Area 1 Committee Meeting Minutes

June 20 and 21, 2003
Andover, MA

June 20, 2003

Opening of the Meeting
Chairperson Fish opened the meeting at 1:00 PM EDT by welcoming all members and participants.

Roll Call

Panel Members Attending

• Elizabeth Brodbine-Ghoniem, MA
• Walter Fish, NY, Chair
• William Gedge, CT
• Peter Gorga, Jr., NY, DFO
• James Grimaldi, NY, Vice Chair
• Catherine Kelly, ME
• Diane Mignano, RI
• Paul Nagel, NY
• Eileen Shuman, VT
• Charles Silva, MA

Panel Members Absent

• Abigail Alicea, NH
• Aimee Brace, NY
• Shamsey Oloko, NY

TAP Staff Attending

• Frederick Benoit, TAS Group Manager
• James Cesarano, Program Analyst
• Judith Howard, IRS Governmental Liaison
• Marisa Knispel, TAP Program Analyst
• Sandra Ramirez, TAS Senior Analyst
• Thomas W. Sawyer, TEC Tax Specialist
• Deryle Temple, TAP National Director

Meeting Minutes
The minutes of the May 27th meeting were approved by consensus.

TAP National Director
Director Temple welcomed all members and participants. She shared the information on the selection of new TAP manager Sandra Ramirez who will be working in the Brooklyn office with Analyst Knispel. She offered Ms. Ramirez's office phone number. She also informed committee of the selection of new management assistant Meredith Odom to the staff. Director Temple thanked Analyst Marisa Knispel for her outstanding job in handling the Area 1 program as well as other committee's for a year in spite of lack of staff support. The Director explained that she would request that TAP managers share the program's Federal Register Notices with other IRS organizations to invite their participation. That said, Chair Fish asked that IRS participants introduce themselves.

New Issues
Chair Fish shared with the group issues collected by TAP analysts from calls to the ASPECT toll-free line. Other members had issues to share. Member Gedge assisted the committee by making a list of issues as they were discussed.

Member Shuman shared the issue of a taxpayer she met at the Vermont Employer Seminar.The taxpayer, an employer, was concerned about the guidelines provided in Circular E which states that an employer should not change an employee's name on the records unless that employee had the name changed with the Social Security Administration. The Form W-4 requests that the name be consistent with the social security card, and it states that if card and name do not match, the employer should contact SSA. This Vermont taxpayer asked what the correct procedure was to an SSA employee present at the seminar. That SSA employee responded that the W-4 is not his agency's form. The taxpayer is now confused on what her responsibilities as an employer are. The committee discussed the dilemma and agreed with Shuman that the responsibility should not be that of the employer. DFO Gorga explained that SSA is responsible for providing correct and updated data to the IRS. Ramirez stated that the statement provided by this taxpayer did not provide sufficient information. After further discussion, the members agreed that the issue should be referred to the Payroll Issue Committee.

Shuman presented a second issue. The check box on the Form 1040 is valid only up to the due date of the return. After this date, a Power of Attorney (F2848) is required. A particular accounting firm found out what the issue was when they tried contacting and discussing a client's issue with IRS. They believe that this procedure on the check box should be revised being that most IRS notices are sent to taxpayers past the filing due date. Nagel explained that the Area 3 Committee is currently working on the checkbox issue. Thus, this issue will be referred to that committee.

Shuman's third issue dealt with the health insurance deduction that self-employed taxpayers may take as an adjustment to their gross income. A self-employed individual wrote to Shuman expressing his view that this deduction should be permitted to those individuals who are employed but whose employers do not provide health insurance. This situation is happening more frequently within the corporate world. Director Temple indicated that since this is a legislative issue, it should be referred to the Systemic Advocacy Program. After some discussion on the issue, all members agreed to the referral.

Chair Fish explained that at the Joint Committee meeting, the TAP Chair asked that all current issues be finalized before new submissions are made. Fish said that our committee is doing very well since we have been completing most issues and forwarding their recommendation proposals. Gedge pointed out that he feels there is nothing wrong with adding issues and keeping them within the committee for further discussion at a later time.

