonn: 1l1e Taxpayer Experience" 

Dear Chainuan Buchanan and Ranking Member Lewis: 

The American Institute ofCPAs (AICPA) respectfully submits the enclosed written statement for the 

record. We applaud the leadership taken by the Subconunittee to address bow the IRS can improve 

the taxpayer experience and adequately implement new tax refotm measures. 

The AICPA is the world's largest member association representing the accotmting profession with 

more than 4 18,000 members in 143 countries and a history of serving the public interest since 1887. 

Our members advise clients on federal, state, local and international tax matters and prepare income 

and other tax returns for millions of Americans. Our members provide services to individuals. not-forprofit organizations, small and medium-sized businesses, as well as America 's largest businesses. 

If you have any questions, please feel free to contact me at (408) 924-3508, orallllette.nellen@sjsu.edu; 

or Melanie Lauridsen, AICPA Senior Manager of Tax Policy & Advocacy, at (202) 434-9235, or 

melanie.lauridsen@aicpa-citna.com. 

Sincerely, 

Allllette Nellen, CPA, CGMA, Esq. 

Chair, AICPA Tax Executive Committee 

1455 Pennsylvania Ave. NW. washingtOI\ DC 2()()()4.. 1081 

T: +1 202.737.6600 F: +1 202.638.4512 

aicpaglobal.com 1 cimagtobat.com 1 aicpa.org 1 cgma.org 
59 


33658A.028

. AICPA' 

WRITIEN STATEMENT 

OF 

THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTAJ"'TS 

SUBMITTED FOR THE RECORD OF THE 

DECEMBER 13,2017 

HEARING OF 

THE UNITED STATES HOUSE OF REPRESENTATIVES 

COMMITTEE ON WAYS AND MEAI'<S 

SUBCOMMITTEE ON OVERSIGHT 

ON 

ffiSREFORM: THETAXPAYEREXPERIENCE 

1455 Pennsylvania Ave. NW. Washing1on. DC 20004·1 081 

T: •1 202.737.6600 F: +1202.638.4512 

aicpaglobal.com 1 cimaglobal.com 1 aiq)a.org 1 0{1lla.org 
60 


33658A.029

AICPA's Written Statement for the Record 

U.S. House Ways and Means Committee, Subcommittee on Oversight 

December 13, 2017 Hearing on IRS Reform: The Taxpayer Expe1ience 

Page I of5 

INTRODUCTION 

The American Institute of CPAs (AJCPA) applauds the leadership taken by the House Ways 

and Means Subcommittee on Oversight to address how the lntemal Revenue Service (IRS or 

"Service") can improve the taxpayer experience and adequately implement new tax refonn 

measures. 

While changes in tax laws always cause some level of confusion for taxpayers, the magnitude 

of the current tax refonn effo11s will further emphasize the growing frustration taxpayers have 

with the IRS's antiquated technology infrastructure, the lack of guidance on technical issues 

and taxpayer's inability to communicate with the IRS in a timely manner. 

In the interest of good tax policy and effective tax administration, 1 we offer recommendations2 

in tllis statement regarding IRS govemance and oversight, IRS taxpayer service and an IRS 

practitioner services unit, which can collectively improve the taxpayer experience while 

streamlining the tax administration system. Furthermore, any effort to modemize the IRS and 

its technology infrastructure should build on the foundation established by the Report of the 

National Conm1ission on Restructuring the IRS ("Restructuring Commission" or 

"coOIDlission"). The sinlilarities between the condition of the IRS today and the circumstances 

that motivated the creation of the Restructuring Commission are striking. 

AICPA PROPOSALS 

1. ms Govemance & Oversight 

As practitioners with vast experience working with the IRS, we have incorporated the lessons 

leamed from the Restrucn1ring Commission and outline below governance and oversight 

recommendations to shape the agency of the ti.1111re that everyone desires. 

Governance Objectives. Successful governance of the IRS will include strong leadership, 

accountability, and transparent policies working collectively towards needed change. In order 

to hold the IRS accountable, the agency's govemance, management and oversight strucn1re 

must:3 

• Develop and maintain a shared vision among all personnel and stakeholders with 

continuity; 

• Set and maintain consistent priorities and strategic direction; 

• Impose accountability on senior management; 

1 AICPA, Guiding Principles for Good Tax Policy: A Framework for Evaluating Tax Proposals, 2017. 2 For additional information see AI CPA letter, "Ensuring a Modem-Fw~etiouiug IRS for the 21st Century," April 

3, 2017. TI1e recouunendations offered are in collaboration with otber professional organizations and fonner 

Seryice execulives. 3 The National Conunissioo of Restmcnuing the lntemal Revenue Service, A Vision for a New IRS, Report oft he 

National Commission 011 Restntcruring 1he bllemal Revenue Service, June 25 1997, page 8. 
61 


33658A.030

AICPA's Wrinen Statement for the Record 

U.S. House Ways and Means Committee, Subcommittee on Oversight 

December 13, 2017 Hearing on IRS Reform: The Taxpayer Expetience 

Page 2 of5 

• Develop appropriate measures of success; 

• Ensure that the budget and technology support priorities and strategic direction; and 

• Coordinate oversight and identify problems at an early stage. 

