Area 1 Committee Meeting Minutes

March 23, 2004

Opening of the Meeting
Chair Grimaldi opened the meeting and welcomed the members.

Roll Call

Panel Members Attending

• Aimee Brace, NY
• Walter Fish, NY
• William Gedge, CT
• Peter Gorga, Jr., NY, DFO
• James Grimaldi, NY, Chair
• Diane Mignano, RI
• Paul Nagel, NY
• Eileen Shuman, VT
• Charles Silva, MA

Panel Members Absent

• Elizabeth Brodbine-Ghoniem, MA
• Catherine Kelly , ME
• Shamsey Oloko , NY

TAP Staff Attending

• Marisa Knispel, TAP Program Analyst
• Sandra Ramirez, NY, TAP Program Manager

Meeting Minutes
Grimaldi motioned to accept the minutes of February 24, 2004 and Brace seconded the motion.

Subcommittee Reports
The Chair proposed that each Committee member select a subcommittee and participate in the gathering of information, discussion of issues and formulating of proposals on the specific issues considered by the subcommittee.

Financial Literacy
In February, Grimaldi met with the counsel to the Borough President and representatives of the Taxpayer Advocate Service (TAS) and the Taxpayer Education and Communication (TEC) to plan a “Tax Day” for individuals and business owners who are members of the Metro Tech BID and CAMBA organizations. The intent was to formulate a financial and tax education program to be shared with the participants on that Day. However, the members of these organizations were not responsive to the plan and prefer that the IRS and other presenters approach the organizations separately. The educational program, Grimaldi said, would afterwards be distributed to the local high schools and business schools to disseminate and improve financial and tax literacy in the community.

EITC Examination
This subcommittee is looking at the problems of the lack of communication and continuity in the examination process as introduced by Fred Arriaga of the South Brooklyn Legal Services. Grimaldi has referred the issue to the EITC Issue Committee. Knispel mentioned that Arriaga's issue also involves the lack of communication on the correspondence the IRS sends to the taxpayer and thus might be an issue for the Notices Issue Committee. Shuman, who is a member of this Issue Committee, agreed and stated that the Notices Committee is considering the issues of 1) the taxpayer's frustration on the lack of communication with the IRS, 2) the lack of continuity with the IRS personnel handling a taxpayer's issue and 3) frustration on the part of the IRS employee.

Outsourcing
During the last meeting, the Committee decided to drop the issue of the IRS outsourcing collection efforts and continue to work on the outsourcing of the IRS toll-free hotline following the advice of the National Taxpayer Advocate. Also, it was determined that the issue of outsourcing tax return preparation to foreign countries is one concerning private accounting and tax preparation firms, not the IRS. The latter is an issue that according to Fish, the New York State Society of CPAs considers to be in violation of conduct. DFO Gorga agreed that this is not an issue for the TAP to consider but for the accounting profession and the public's concern.

The IRS is, however, currently outsourcing 10% of the calls received by their toll-free line to an outside vendor for the period of February 16 to April 16, 2004 as a pilot study. Fish considers it is premature to formulate a proposal on this issue until results of the study are available. All members conceded to place this issue in the parking lot pending these results.

Health Insurance Deduction for Employees With No Insurance
Shuman observed that members had no interest in making a proposal on this issue due to its legislative nature. Members discussed how to best approach the issue and possibly make a recommendation to be addressed to the Systemic Advocacy area of the TAS. Grimaldi agreed to write a proposal.

Form W-4
Shuman explained that she has been following up with the person who referred this issue in order to get further details. The issue, as Shuman understood it, is that an employer is responsible for verifying the identification of a new employee- specifically when submitting a Form W-4 by checking the information provided on the Form against the employee's Social Security Card. It is an issue that involves two federal agencies, Shuman said. It is unclear which agency, the Internal Revenue Service or the Social Security Administration, should be responsible to establish the guidelines on this policy.