Member Ghoniem talked about the fee of $150 requested when submitting an Offer In Compromise to the IRS. Only when the taxpayer is below the poverty line, this fee is forgiven. The intent of the fee is to discourage frivolous offers. Area 7 Committee is currently working on this issue. Director Temple explained that National Taxpayer Advocate Nina Olson is very interested in this issue and currently working on the OIC Program. DFO Gorga further explained this fee and the OIC Program. After all discussion, the members agreed to refer this issue to the Systemic Advocacy Program for follow up.

Ghoniem discussed the Individual Taxpayer Identification Number (ITIN). She shared the anecdote of a taxpayer who had an ITIN and later received a Social Security Number (SSN). Mistakenly, she gave her ITIN to her employer who thought that the taxpayer had fraudulent intentions. Director Temple gave information on the ITIN. Ghoniem said that the issue with the ITIN is an education issue. There should be more education to the public on the ITIN and its purpose. Director Temple explained that NTA Olson is concerned about the ITINs that were issued by IRS and their accountability, mainly in this atmosphere of world terrorism. Ghoniem agreed and added that the fear factor in using the ITIN is a concern of taxpayers who believe that the information may be shared with the INS.

Following this discussion, Ghoniem talked about her involvement in the Multilingual issue Committee and a Low Income Tax Clinic (LITC) in the Boston area.

The next issue on the table was that of tracking the estimated tax payments that a taxpayer makes throughout the year. TEC Specialist Sawyer indicated that one way to track these payments is by making them electronically. EFTPS vendors are available for this payment system, Sawyer said, and the bank withdraws the payment on a specific date. Starting June 13, 2003 the EFTPS system is making this process available as an added benefit. The problem, if the payment is made after the final date for the year (April 15th in most cases), the system does not account for late made payments. DFO Gorga suggested this is a good issue for the committee to consider: to extend the time allowed for electronically-made ES payments to twenty-four months to allow for those taxpayer who file with extensions.

After a short break, Ghoniem shared feedback from Bentley College (LITC). They expressed that their local TAS office is excellent in responding to their issues timely and appropriately.

Member Kelly presented her issue on the case of a fourteen-year old newspaper carrier who came with his mother to prepare a tax return to a VITA site. The mother had received different interpretations from IRS personnel of the law indicating the responsibility of self-employment tax under the age of eighteen. Taxpayer was referred to Circular E and Publication 533 for Self-Employment. Kelly researched both publications and believes that they are not clear on the rules to follow. She found an article in the Digital Daily that states that taxpayers under the age of 18 are not subject to self-employment, but believes that the publication 533 should be more clearly defined. Chair led discussion on the issue and all members agreed to follow up as issue for the committee. Kelly and Shuman will work jointly on this project.

Grimaldi briefed committee on issue of 9/11 grants. He explained that he still receives contacts from business owners affected by this issue. He explained about the guidance he was given in dealing with issue due to its legislative nature. For example, he stated his involvement with Congresswoman Maloney who is also interested in this issue. Director Temple indicated that committee members may be able to talk to press after group consensus and the group reaches a consistent message. Director is working with NTA on the proper procedures of TAP's involvement with the media. She explained that members are not prohibited from talking to media but TAP needs to set up proper procedures and guidelines to prevent a member to act as a lobbyist.

Member Kelly shared an outreach concern on the issue of the EITC. She had previously sent all committee members and email on Form 8867. This is a form used by tax practitioners to inquire on a client's claim to the EITC. This form is part of Publication 3107 and it is used for practitioners' due diligence. She stated that it seems that some practitioners are aware of it which a source of concern to the EITC Issue Committee. Some software companies also do not seem to include it. Her email, she stated, had not been answer by any of the members. She asked again that members provided their input. She also asked that Area members take the opportunity to ask about EITC problems and suggestions, as well as Form 8867, during their outreach opportunities. Ghoniem, who will soon participate in an outreach for her LITC, will definitely do so. Shuman requested that Kelly put together a list of questions and concerns for the members to use in their outreach efforts. The survey will aid the EITC Committee to assess the accessibility and usability of this Form. Shuman mentioned that concentration should be on educating taxpayers so that they learn to prepare their own tax returns. Discussion followed on AARP, VITA and other free tax assistance efforts. Judith Howard, an IRS Governmental Liaison, explained the IRS education incentives and the information that it provides via website, free tax assistance site and distribution of written material.