Congressional Oversight. Congressional oversight is a critical process in et1suring exe·cutive 

branch compliance with laws, evaluating performance, and providing the transparency 

necessary to maintain the public's trust. We recommend re-establishing the annual joint 

heaaing review" to focus on the following priorities: (I) strategic and business plans; (2) 

taxpayer service and compliance; (3) technology and modernization; and (4) filing season. 

As once required by statute,S the Joint Committee on Taxation should provide a bi-annual 

report on the over all state of the Federal tax system.6 However, the statute stipulates that 

the report is only required if the necesSOIJI resources are appropriated to carry out the 

requirement. We believe that such a report would contribute to stability at the IRS and assist 

the agency in achieving its mission. Therefore, we urge Congress to app1·opl'iate the 

necessa1-y funds for the r eport. 

IRS Oversight Board. The IRS Oversight Board was intended to provide experience, 

independence and stability to assist the IRS in moving forward in a focused direction. 

However, the board received criticism for being "ineffective" and "missing in action" in 

achieving its stated mission, 7 and suspended operations due to an insufficient number of 

members to constitute a quorum. 

We recommend that Congress require a Govemment Accountability Office (GAO) review of 

the private sector board and detem1ine if it is an essential component to providing the trust 

and continuity that will allow the IRS to become a respected, service-oriented organization. 

The GAO could provide recommendations to ensure the board has sufficient authority to (I) 

hold the IRS accountable for successfully fulfilling its mission; (2) oversee the implementation 

of key recommendations from advisory groups; and (3) ensure the IRS remains independent 

and non-partisan. 

Human Resources. Congress should enable and encourage the IRS to utilize the full range of 

available authorities to hire and compensate qualified and exp erienced professionals from 

the private sector, as needed, to improve the Service's ability to meet its mission. It is also 

crucial for the IRS to designate a senior-level executive dedicated to overseeing and 

collaborating with the practitioner community in creating a practitioner services unit (see 

discussion below). 

4 P.L. I 05-206, sec. 4002, expanded IRC section 8022(c) regarding reporting by the Joint Couunittee on Taxation. 

P.L. 108-31 1 (10/4/04) modified this provision by removing the specifics required for the ammal report and 

eliminating the joint review after 2004 (also see IRC sectiou8021(1)). A statutory change is needed to reinstate 

the required joiJJI review. s !d. 6 IRC section 8022(3). 1 Morningstar, Inc., 171e IRS Has No Independent Oversight Vtis Tax Season, April 18, 2016. 
62 


33658A.031

AICPA's Written Statement for the Record 

U.S. House Ways and Means Committee, Subcommittee on Oversight 

December 13, 2017 Hearing on IRS Refonn: TI1e Taxpayer Experience 

Page 3 of5 

2. ms Taxpayer Se1·vice 

Congress and the Administration should determine the appropriate level of service desired and 

needed by taxpayers. Agreed upon measures of success are necessary to improve both 

customer service and voluntary compliance. 

To instill tniSt in the tax administration system, we recommend taxpayer service goals based on the 

following two guiding principles: 

• The IRS should only i.uitiate contact with a taxpayer if the IRS is prepared to devote 

the resources necessary for a proper and timely resolution of the matter. 

• Customer satisfaction must be a goal in every interaction the IRS has with taxpayers, 

including enforcement actions. Taxpayers expect quality service in all 

interactions with the IRS, including taxpayer assistance, filing tax returns, paying 

taxes, and examination and collection actions. 8 

Resources necessary. Appropriate hiring, adequate training, skillful management, and the 

necessary technological tools are essential for the IRS to meet its responsibilities. The leaders 

of the IRS must have the experience and skills to motivate their workforce and lead them to 

the realization of the desired vision. Organizational alignment from Congress, the President, 

the Commissioner, and through the ranks of the IRS, is necessary to delivering the promised 

goals. Congress should determine the appropriate level of sen'ice and compliance they 

want the IRS accountable to provide and then dedicate appropriate r esources for the agency 

to meet those goals. 

Furthem1ore, to enable the IRS to achieve the improvements required for a 21" century tax 

administration system, the IRS needs a modem technological infrastructure. Currently, the 

IRS has two of the oldest information systems in the federal government making the 

information technology functions one of the biggest constraints overall for the IRS.9 Without 

modern infrastructure, the IRS is unable to timely and efficiently meet the needs of taxpayers 

and practitioners. 

Customer satisfaction. Measurement tools are required to achieve CtiStomer satisfaction goals, 

including fairness in enforcement. The IRS made significant progress in measuring taxpayers' 

opinions in the years following the issuance of the Restructuring Commission. However, in 

recent years, the Service has stopped reporting on customer satisfaction surveys and analysis. 

We recommend that customet· satisfaction sut-veys, gauging perfonnance at all levels within 

the IRS, continue as an appropriate success measure. Congress should utilize the survey results 

8 Verbatim quote of the two guiding principles, Tbe National Conunissiou ofRestmcturing the lutemal Revenue 

SeJVice, A Vision for o New IRS Report of the Nntionnl Commission on Restructming the lntemnl Revenue 

Se1vice June 25, 1997, page 23. 9 National Taxpayer Advocate, Ammnl Report to Congress 2016. Executive Summmy: Preface. Svecinl Focus 

qnd Highlights, 2016, page 31-32. Tite report references a 20 16 GAO report (GA0-16-468) which found that 

some of technology the IRS still relies on was first placed in use 56 years ago. 
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AICPA's Written Statement for the Record 

U.S. House Ways and Means Corrunittee, Subcommittee on Oversight 

December 13, 2017 Hearing on IRS Reform: The Taxpayer Experience 

Page 4 of5 

during the oversight and appropriations processes to ensure the agency is continually meeting 

the needs of taxpayers. 

