Ad Hoc Issue Committee Minutes

Taxpayer Advocacy Panel
Committee’s Face-to-Face Meeting in Washington, DC
June 15-17, 2006

Day #1, June 15, 2006 -IRS Headquarters Office, Room 6718

Designated Federal Official (DFO)

• Nancy L. Ferree, TAP Program Manager, Plantation, FL

Members Present

• George Bates, Great Fall, MT, Vice Chair
• Emilio Cecchi, North Bethesda, MD
• JoAnn Davis, Scott Depot, WV
• Margaret Ferguson, Vista, CA
• Dorothy Havey, Lincolnville, ME (except 06/17/06)
• Gim Hom, Acton, MA
• Patrice Marker, Davie, FL, Chair
• Donald Miller, Loudon, TN
• Willy Nordwind, Scottsdale, AZ
• Ralph Rivera, Garland, TX

Members Absent

• Rashidah Abdulhaqq, Cleveland, OH
• Larry Combs, Yuba City, CA

IRS Program Owner(s)

• Laura Baek, Taxpayer Advocate, Attorney Advisor (06/16/06)
• Marilyn Correa, Multilingual Initiative (MLI)
• Bob Erickson, Senior Technical Advisor (06/15/06)
• Sandy Kopta, Chief of Individual Tax Forms & Publications (06/16/06)
• Bridget T. Mallon, Taxpayer Advocate, Attorney Advisor (06/16/06)
• Sue Sottile, Director of Tax Forms & Publications (06/15/06)
• Karen Tober, Legislative Liaison, DC (06/16/06)

Staff Present

• Inez E. De Jesus, TAP Program Analyst & Note Taker
• John Fay, TAP Senior Program Analyst, National Office

Welcome and Announcements
Chair Patrice Marker opened the meeting by welcoming everyone to Washington, DC, and inquired about members’ hotel accommodations.

DFO Ferree informed everyone to return their travel expense forms with original hotel receipt(s) to her after the meeting in order that TAP Secretary Jenny Reyes may begin the travel reimbursement process.

The option of “Direct Deposit” was discussed and some members indicated that they were interested in obtaining the form. It was agreed that this form will be placed on TAP Speak for members’ convenience.

DFO Ferree explained what was going on with the Recruitment process for New Panel Members and that soon those who volunteered to help with the interviews will be contacted with specific information; she expressed appreciation to those who volunteered.

Roll Call-Confirm Quorum
Quorum of 7 was met; 10 members present.

Review and Approve Minutes of May 11, 2006
Minutes were approved by consensus.

Return Preparer Regulations (Issue # 3924)
Dorothy Havey shared what had transpired when she and other panel members met with the IRS Commissioner Mark Everson on April 20, 2006, regarding regulations, and the practice by attorneys, CPA’s and Enrolled Agents before the IRS.

Committee agreed that in order to deal with the fraud issue, there is a need to create a set of standards for tax preparers.

Don Miller shared that the Area 4 committee had elevated RAL (Refund Anticipation Loans) problems in the past.

The Ad Hoc committee will be reviewing Circular 230, Regulations Governing the Practice of Attorney, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service, and provide feedback via the Joint Committee to the IRS Commissioner. The committee will be breaking out in groups later on to address this matter and to finalize the position paper.

Meeting Objectives, Program Owners, Tax Forms & Publications Director Sue Sottile & Senior Technical Advisor Bob Erickson- Review Form 1040 Project (New Issue # 3922)
Sue Sottile began by thanking this panel for their feedback which she and her staff have found quite valuable. She shared that it is premature at this time to review the 1040 product, and that the goal is to keep the form at two pages it will be more user friendly. Ms. Sottile will be utilizing this panel for further feedback in the near future.

In the interim, this new issue will be placed in parking lot status.

Senior Technical Advisor Bob Erickson updated the panel on several of the 2006 tax changes and how it related to tax forms. He shared that there has been 4 different tax code changes within the last 9 months. The following are highlights of information he shared, and he informed everyone that detailed information will be available around Mid July-August 2006, on the irs.gov website:

• Roth 401K

• Children's tax has changed from 14 to 18 years of age.