The members discussed the ASPECT toll-free line and TAP website as means for TAP to receive issues and concerns from taxpayers. They wanted to know if taxpayers were acknowledged. Staff explained that all calls or comments were responded and that individual situation that met TAS criteria was forwarded to the local TAS office. A member asked if TAP could receive an update or report on those calls or cases that were being forwarded to this unit. Director Temple indicated that TAP can refer cases or issues to TAS but that TAS will not be giving TAP any feedback on those cases.

Ghoniem asked if IRS had a phone number to call and report an employer treating an employee as an independent contractor and issuing a Form 1099 as opposed to the W-2. Director Temple explained that IRS does have a toll-free number for this type of referrals. Later on in the meeting, an IRS staff member provided members with this number.

Sources of issues were discussed and DFO Gorga took the opportunity to explain that the best source is outreach. LITCs and other professional societies are also great sources. Shuman finalized the proposal on Inflation/Phase-Out and Deductions and the committee accepted it and formed consensus to elevate it to the Joint Committee.

Discussion ensued on the other of Shuman's proposals regarding Penalties and Abatements. After long discussion that the proposal did not reflect properly the issue, the committee agreed that it should be revised further. Shuman will follow up. Shuman would like to respond to the taxpayer who initiated this issue and was advised that she could explain that this advisory committee worked the issue but to avoid details on the recommendations made.

Grimaldi spoke on the issue of filing extensions. He said that if the corporate returns due date of March 15th could not be met, a corporation could obtain a six- month extension. Why couldn't this be done with individual tax returns as opposed to requesting an automatic four-month extension and later on an extra two-month extension? He explained that he received researched information from the analyst but all research did not provide support against it. Analyst Knispel will do more legislative research.

Before ending meeting, Ghoniem asked: why is the tax system called a voluntary system? Sawyers replied that in time of the Civil War an amount of tax was assessed to the population with no relevance or background information to the assessment.

Outreach Presentations
Chair Fish continued the meeting by prompting all members to become involved in outreach. Deryle Temple explained the new regulations for seeking funding approval when doing outreach. The members are asked to submit request 15 days prior to the outreach through the analyst.

Public/ Participants Input
Chair requested that all participants provided their assessment or opinions of the meeting.

Closing Assessment
Chair said that much information and issues were collected in this meeting and reminded all that the meeting would continue the next day at 9:00 AM. He closed the meeting at 4:19 PM EDT.

June 21, 2003

Opening of the Meeting
Chair Fish opened the meeting at 9:00 AM EDT. He explained that member Mignano could not join committee on this day due to a relative's funeral. He presented member Silva who joined the meeting.

Roll Call

Panel Members Attending

• Elizabeth Brodbine-Ghoniem, MA
• Walter Fish, NY, Chair
• William Gedge, CT
• Peter Gorga, Jr., NY, DFO
• James Grimaldi, NY, Vice Chair
• Catherine Kelly, ME
• Paul Nagel, NY
• Eileen Shuman, VT
• Charles Silva, MA

Panel Members Absent

• Abigail Alicea, NH
• Aimee Brace, NY
• Diane Mignano, RI
• Shamsey Oloko, NY

TAP Staff Attending

• Marisa Knispel, TAP Program Analyst
• Sandra Ramirez, TAS Senior Analyst
• Thomas W. Sawyer, TEC Tax Specialist

New Issues
DFO Gorga revisited Shuman's Penalties proposal. He explained that he spoke to an IRS employee at an IRS Service Center or Campus who had told him that much of the correspondence received at the Campus was on balance due issues. He proposed to the committee to consider the issue that the IRS notice or letter be a standard with every balance due case. He also suggested that the IRS should pay close attention to the paragraphs chosen for these letters so that they reflect the issue at hand and be understood clearly by taxpayers. The issue, he said, is a quality control issue. The letter should explain the issue explicitly so is not to be misunderstood by low-income or uneducated taxpayers who lack knowledge of tax law.