A service-focused approach, with taxpayer education in mind, will require the IRS to take into 

consideration the needs of both tax practitioners and un-represented taxpayers, and the varying 

methods needed to interact with them. 

3. IRS Practitioner Sea·vices Unit 

The IRS should create a new dedicated "executive-level" practitioner services unit that 

would centralize and modemize its approach to all practitioners. Over time, the IRS has 

established a number of functional departments. These individuals are dispersed across the 

IRS and are not coordinated in a manner that enables practitioners to timely access critical 

infonnation (such as, their clients' account status or the availability of dispute resolution 

opportunities). Nor do the current teams or processes systematically solicit, gather or evaluate 

practitioner feedback. Enltancing the relationship between the IRS and practitioners would 

benefit both the IRS and the millions of taxpayers served by the practitioner C·Ommunity. 

A dedicated practitioner services unit would allow the IRS to rationalize, enhance, and place 

under common management the many current, disparate practitioner-impacting programs, 

processes, and tools. Moreover, by centralizing these programs, IRS employees would have a 

consolidated approach to timely resolving issues. This coordination and improved access 

of information would prevent unnecessary delays and inefficiencies (such as, requiring 

pracl'itioners to submit the same infonnation multiple times to multiple IRS employees). 

Finally, to ensure success of the practitioner services unit, it is essential for these services to 

approximate comparable private sector sea·vict:>S and allow practitioners to resolve account 

issues for their clients in a timely and efficient manner. 

Online tax professional account. The IRS should provide tax practtt10ners with a tax 

professional account as part of the IRS's online port al with account access to aU of their 

clients' information (both individual and business accounts) where the practitioner has a valid 

power of attorney (POA) on file. Additionally, the secure tax professional account should 

allow the IRS to communicate directly to practitioners the infonnation necessary to improve 

taxpayer awareness and allow pa·actitiooer correspondence with timely acknowledgement of 

receipt. 

Furthermore, a centralized login system allowing for single sign-on authentication of the 

practitioner and inuuediate access to all client data, as opposed to practitioner authentication 

before accessing each client's account, is an indispensable efficiency for the IRS and 

practitioners alike. 

Secure platfom1. The development of the online portal should include a comprehensive, agile 

platfonn that protects users' identities and their data, detects threats and immediately responds 

to potential security breaches. In order to enhance taxpayer protection, practitioners who want 
64 

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33658A.033

AICPA's Written Statement for the Record 

U.S. House Ways and Means Committee, Subcommittee on Oversight 

December 13, 2017 Hearing on IRS Refonn: The Taxpayer Experience 

Page 5 of5 

access to taxpayer accounts should consent to guidelines such as Circular 230 or other similarly 

approved requirements. Professional tax practitioners can become particularly active and safe 

users of online services if the IRS invests early in providing a digital mechanism for POA 

and disclosure authorization and creates practitioner accounts conTemporaneously with 

individual online accounts. 

To continue to improve efficiency, the IRS should also focus its attention on replacing the 

Centralized Authorization File with a consolidated online solution utilizing electr onic 

signatures and an algorithmic-driven app roval p•·ocess that is as close to real time as 

possible. 

Robust practitioner hotlines. IRS should provide practitioners with a robust practitioner 

priority hotline (or l10tlines) with higher-skilled employees. These employees should have 

the experience and training to understand and address more complex technical and procedural 

issues. This expertise would allow the IRS to focus its training on a particular technical area 

allowing designated employees to resemble its counterparts in the private sector. The IRS 

should also consider hiring experienced people, such as, graduate students or retired 

practitioners seeking part-time or seasonal employment. 

Designated customer service representatives. Under the practitioner services unit, the IRS 

should assign customer ser vice r epresenta tives (also known as a single point of contact) to 

each geographic area to address unusual or complex issues that practitioners were unable to 

resolve through the priority hotlines. We recorrunend allocating the number of representatives 

based on the number of practitioners in a specific geographic area. 

CONCLUDING REMARKS 

The AJCPA appreciates this opportunity to submit a statement for the record. We look forward 

to working with the Subcommittee as you continue to improve the taxpayer experience with 

the IRS. 

The AJCPA is the world's largest member association representing the accounting profession 

with more than 418,000 members in 143 countries and a history of serving the public interest 

since 1887. Our members advise clients on federal, state, local and international tax matters 

and prepare income and other tax retums for millions of Americans. Our members provide 

services to individuals, not-for-profit organizations, small and medium-sized businesses, as 

well as America's largest businesses. 
65 


33658A.034

CEE_1 

STATEMENT OF 

THE COALITION FOR EFFECTIVE AND EFFICIENT TAX ADMINISTRATION 

TO 

OVERSIGHT SUBCOMMITTEE OF THE COMMITTEE ON WAYS AND MEANS UNITED STATES 

HOUSE OF REPRESENTATIVES 

HEARING ON 

IRS REFORM: THE TAXPAYER EXPERIENCE 

Decennberl3,2017 

The Coalition for Effective & Efficient Tax Administration {"CEETA" or the "Coalition"), respect fully 

submits this statement providing its perspective and recommendations with respect to Treasury 

regulations and Internal Revenue Service {the "IRS" or "Service") guidance and procedures for the 

resolution of disputes with taxpayers. We provide a list of particular regulations and guidance the 

Coalition believes require immediate attention by Congress, the Department of the Treasury 

{"Treasury") and the Service, because these items test t he limits of the Service's adherence to its 

mission of fairness in the enforcement of Federal tax laws. 