• Form 5695, Residential Energy Credit Carry forward

• Form 8910, Alternate Motor Vehicle Credit- this form has all the information regarding hybrid cars and gas station owners will be eligible for tax credits.

• New Telephone Credit- a one time deal; after July 31, 2006, you will no longer be taxed.

• New Form 8913- tax credit.

• New Form 1040-ez

• New Form 8888, will allow you to split your refund up to 3 accounts; you will need the routing and account number. Sottile will be sending out the draft forms link to all. (Action item for Sue Sottile).

Wrap Up of Day One
The agenda for the next day was reviewed by all before the meeting was adjourned by the Chair.

Day #2, June 16, 2006-IRS Headquarters Office, Room 6718
Quorum of 7 was met; 10 members present.

National Office Representative Comments-John Fay
John Fay provided feedback and a “Welcome to DC Greeting” on behalf of TAP Director Bernie Coston.

• Fay shared that the annual meeting this year will be held during the week of December 11, 2006, at the same hotel as before, The Hyatt. A pamphlet with pertinent information will be put together by the DC Staff and shared with all prior to this event.

• The Town Hall Meeting (last of the series) held in Cincinnati was very successful.

• Regarding Recruitment, 750 applications have been received. There are 1,000 applications still in draft form but not completed. We have experienced some technical glitches within the website. There are 27 vacancies in 20 states. The best qualified process will be used. The National Taxpayer Advocate, Commissioner’s and Treasury approvals will be required. The final selections should be made in time for the annual meeting.

• Bernie thanks everyone for all of their hard work.

Meeting Objectives, Program Owners-Multilingual Initiative Issue (MLI) Needs Assessment- Policy Analyst Marilyn Correa (Issue 3303-Active Issue)
Marilyn Correa opened the meeting by requesting if anyone needed a copy of the presentation, to please let her know and it will be made available. She shared how Executive Order 13166 requires federal agencies to ensure Limited English Proficient (LEP) taxpayers meaningful access to taxpayer products and services. The Department of Justice oversees that all the federal agencies comply.

Correa also shared how demographic studies (Customer Base Report) had been conducted in the past. Currently there are tax forms and publications in Spanish and Over the Telephone Service. Where are the LEP’s located? It’s a growing population. These are now referred to as “ethnic islands.” Action item for Inez: send a copy of the Customer Base Report to George Bates as per his request.

Findings based on Census data have shown that the greatest area of demand is as follows:

Top 10 States with LEP’s:
California, Texas, New York, Pennsylvania, New Jersey, Massachusetts, Washington, Illinois, Virginia, and Florida.

Chinese population:
California, New York, Florida, Massachusetts and Illinois.

Vietnamese population:
California, Texas, Florida, Massachusetts and Washington.

Occupations:
Chinese restaurants, cooks, sewing machine operators and nail salons. The average income is $59,000.

A discussion was held regarding foreign brochures and their availability- Correa is to follow up on this, as well as checking out Taxpayer Assistance Centers (TAC’s) to see if these brochures are available at these locations. Margaret Ferguson stated that she has not seen these yet in her local TAC.

Publication 4134, which lists all the Low Income Tax Clinics (LITC’s), was shared with all those present.

Correa also shared that Publication 1546, The Taxpayer Advocate Service of the IRS- How to Get Help With Unresolved Tax Problems, has been translated into various languages.

Findings have resulted in learning that assistance is needed for LEP’s and that most of this population relies on churches and friends for tax information.

Correa promised to send copies of the PowerPoint Presentations to the entire committee after she returns to her office, since the proper equipment was not available during the meeting sessions. (Action item for Correa)

Sub-committees to Work Independently with Program Owners on Specific Issues (Marilyn Correa)- during the workout sessions, the sub-teams broke out and worked on their individual issues. The MLI team is composed of: Nordwind, Havey & Abdulhaqq (not present)

The Forms & Pubs team is composed of: Cecchi, Hom, Miller, Rivera & Combs (not present)

Financial Literacy Toolkit Presentation (Issue # 3923) conducted by Bridget T. Mallon, Taxpayer Advocate, Attorney Advisor
Ms. Mallon was accompanied by Karen Tober, Legislative Liaison, and Laura Baek, TAS Attorney Advisor; Ms. Mallon provided the committee with an update on the National Taxpayer Advocate’s project to assist those individuals who are financially illiterate. This is also known as the Financial Literacy Toolkit.