Discussion on how best to handle the issue ensued and members decided to create two new issues: the statement(s) made in the IRS letter and quality control of these letters. Shuman will follow up on the issue of the letters and Ghoniem on that of quality control.

Shuman indicated that many issues reviewed the prior day seemed to conflict with issues being worked by other area and issue committees. We need to clarify the specific direction taken by that committee on the issue, she said, before referring our issue.

The group continued discussion on the penalty proposal and followed with discussion on installment agreements. Kelly said that the request for IRS's installment agreement or payment plan, Form 9465, does not adequately describe the penalties and interest that the taxpayer accrues while on the agreement. Only the instructions to this Form indicate this. She volunteered to review the form and its instructions to formulate a proposal to this issue. Ramirez suggested combining this issue with the penalty and abatement issue of the written proposal. Gorga and Shuman disagreed; they should be two separate proposals.

Shuman suggested that it could be treated as a recommendation to the issue, not as part of the issue. Thus the issue of the penalty and letters is to be worked by Shuman, Form 9465 by Kelly and quality control of IRS interim balance due letters by Ghoniem.

Gedge asked the question of why do we have to spend so much time formulating a recommendation proposal to an issue instead of just forwarding the issue to the appropriate party. Chair Fish explained that this is the procedure TAP members were asked to follow.

The committee reached consensus to finalize all penalty related issues prior to the July 22nd teleconference. The committee will study and review the proposal before this date and vote to elevate during the teleconference.

Sawyer added that the “interim letters” sent to taxpayers owing a balance to IRS should state that the taxpayer should continue making payments while they wait for approval of installment request and that penalties and interest will continue to accrue.

DFO Gorga explained that this type of miscommunication and problems is handled by LITCs. He suggested that we maintain close communication with local LITCs that serve as a source of issues.

Chair Fish asked committee to develop a formal to response to taxpayers who send us issues and recommendations that are followed by the committee. Gedge was confused as to cases like Shuman's VT taxpayer should be handled. DFO Gorga explained that when a taxpayer has a personal situation, we should refer the case to the local Taxpayer Advocate Service. The issue of the problem, however, may be of interest to the committee if that is a global issue. Shuman asked if she should let this particular taxpayer know the working recommendation on his issue. DFO said that she might respond that his issue is of interest to the committee that is currently formulating a recommendation but not the details of the recommendations. In other words, respond to the taxpayer as a courtesy notification. Consensus was achieved to respond to any taxpayer who sends us or refers us an issue. By email, the taxpayer may be responded immediately.

Mid Year Assessment Report
The committee spent time formulating the Mid Year Assessment Report. Chair indicated the purpose of this report and that all committee chairs were to submit one to the TAP chair for review. Members requested that Analyst Knispel obtain a copy of all other committees'.

A copy of the final report is attached with the meeting minutes.

Public/ Participants Input
The issue of backup withholding, a tabled issue, was discussed and Tax Specialist Sawyers spoke about this issue. He closed his discussion by thanking committee for inviting him. He found the meeting very informative and rewarding.

Closing Assessment
In closing, member Kelly reminded members to offer suggestions and opinions on Form 8867's survey. In doing this, we will know if the due diligence requirements are being done by practitioners in our area.

Chair Fish discussed an idea that the Joint Committee presented to offer a seminar or training to those non-practitioner members. The TAP chair had requested all chairs to pose the question for the need of training to all members. Area 1 Committee members agreed that it would not be necessary.

Chair also indicated that soon new business cards with new TAP logo would be distributed. Ghoniem introduced the issue to add member's personal phone numbers on the card and chair explained that IRS did not agree with this request that was presented previously.

Chair thanked Tom Sawyers and all the committee members for their participation. He closed the meeting at 11:50 AM EDT.

Attachments

• Mid-Year Assessment Report
• Roster of Issues Under Consideration with name of member working the issue and Action Taken.