Additionally, CEETA supports H.R. 3220, the Preserving Taxpayers' Rights Act, a bipartisan bill 

introduced on July 13, 2017, by Representatives Jason Smith and Terri Sewell and referred to the 

Committee on Ways and Means. Bipartisan cosponsors include Reps. Chu, Thompson, Curbelo, Holding, 

Higgins, Jenkins, Reichert, and Kind. Enactment of H.R. 3220 w ill address directly certain concerns with 

current IRS overreach that result in unnecessary disputes with taxpayers that cause inefficiency, 

needless time consumption, and expense for taxpayers and the IRS. 

CEETA is a coalitiOJ) of companies and trade associations tha t seeks constructive administrative and 

legislative changes to ineffective and inefficient IRS practices and procedures• CEETA thanks the 

Committee on Ways and M eans Oversight Subcommittee for t he opportunity to submit this statement 

and expres.ses hope in a continued dialogue with both the Subcommittee and the Committee generally. 

1 The coalition of business organizations comprises: ACT I The App Association; Americans for Tax Reform; Citizens 

Against Government Waste; f inancial Executives International; Information Technology Industry Council; National 

Association of Manufacturers; National Foreign Trade Council; Retail Industry Leaders Association; Small Business 

& Entrepreneurship Council; Software Finance and Tax Executives Council; TechNet; and U.S. Chamber of 

Commerce. 

1250 Headquarters Plaza I West Tower, 7'" Floor I Morristown, NJ 07960 

www.EETAX.org 
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CEE_1 

Revenue Procedure 2016·22 

Revenue Procedure (Rev. Proc.) 2016-22 generally provides a description of the administrative appeals 

process, w ithin the IRS Office of Appeals, for cases docketed in the U.S. Tax Court. CEETA's concern w ith 

this revenue procedure focuses on Section 3.03, which provides: Chief Counsel will not refer to Appeals 

any docketed case or issue if IRS Division Counsel or a "higher level of Counsel official" determines that 

referral is not in the interest of "sound tax administration." 

CEETA opposes any general IRS interpretation of its authority that affords it latitude, limited only by its 

view of what constitutes "sound tax administration," to deny a taxpayer the right to administrative 

resolution of disputes before the Office of Appeals. A taxpayer's right to an independent administrative 

review of proposed examination changes to a taxpayer's liability by t he Office of Appeals is vital to 

efficient tax administration. Both taxpayers and the IRS alike seek to achieve mutually agreeable 

resolution of tax issues by Appeals, t hereby avoiding litigation. Resolution by Appeals conserves 

finances, resources, and time of t axpayers, the IRS and the Federal judiciary. In recent years, use of this 

broad IRS discretion has resulted in heightened Congressional oversight, ultimately weakening taxpayer 

trust in the agency and calling into quest ion the integrity of the tax administrat ion process. Such broad 

discretion allowing the denial by the IRS of appeal rights is in the interest of neither taxpayers nor the 

IRS. If any limitations were to be placed on a taxpayer's right to Appeals, the limitations should be 

particular and narrowly circumscribed by statute (see discussion below of H.R. 3220). Allowing the Chief 

Counsel the unilateral authority to deny a taxpayer a right to have disputes regarding proposed 

examination changes heard by Appeals when, in his or her view it is in the interest of "sound tax 

administration," is a vague and unmoored standard. This provides him or her w ith nearly unfettered 

discretion to deny a taxpayer a right to Appeals for nearly any reason and force litigation at the expense 

of all parties. 

CEETA recommended to both the IRS and the Treasury that Section 3.03 of Rev. Proc. 2016·22 be 

rescinded. 

Treasury Decision 9778 (I.R.C. § 7602) 

On July 14, 2016, the Treasury Department finalized regulations under I.R.C. § 7602 clarifying that 

persons described in I.R.C. § 6103(n) and Treas. Reg. § 301.6103(n)-1{a) with whom the IRS or IRS Chief 

Counsel contracts for services (such as outside economists, engineers, consultants, or attorneys) may 

receive books, papers, records, or other data produced by taxpayers and others pursuant to the IRS's 

administrative subpoena power. Additionally, the final regulations provided that such contractors may, 

in the presence of an IRS officer or employee, participate fully in the interview of a person the IRS has 

summoned as a witness to provide testimony under oath. 