This toolkit will have in-depth information on a number of topics including Individual Taxpayer Identification Numbers (ITINs), Refund Anticipation Loans (RAL’s), Earned Income Tax Credit (EITC), Low Income Taxpayer Clinics (LITCs), banking services, and other pertinent information for this population.

The Financial Literacy Toolkit will be available in English and Spanish and in electronic and paper format for both Practitioners and Individuals. The toolkit will be used by both TAS and IRS personnel in their partnering efforts with outside stakeholders who deal with Spanish speaking LEP taxpayers. There will be focus groups at the upcoming Tax Forums.

The importance for understanding taxes and educating people up front is crucial. This population needs to know where they can get the necessary information so that they may be in compliance with their tax obligations, etc.

Ms. Mallon requested that this committee review the “Financial Literacy Toolkit” and get back to her via the TAP Support Staff with their input by no later than September 30, 2006. (Action Item for the entire Ad Hoc Committee)

Also, as brochures are created, this committee’s review of these documents and feedback will be welcomed.

The committee requested that the paper documents regarding the Financial Literacy Toolkit be made available to them. (Action Item for Inez)

A question arose since Area 7 had also been addressing the Financial Literacy Toolkit, and which committee should be working it.

The committee expressed their appreciation for this presentation.

This new issue will now be placed in Active Status.

Sandy Kopta, Chief, Individual Tax Forms & Publications – Presentation
Ms. Kopta provided the committee with an overview of the branch she manages with 38 employees; not all of these are Tax Law Specialists.

The latest information on Publication 17, Your Federal Income Tax Guide, was shared.

Since times are changing, the IRS is providing forms and publications to the public in CD and DVD format.

Return Preparer Regulations (Issue # 3924)-Continued
The subcommittee took the time to work on drafting the position paper on this subject matter during the breakout sessions. The subcommittee addressed the Why, What, and How To as they worked on this issue.

The subcommittee finalized the position paper and it was agreed that Nancy Ferree is to email it to all upon her return to the office on Monday; any comments are to be sent to the Chair. (Action item for Nancy L. Ferree)

Action item for Inez: Margaret Ferguson asked: “What is the dollar amount for litigation regarding fraud conducted by preparers who violate Circular 230 regulations?”

MLI Needs Assessment Report on Progress & Action Items
Correa gave background information from last year.

“What do we want to do for the Asians?” This is where the team is at now.

“What Recommendations do we want to make to the IRS to benefit Asians?”

Correa suggested that the committee follow the steps for what was done for the Spanish population. (This was very costly)

“What forms/publications can be provided to the Asians?”- Comment was made that this is a higher income and more literate population. What are the communication needs for this population?

A brainstorming session followed, and the following are highlights of what was discussed:

• Basics of Tax Processing- “Why Should I pay Taxes?”- “EITC 2005”- “Understanding IRS Notices” and “Getting Help with Unresolved Problems”- these brochures were already translated.
• Attention getting is important; Public Service Announcements in native language, and in ethnic islands.
• Alliance of English as a Second Language (ESL), Churches, LITC.
• “What do I need to do?”- For Compliance Purposes
• “Where do I go to get help?”- “Who Can I Go To that speaks my language and English and knows about taxes?”
• IRS does not share information with INS.
• Phoenix Tax Organization Plan (Asian/Russian)
• Search link on irs.gov
• A link with “click here for a specific language”
• Specific language over the phone only at a Taxpayer Assistance Center
• Seek organizations we can partner with
• Radio shows, community service. A call in program with media assistance.
• Social services alliances that service some ethnic islands.
• U.S. Citizen Test Consultant
• International Rescue
• Catholic assistance
• Department of Education, Immigration, PBS
• Student population, concise, informative, credits and deductions is what they wanted
• Self-employed
• Retirement, IRA, Roth information
• Financial Literacy Toolkit
• Business Ad in various languages
• Coloring Book about taxes for kids
• Radio stations in ethnic islands and banks in ethnic islands