Gorga said that it should be the employer's responsibility to insure that the new employee has an updated Social Security Card, especially during these days of terrorism. For women, for example, a marriage certificate could attest to the fact that their last name has recently changed. Fish added that the IRS's Publication 17 states that the employer should check the Card “if it is available”. Members then discussed the possibility of recommending that the IRS change the wording in the Publication from “employers should” to “employers must” check Social Security Cards. Grimaldi was concerned whether or not establishing this policy would be onerous to employers. Discussion led to Grimaldi and Shuman deciding to discuss the issue further at a later time.

Joint Committee Report
Per the Joint Committee's advice, the Chair discussed the following issues for further development and clarification.

OIC Filing Fee
The Committee's proposal reflected the concerns that 1) the $150 fee required with the submission of an offer might be burdensome to taxpayers whose income exceed the poverty levels or to those with financial hardship, 2) the fee is a disincentive to taxpayers to become tax compliant since it places an additional hardship, and 3) for each offer submitted another $150 is required. The IRS refuted each of these concerns and explained that the intent of the fee is to deter taxpayers from using the OIC as a delay to the collection process. The IRS also researched and examined the poverty guidelines and determined that the amount of the fee is reasonable for low income taxpayers.

The Chair asked the members whether or not Committee might want to respond to the IRS. Shuman stated that she would like to withhold the decision until Ghoniem was present since she was responsible for the recommendations.

Gorga stated that he has not heard complaints from taxpayers or IRS Service Centers since the implementation of this fee in the OIC program.

Knispel will research statistics to find 1) the number of OICs filed since the implementation of the user fee, 2) the number of applicants under the poverty level, 3) number of applicants who were exempt from the user fee.

Extending the EFTPS Archive Period
The Joint Committee advised the Area 1 Committee to research any drawbacks in extending the EFTPS payment archives from 16 months to 36 months.

Knispel will contact the national analysts responsible for the programming of EFTPS to examine the feasibility of the proposal. We need to know if any physical limitations, such as the storage capacity of the program, may impede the extension proposal.

Adding TAP Information to IRS Printed Materials
DFO Gorga said that the Publication 594, The Collection Process, announces the TAS as an independent entity. He suggested that perhaps adding the word “independent” to the TAP's statement might resolve our concern of communicating this organization's independence from the IRS.

Grimaldi added that we may want to contact the IRS's Tax Forms and Publications unit to consider the space available for our statement. Gorga suggested that we start by writing the statement first. Nagel requested that further considerations on this issue be held until after April 15th when the end of the filing season will allow him more time to evaluate the issue.

New Business
The Chair reminded everyone that our first Face to Face (FTF) Meeting will take place June 6-8, 2004 in Portsmouth, NH. Knispel will email the hotel's phone number and information to all the members so that each one makes his/her lodging accommodations.

Shuman suggested that the second FTF meeting be held at her town of Brattleboro, Vermont. The company she works for, she said, has offered her space for the meeting and the local newspapers would announce the meeting as well as provide coverage. Furthermore, the local college is also willing to provide us space to hold our meeting and she knows this is an offer that would attract the members of her community to partake in the event.

The Committee members discussed possible dates to hold this second meeting and agreed on October 1 - 2, 2004 with September 30th and October 2nd being travel dates.

Ramirez will send an email to all members soliciting volunteers for the Nationwide Tax Forum in our area which will be held in Atlantic City, NJ on July 6-8, 2004.

Public Input
None

Closing Assessment
Chair thanked all the members for their participation.

Ramirez will send an email to all members soliciting volunteers for the Nationwide Tax Forum in our area which will be held in Atlantic City, NJ on July 6-8, 2004.

Next meeting will be Tuesday, April 27, 2004 at 11:00 am ET.

Action Items

• Grimaldi will write a proposal on the Health Insurance Deduction for Employees With No Insurance Issue.

• Grimaldi and Shuman will discuss the Form W-4 issue to determine whether or not it merits a recommendation.

• Knispel will gather statistics on the number of OICs submitted since the implementation of the user fee, the number of applicants who were under poverty level guidelines and the number of applicants who were exempted from the user fee.

• Knispel will research the feasibility of extending the EFTPS payment archive to 36 months.

• Knispel will email information on Portsmouth hotel for the members to reserve their lodging accommodations.

• Ramirez will email information on the Nationwide Tax Forums and request volunteers to attend the Atlantic City Forum on July 6-8, 2004.