In a letter dated May 5, 2016, addressed to the IRS, CEETA respectfully requested the withdrawal of the 

proposed and temporary regulations (T.D. 9669) issued under section 7602. CEETA believes the final 

regulations fall short on both policy and procedural grounds, thereby failing to promote a more effective 

and efficient tax administrat ion. This regulation delegates, without a statutory basis, inherently 

1250 Headquarters Plaza I West Tower, 7'' Floor I Morristown, NJ 07960 

www.EETAX.org 
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33658A.036

CEE_1 

governmental functions to private contractors. Allowing outside contractors to question summoned 

w itnesses and review summoned documents results in the transfer of control of a tax audit to persons 

not in the employ of the government. Undoubtedly, the regulations will lead to longer, more 

contentious and less efficient examinations. 

Senator Orrin G. Hatch, Chairman of the Senate Committee on Finance, expressed similar concerns 

when the IRS previously hired a private law firm to assist in the income tax examination of a corporate 

taxpayer. In a May 13, 2015, letter to then IRS Commissioner John Koskinen, Chairman Hatch noted that 

the hiring of t he private law firm to participate in the examination (1) appeared to violate Federal law 

and the express will of the Congress, (2) removed taxpayer protections by allowing the performance of 

inherently governmental functions by private contractors and (3) called into question the IRS's use of its 

limited resources. 

Retaining outside lawyers to conduct audits of taxpayers is unprecedented in the history of the Service. 

At least one court has stated that it is "troubled" by the practice, noting, "[t)he idea that the IRS can 

'farm out' legal assist ance to a private law firm is by no means established by prior practice, and this 

case may lead to further scrutiny by Congress." 

On October 2, 2017, under Executive Order 13789, Treasury released its Second Report to the President 

entitled "Identifying and Reducing Tax Regulatory Burdens." CEETA was pleased to learn that the 

Treasury and the IRS are considering an amendment prohibiting the IRS from hiring outside counsel for 

any purposes. According to the report: "Under the amendment currently contemplated by Treasury and 

the IRS, outside attorneys would not be permitted to question witnesses on behalf of the IRS, nor would 

they be permitted to play a behind-the-scenes role, such as by reviewing summoned records or 

consulting on IRS legal strategy". The report further provides at page 4: 

"When the IRS enlists outside attorneys to perform the investigative functions ordinarily 

performed by IRS employees, the government risks losing control of its own investigation. 

IRS investigators wield significant power to question witnesses under oath, to receive and 

review books and records, and to make discretionary strategic judgments during an audit- with 

potentially serious consequences for the taxpayer. The current regulation requires the IRS to 

retain authority over important decisions, but the risk of a private attorney taking practical 

control may simply be too great. These powers should be exercised solely by government 

employees committed to serve the public interest, not by outside attorneys. These concerns 

outweigh any countervailing need for the IRS to contract with outside attorneys. Treasury 

remains confident that the core functions of questioning witnesses and conducting 

investigations are well within the expertise and ability of the IRS's dedicated attorneys and 

examination agents." 

CEETA looks forward to these amendments to the Final Regulations under IRC Section 7602 prohibiting 

the IRS from retaining outside counsel to participate, directly or indirectly, in tax audits. As referenced 

below, it is also important that Congress enact legislation codifying this prohibition preventing future 

administrations from reengaging in such activity. 

1250 Headquarters Plaza I West Tower, 7"' Floor I Morristown, NJ 07960 

www.EETAX.org 
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CEE_1 

H.R. 3220, Preserving Taxpayers' Rights Acts 

CEETA enthusiastically supports the enactment of H.R. 3220 as a step forward in ensuring efficiency and 

fairness in the Service's administrative procedures, as the bill directly addresses CEETA's concerns stated 

above with regard to Rev. Proc. 2016-22 and T.D. 9778, and more. 

The bill would codify a taxpayer's right to an administrative appeal before the Office of Appeals and limit 

such right only in particular instances defined within the statute; there would no longer be any 

discretion for the Service to deny a taxpayer the right to an appeal on the grounds of "sound tax 

administration." Additionally, the bill would statutorily limit the Service's ability to "designate cases for 

litigation," a procedure allowing the Service to deny a taxpayer administrative appeal rights, only in 

certain circumstances where a taxpayer has made use of an abusive tax shelter. 

The bill also modifies the Service's authority to issue "designated summons." Issuance of a designated 

summons under I.R.C. § 6503{j) automatically suspends the period of limitations on assessment under 

I.R.C. § 6501, thereby abrogating a very crucial taxpayer protection. Periods of limitations are a 

cornerstone of statutory law at t he Federal and state level. Periods of limitations ensure that the 

Service, and taxpayers alike, do not indefinitely sit on potential claims; either the Service or taxpayer 

must act within the statutory period or have the potential claim legally foreclosed to further action. 

Suspension of the period of limitation on tax assessments of section 6501 is a serious consequence of 

the Service issuing a designated summons and enactment of H.R. 3220 would establish a check against 

inappropriate use of this authority. The bill provides that the IRS must clearly establish that a taxpayer 

to whom a designated summons is issued "did not reasonably cooperate with reasonable requests by 

t he Secretary for witnesses, documents, meetings, and interviews .... " This requirement does not 

currently exist in section 65030). This is a much needed limitation on t his extraordinary authority of the 

Service to toll the statute of limitation on assessment of additional tax against a taxpayer. 

