Area 1 Committee Meeting Minutes

July 27, 2004

Opening of the Meeting
While waiting for members to join the conference call, Silva recommended that the entire Area 1 Committee participate in formulating the Annual Assessment instead of having a subcommittee dedicated to this task. Grimaldi explained that the Joint Committee instructed all committee chairs to organize subcommittees for the purpose of writing the Assessment in order to avoid past experience of these committee chairs assuming sole responsibility. All the members will have input on the content of the Assessment, he added, but the subcommittee will write it.

Roll Call

Panel Members Attending

• Walt Fish, NY
• Peter Gorga, Jr., NY, DFO
• James Grimaldi, NY, Chair
• Eileen Shuman, VT
• Charles Silva, MA

Panel Members Absent

• Aimee Brace
• Elizabeth Brodbine-Ghoniem, MA, NY
• William Gedge, CT
• Diane Mignano, RI
• Paul Nagel,
• Shamsey Oloko, NY

Quorum was not met.

TAP Staff Attending

• Marisa Knispel, TAP Program Analyst

Meeting Minutes
Since the quorum was not met, the minutes of the meetings of June 7&8, 2004 and June 29th could not be approved. Silva noted that page 6 of the former contained a spelling error. Knispel will correct the error.

Silva said that while attending the National Tax Forum in Atlantic City he met an IRS employee named Tamara Ward who works on the IRS website. She could be a valuable contact should the Committee decide to continue its work on the website issue.

Shuman also noted that last year the Committee had no quorum for its July teleconference and that maybe we should keep this in mind before scheduling a meeting for this month next year. Grimaldi and Fish both agreed that having a meeting without a quorum is better than having no meeting.

Taxpayer Education Subcommittee – Grimaldi, Silva, Fish and Oloko
Adding a TAP Statement to TAS Publication 1546, “How to Get Help with Unresolved Tax Problems” – Grimaldi volunteered to write this proposal.

Elimination of Form 2688 — Knispel’s additional research provides support to the subcommittee’s recommendation on this issue. Fish added that this issue was also a concern of many attending the Tax Forum. Grimaldi will also write this proposal as he was the one who originated the issue.

Schedule D Loss Carry-forward — Knispel provided sufficient research to support the Subcommittee’s recommendation on this issue. In spite of the IRS’s negative outlook on our recommendation, the Subcommittee agrees to go forward with the proposal. Silva volunteered to write it.

DFO Gorga encouraged the members to finalize these proposals before the face-to-face meeting in Vermont.

Procedures and Processes Subcommittee – Gedge, Shuman, Nagel and Mignano
Shuman was the only Subcommittee member present at this meeting.
Thus, discussion of the issues was postponed until chair Gedge and other members were present.

Other Issues
Silva spoke about the issues collected from tax practitioners at the Atlantic City Tax Forum:

1. A practitioner said that when an error occurs in e-filing a tax return, the IRS contacts the practitioner only. He suggested that both practitioner and taxpayer should get notified to ensure the error is corrected.
   
2. One of the participants indicated that there should be only one PIN to contact government agencies instead of a different PIN per agency. Gorga explained that IRS systems do not communicate with those of other agencies and thus each agency requires its own PIN. He added that the individual can change the PINs provided to one of his/her choice; just like in banking.
   
3. Practitioners complained that when they call the IRS, the IRS assistors answering the calls don’t have the knowledge or expertise to deal with the issue. Gorga explained that when the assistor does not know the answer to an inquiry, he/she will write the inquiry for research. Afterwards, the IRS will respond to the caller by phone or in writing within a certain timeframe. Grimaldi added that practitioners should be referring their inquiries to the Practitioners’ Hotline, not the toll-free. Gorga said that the Hotline’s procedures are the same as those of the IRS’s toll-free number.
   
4. One practitioner complained that the IRS always audits her on her e-filing service during the filing season thus consuming her time. Fish shared this practitioner’s problem with the IRS E-filing exhibitors at the Forum and he was told that the reason for this is that the practitioner may be making the same e-filing errors repeatedly. The IRS is trying to instruct her on avoiding these errors.
   
5. - Silva explained that some practitioners complained about e-filing’s lengthy process. The practitioner must send a copy of the prepared tax return along with the e-filing form to the taxpayer in order to obtain the taxpayer’s signature authorizing him/her to e-file the return as prepared. This back-and-forth process is time-consuming for practitioners. Fish also spoke to the E-file IRS representatives about this subject and they concurred that the situation is a problem but they have no solution.
   
6. The time limit to amend the Form 1099 and Schedule K-1 was a popular subject, Silva said. Gorga suggested that the Committee write a proposal on this issue and refer it to the Systemic Advocacy Unit. Silva and Fish agreed collaborate on writing a proposal.
   
7. Another participant suggested that the IRS allow practitioners access to research clients’ payments such as estimated tax payments the way that some state revenue departments like Massachusetts and New York currently do. The problem with this, Gorga explained, is that the IRS would have to provide the same PIN to the taxpayer and the tax preparer. Facing the problem of the existing flight-by-night preparer schemes, this would create more fraud and identity theft cases. Grimaldi said that this issue is similar to the referral that Knispel recently shared with the Committee where the preparer could not obtain information from the IRS on the advanced child tax credit that his client received due to the fact there was no Power of Attorney (POA) on record but he could, however, obtain the necessary information from the IRS website. It is an issue that could be viewed by some as a breach of confidentiality, Grimaldi said. Fish disagreed and said that giving the practitioners access to clients’ information would be a great convenience for the tax preparers.
   
8. A few complaints were about the fact that for a practitioner to provide e-filing services, he/she must have filed 100 tax returns electronically. This requirement makes it impossible for a sole practitioner who has recently started his own business to provide the e-filing services. Gorga stated that the IRS E-file representatives are committed to review this problem.
   
9. The expiration date of a tax return’s POA was also an issue. Tax preparers complained that the IRS sends notices of math errors and adjustments after the POA has expired. Grimaldi clarified that this “checkbox” issue is already been considered by the Area 3 Committee. Knispel suggested that Area 1 write their recommendations and refer them to this Committee. Silva volunteered. Silva requested that Knispel send him the new format for writing Committee proposals.
   
10. Preparers complained that the notices the IRS sends to taxpayers do not clearly explain adjustments made to the taxpayer’s account. All members present disagreed with this statement.
    
    Grimaldi thanked Silva for his report on the Tax Forum. He also indicated that all members should have received a copy of the IRS’s response to Ghoniem’s ITIN proposal and briefly described the response as one that addresses all of Ghoniem’s recommendations as already implemented by the IRS.
    
    Grimaldi also said that the letter the Committee addressed to National Taxpayer Advocate Olson would be sent to her after Ramirez edits the letter according to Shuman’s suggested changes.

Closing Assessment
Gorga suggested that the face-to-face meeting in Brattleboro, VT be extended to two-full days instead of one-and-a-half days since we expect a large amount of public attendance. All present members agreed. Knispel will let Ramirez know of this decision to accommodate budget requests.

Action Items

• Knispel will send proposal format to Silva.
• Ramirez will edit letter to NTA Olson and send letter.
• Grimaldi will write proposals on Eliminating the Form 2688 and Adding a TAP Statement to Publication 1546.
• Silva will write the proposal on the Schedule D Loss Carry-forward and the proposal to change the Time Limit to Amend the Form 1099 and Schedule K-1.

Next teleconference will be Tuesday, August 24, 2004 at 11:00 A.M. ET.