Correa mentioned that she will be attending the Tax Forums this year in:

Chicago, July 11-13, 2006
Orlando, August 1-3, 2006
Las Vegas, August 22-24, 2006
New York, August 29-31, 2006

There will be MLI focus groups at the tax forums on Thursdays, beginning at 9:00am. Practitioners are asked for feedback at these forums. Correa extended an invitation to the Ad hoc to participate at one of the tax forums that would be nearest to the panel member’s residence due to budget concerns. Action item for Nancy Ferree: obtain approval from TAP Director.

An opportunity to review DVD on “How to Prepare a 1040 Tax Return” in English and Spanish will also be taking place at the tax forums.

Sub-committee’s Breakouts
During the meeting, sub-committees broke away from the general session in order to work on their individual issues.

Wrap up Day Two
The agenda for the next day was reviewed by all before the meeting was adjourned by the Chair.

Day #3, June 17, 2006-One Washington Circle Hotel, Zenith Room
Quorum of 7 was met; 9 members were present. (Dorothy Havey was not present on this day.)

The agenda for this day is to finalize Issues

Tax Forms & Pubs Report on Progress & Action Items
Review Recommendation/Proposal Form (Don Miller)
Don Miller addressed Ad Hoc’s recommendation process and proper form to use.

The committee agreed that they will be using the format that was used with Issue 3811, Review Publication 553, Highlights of 2005 Tax Changes; the format agreed to allows room for Comments as well as for the Proposed Recommendation portion.

Review/Approve Proposal Issue 3905- On-Line Pub 17
The draft proposal – On-Line Pub 17 was reviewed and the committee made some changes/the Quality Review Team provided their input as well- Action item for Inez: Inez is to update the document and share with all before this is elevated to the IRS Program Owner. The committee agreed that email will be used as a means of sharing this information before it is forwarded.

Sub-committee’s Reports

• MLI- Willy Nordwind gave a brief review of the status of the recommendation that was created during the past 2 days. Action item for Dorothy Havey: Share the draft recommendation with the entire committee on Monday, June 19, 2006.

• Return Preparer Regulations- the committee will review the draft position paper that was created during the past 2 days and comments will be forwarded to the chair.

Wrap Up Day Three:
Since the TAP committees will continue to meet beyond September 2006, without a break in dates as used to be the practice, this committee agreed on the following dates for meeting during October and November:

• October 12, 2006, 2:00 - 3:00 PM ET- Teleconference
• November 9, 2006, 2:00 – 3:00 PM ET- Teleconference

DFO Ferree advised the committee to pencil in on their calendars the Week of December 11, 2006 for the TAP Annual Meeting in Washington, D.C. New Members will be participating at this event; further detailed information regarding travel days is forthcoming.

Members were also reminded to fill out the Meeting Survey; the feedback received will be instrumental when coordinating future face-to-face meetings.

Some committee members shared that they have been experiencing problems with TAPSpeak. It was learned that the Communication Committee is currently addressing this. The Committee requested that information be sent to them by email and then archived on TAPSpeak.

Chair Patrice Marker shared her Monthly Report to the Joint Committee and it was agreed upon that as long as the panel has comments, with no recommendations, a cover letter is no longer needed; Inez is to transmit suggestions to the program owner via email without a cover letter.

A question arose regarding SAMS, Systemic Advocacy Management Systems, and Action item for Inez is to send the link to the panel members. (The program was explained to all.)

Public Input
None during the past 3 days

Chair Patrice Marker adjourned the meeting and wished everyone a safe trip back home.

Next Meeting via Teleconference: July 13, 2006 at 2:00 PM ET

Certification: These minutes were approved by consensus by the TAP Ad Hoc Committee on: August 10, 2006.