Finally, H.R. 3220 would amend I.R.C. § 7602 by expressly nullifying the final regulations of T.D. 9778 and 

codify the yet to be issued amendment prohibiting the IRS from retaining outside attorneys to assist in 

tax audits. The bill would amend section 7602 and prevent any person, other t han an officer or 

employee of the IRS o r for the oole purp ooe of oerving ~o ~n expert, to receive ~ny booko, p~pero, 

records, or other data obtained in an examination. CEETA commends the drafters of H.R. 3220 for 

recognizing the final regulations of T.D. 9778 delegated inherently governmental functions to private 

contractors, and correcting the Service's and Treasury's overreach in issuing the regulations. 

Publication of IRS Notices Asserting Future Regulations 

Although not specific to dispute resolution procedures amongst the IRS and taxpayers, CEETA requests 

the Subcommittee consider the following scenario and consider necessary review and oversight. 

There have been several recent occasions where theIRS has issued so-called "Notice" guidance, which 

provides that the Service and Treasury "expect" to issue regulations that incorporate the guidance or 

asserts that the Agency "will amend" existing regulations to incorporate the guidance. See, e.g., Notice 

2016-73; Notice 2012-15; Notice 2012-39; Notice 2014-32. In the case of t he Notices cited, despite the 

passage of time- in some cases several years - the regulations have not been issued. The result has 

1250 Headquarters Plaza I West Tower, 7"' Floor I Morristown, NJ 07960 

www.EETAX.org 
69 

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33658A.038

been that taxpayers often have little practical choice but to follow the Notice guidance as if it were 

regulatory law, despite the lack of compliance with the Administrative Procedure Act's public notice and 

hearing requirement in the issuance of such Notices and lack of the clarity formal regulations would 

provide. See I.R.C. § 7805(b)(l)(C). These Notices have an in terrorem effect and bring attendant 

uncertainty. CEETA views this practice, whether intentional or unintentional, as circumvention of the 

requirements of the Administrative Procedure Act. This is a matter the Subcommittee should look into 

further. 

Conclusion 

CEETA thanks you or your consideration of the above matters. CEETA looks forward to participating in 

any further discussions concerning the issues raised herein or more generally the procedures for 

resolving disputes between the IRS and taxpayers with an eye to minimizing litigation that is 

unnecessary, inefficient, time consuming, and expensive for taxpayers and the IRS. 

Brian Cove 

Managing Director, Technical Activities 

Financial Executives International 

1250 Headquarters Plaza, West Tower, 71h Floor 

Morristown, NJ 07960 

Telephone: (973) 765-1092 

bcove@financialexecutives.org 

1250 Headquarters Plaza I West Tower, 7"' Floor I Morristown, NJ 07960 

www.EETAX.org 
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33658A.039

6NTEU 

Anthony M. Reardon 

National President 

National Treasury Employees Union 

Statement for the Record 

For 

House Ways and Means Oversight Subcommittee Hearing 

on IRS Oversight 

December 13, 2017 

1750 H Street, N.W. • Wasbing10n. D.C. 20006 • (202) 572-5500 
71 


33658A.040

Chainuan Buchanan, Ranking Member Lewis and distinguished members of the 

subcommittee, I would like to thank you for allowing me to provide comments on the taxpayer 

experience with the IRS. As President of the National Treasury Employees Union (NTEU), I 

have the honor of representing over 150,000 federal workers in 31 agencies, including the men 

and women at the IRS. 

Mr. Chai.m1an, providing quality taxpayer service is a critical component of the IRS' 

efforts to help the taxpaying public understand their tax obligations while making it easier to 

participate in the tax system. Through a variety of in-person, telephone and web-based methods, 

the IRS seeks to help taxpayers navigate an ever increasingly complex tax code and prevent 

inadvertent noncompliance. Unforllmately, the IRS' ability to provide excellent taxpayer service 

has been severely challenged due to reduced funding in recent years. Without additional 

resources, fiuther degradation in taxpayer services will occur that adds risk to our voluntary 

compliance system. 

Impact oflnadequatc Funding on Taxpayer Services 

Since FY 2010, overall funding for the IRS has declined by more than $900 million, or 

I 7 percent when adjusted for inflation, while the number of individual taxpayers has increased 

by I 0 million, or more than 6 percent. These t·eductions have forced the Sen , ice to reduce the 

total number of full-time, pet·manent employt'es by almost 21,000, and resulted in a 

reduction in the number of employees assigned to answer telephone calls ft·om 9,400 in 

2010 to 6,200 in 2015, a 34% drop. 

ln the past few years, many experts in the tax c-ommunity, including the National 

Taxpayer Advocate, IRS Oversight Board and the IRS Advisory Council have all warned of the 

dangers ofunderfunding the IRS and the adverse impact it has had on taxpayer service. 

In her Annual Report to Congress released earlier this year, National Taxpayer Advocate 

Nina Olson identified insufficient funding of the IRS as one of the most serious problems facing 

taxpayers. According to Olson, the lack of adequate funding, coupled with a rising workload has 

had a devastating impact on IRS taxpayer service. Among the report's findings are: 

• Last year, only 61 percent of calls from taxpayers seeking assistance reached a customer 

service representative (CSR), leaving 20 million taxpayers unable to get through- that is 

a decline from 87 percent a decade earlier, with half the decline occurring since 20 I 0; 

• Taxpayers who did get through had to wait on hold approximately 17.6 minutes before 

speaking with a CSR. That's up from 2.6 minutes ten years earlier, a nearly six-fold 

increase, with nearly half the increase occurring since FY 20 I 0; 

An 86 percent drop in tax law questions answered from 795,000 10 years ago to only 

110,000 in the 2013 tax-filing season; 

• A cut of87 percent, from $172 million in 2010 to just $22 mill.ion in 2013 for employee 

training. 

• The IRS historically has prepared tax returns for taxpayers seeking its help, patticularly 

for low income, elderly, and disabled taxpayers. Ten years ago, it prepared some 

476,000 returns. That number declined significantly over the decade, and the IRS no 

longer prepares returns at all; 
72 


33658A.041

• Last year, the IRS received about 8.4 million letters from taxpayers responding to 

proposed adj ustments to their tax liabilities. As of the end of the fiscal year, 53 percent of 

taxpayer letters in the fRS 's "adjustments" inventory were considered "over age" 

(generally, more than 45 days old). ·nat compares with "over age" percentages of I 2 

percent ten years earlier and 28 percent in FY 20 I 0; 

At the same time, the number of individual tax retums grew from 131 million in 2004 to 

more than 150 million in 2016, an almost 13 percent increase; 

• Additionally, because funding reductions forced the IRS to shorten the period of 

employment for their seasonal employees who help answer taxpayer correspondence, the 

IRS' inventory of correspondence from taxpayers in 2014 and 2015 grew significantly 

above what it nonnally would have been to more than 900,000. 

For FY 2016, the IRS was provided with $290 million to improve the customer service 

representative level of service (LOS) rate, among other things. With $178 million of this 

additional funding, the IRS was able to hire an additional 1,000 extra temporary telephone 

assistors which helped the IRS raise the phone level of service to 72 percent during the 2016 

ftling season. Furthermore, taxpayers waited on average about II minutes to speak to an 

assistor, a dramatic improvement from the 23 minute average wait time during the previous 

filing season. The additional funding also freed up more resources to help the IRS reduce the 

correspondence inventory to 690,000 by the end ofFY 2016, a drastic reduction from just two 

years prior. However, when the temporary employees went off the rolls at the end of the 2016 

fil ing season, the phone LOS dropped, and the average for all of FY 2016 ended up at 53 

percent. 

Section 113 of the FY 2017 Omnibus Appropriations Act also included the $290 million in 

funding to raise the phone LOS, among other things. With a portioo of this funding, the IRS was 

able to raise the LOS during the 2017 filing season to 79 percent (up from 72 percent during the 

2016 filing season), and set a target of 64 percent for all of FY 2017. 

NTEU was disappointed to see that neither the Administration's FY 2018 budget request, nor 

the House or Senate FY 2018 FSGG bills, included the $290 million in targeted Section 113 

funding to raise the phone level of service. Furthennore, the Admioisll'ation actually pl'oposed 

a $239 million 1·eduction in taxpaye1· se1-vices seasonal staffmg costs and a loss of roughly 

2,200 FIEs. Without this critical funding and necessary staffing, the IRS projects an overall 

phone LOS for FY 2018 of just 39 percent, a drop of25 percent from the FY 20171evel. While 

tbe House and Senate FY 2018 FSGG bills would increase base fundiog for taxpayer services 

over the FY 2017level, the proposed overall reductions of$155 million (House) and $124 

million (Senate) to the IRS for FY 2018 will require the IRS to divert some of their limited 

taxpayer service funding to other w1derfimded activities and programs. Without the full $290 

million in targeted funding, critical gains made by the IRS in improving the phone LOS will be 

reversed, resulting in longer taxpayer wait times and inability of taxpayers to resolve their tax 

questions in a timely manner. 

2 
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Impact on Taxpayer Identity Theft Assistance 

As stated previously, the importance of quality taxpayer assistance is critical to ensuring 

taxpayers are able to navigate the complex tax code and understand and meet their tax 

obligations in a timely manner. But, it is also vital that the IRS has tbe resources to provide 

assistance to those who have been victimized by fraud, and in particular, identity theft. The need 

to provide timely assistance to victims of identity theft is clear. According to the IRS, the number 

of people who reported to the IRS that they were victims of identity theft grew from 233,365 in 

2012 to 698,700 in 201 5, an increase of almost 200 percent. 

Identity theft cases are extremely complex and resolving these cases in a timely manner 

can be difficult as they often comprise multiple issues over multiple tax years. Recognizing the 

need to address the rising incidence of identity theft and provide victims with the assistance they 

need, the IRS has increased the number of employees dedicated to working identity theft cases. 

The IRS also provided updated training to telephone representatives who deal witb identity theft 

victims on a daily basis so that they better understand the serious financial problems of identity 

theft victims and maintain the proper level of sensitivity when working with them. 

And while tbe IRS is doing what it can to prevent identity theft, resolve cases in a timely 

manner, and provide its victims with the assistance they need, its ability to do so has been greatly 

diminished due to recent nmding cuts. 

Impact on IRS' Ability to P1·ovide Face to Face Service 

Many taxpayers with tax problems still want to talk to an IRS employee face-to-face. 

However, if the IRS is forced to continue absorbing drastic cuts to its budget, fewer and fewer 

taxpayers will have that opportunity. 

According to TIGT A, funding reductions have already forced the IRS to reduce the 

number of taxpayer assistance centers (TACs) from 401 to 376 since 20 11. In addition, 22 TACs 

have no staff, while 95 have only one employee, and the IRS is considering closing a significant 

number of additional TACs through FY 2018. Because of its new "appointment only" policy, the 

IRS is projecting that the number of taxpayers visiting a T AC will decline from about 5.6 million 

in FY 2015 to 3.5 million tb.is year. 

The National Taxpayer Advocate has previously warned that limited resources were 

impeding IRS' ability to provide taxpayers with the in-person assistance they need. For 

example, she has repeatedly warned staffing levels at TACs across the country are woefully 

inadequate. 

Inadequate staffing and availability of service at T ACs has long been a problem at the 

IRS and disproportionately impacts the most vulnerable populations who use T ACs most often, 

including non-English speaking taxpayers, the elderly and low income individuals and families, 

who often need additional assistance in understanding and meeting the ir tax responsibilities. If 

these taxpayers are not provided the assistance they need to understand their tax obligations, they 

may inadvertently file an incorrect return which could necessitate the need for IRS to undertake 

post-filing actions that are costly and burdensome to both the taxpayer and the IRS. 

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Taxpayers' inability to get the answers they need to understand complex tax issues will 

almost certainly impact the accuracy of their rentms, which could delay refunds to the many 

taxpayers that depend on their refunds to pay their bills and meet other financial obligations. 

While retums without any issues may be processed in a timely manner, those retums that are 

kicked out of the automated process will have to be worked by an understaffed IRS workforce 

which is down more than 20,000. A lack of adequate staff to handle these rentms will almost 

iJtevitably lead to substantial delays in processing refunds for those taxpayers, delayi.ng the 

financial relief they may require. 

With taxpayers unable to receive the assistance they need to resolve their tax questions 

and accurately prepare their returns, many may be forced to tum to paid preparers for help, 

resulting in additional expenses for them to simply comply with their tax obligations. 

NTEU strongly believes that limiting the amount of live assistance to taxpayers that are 

actively seeking assistance with their tax related issues will be detrimental to efforts to increase 

compliance with our nations' tax laws, and only serve to harm those taxpayers that rely on the 

assistance of qualified and experienced IRS employees to understand and meet their tax 

obligations. 

TAX REFORM 

Mr. Chainnan, I would be remiss if! didn't mention ongoing efforts in Congress to 

consider the most extensive change in tax law since the "Tax Refonn Act of 1986." Should 

House and Senate negotiators agree on a final proposal to drastically reform the U.S. tax code, 

implementation of the proposal will fall almost entirely on the IRS. In order to implement tax 

refom1 legislation and assist the taxpaying public, IRS must, among other things, extensively 

reprogram its computers, develop new regulations and tax forms, educate taxpayers and the tax 

practitioner c.onmmnity so they can understand and comply with the new tax law, respond to 

what is expected to be a significant increase in. taxpayer requests for direct assistance, and train. 

IRS employees. 

Unfortunately, little attention is being paid to the tact that the IRS will be charged with 

implementing the biggest overhaul of the U.S. tax code in 30 years, nor has any consideration 

been given to ensuring TRS bas the resources necessary to carry out tlus monumental task. As 

noted previously, pending FY' 18 appropriations bills in. the House and Senate would actually 

decrease overall funding for the IRS by more than S I 00 million, resulting in the further loss of 

employees that would be central to IRS efforts to implement tax refonn. 

As with a ll statutory mandates, despite the absence of sufficient funding to carry out tax 

reform, the IRS will have to prioritize implementation wluch could result in the IRS being forced 

to divert resources from other critical enforcement and taxpayer service programs and defer 

investing in or upgrading its existing aged IT infrastmcture. 

Contrast this with the approach taken by the Administration and Congress after passage 

of the 1986 Reform Act when both acknowledged the vital role the IRS would play in 

implementing tbe new law and provided the agency with additional funding for 

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FY 1997 and FY 1998. With the additional funding, the IRS was able to increase overall staffing 

tor taxpayer service positions by more than 2, I 00 between 1986 and 1988, thereby allowing the 

IRS to better meet the considerable demand from taxpayers, businesses and other stakeholders 

tor assistance in interpreting the new tax law. 

NTEU was pleased to see the Senate tax reform proposal includes language expressing 

tbe need to improve IRS customer service and protections for taxpayers by reinstating 

appropriate IRS funding levels. In particular, the language "expresses the sense of the Senate that 

politically motivated budget cuts are counterproductive to deficit reduction, diminish the IRS's 

ability to adequately serve taxpayers and protect taxpayer information, and reduce the IRS's 

ability to enforce the law." We strongly urge Congress to include this language in its final tax 

legislation and to ensure that any fmal FY' 18 funding agreement provides the IRS with the 

necessary resources to implement any proposed changes to the tax code and to carry out their 

taxpayer service and enforcement mission. 

Mr. Chainnan, thank you again for the oppornmity to provide NTEU's views on IRS 

taxpayer service. NTEU believes that only by restoring funding for effective taxpayer service 

programs can tbe IRS provide taxpayers with the assistance they need to understand and meet 

their ta;'l obligations, combat identity theft through fraud prevention and victim assistance and 

maximize revenue collection that is critical to reducing the national deficit. 

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