Area 2 Committee Meeting Minutes

Date: March 15, 2005
Via: Teleconference

Designated Federal Official

• Terry L. Mapp, Local Taxpayer Advocate, Philadelphia, PA

Members Present

• Bill Bly, Wayne, PA
• Paul Brubaker, York, PA, Co Vice-Chair
• Anthony DiMartino, Toms River, NJ, Chair
• C. Morgan Edwards, Charlotte, NC
• Srinivasan Kasturi, West Orange, NJ
• Steve Kreisler, Potomac, MD
• Robert Maziarz, Hainesport, NJ
• Paul McElroy, Winston-Salem, NC, Co Vice-Chair
• Martin Romeril, Bethlehem, PA
• Lynwood Sinnamon, Arlington, VA
• Agnes Tillerson, Erie, PA
• Faith Vinikoor, Baltimore, MD
• Elizabeth Warnecki, Ladson, SC
• Lillian (Beadsie) Woo, Durham, NC

Members Not Present

• David Cain, Marlinton, WV
• Christine Hurley, Lorton, VA
• Patrick McCombie, Wilmington, DE
• Theodore Perros, Washington, D.C.
• Steve Rue, Mechanicsville, VA

TAP Staff

• Nancy L. Ferree, TAP Program Manager
• Inez E. De Jesus, TAP Program Analyst

Welcome/Announcements/Review Agenda
Both Chair DiMartino and DFO Mapp welcomed the committee; the Chair informed everyone that Co Vice-Chair Brubaker will be chairing the meeting after 2:30 PM ET since he will be unavailable.

DiMartino also shared that Theodore Perros had attended the President’s Advisory Panel meeting on Federal Tax Reform on March 3, 2005, in D.C., and if all agenda items are covered by the end of the meeting, Perros will provide the committee with a report of what transpired at this event. Follow-up Item for Perros.

Also, if time permits, Brubaker had an issue regarding the right to claim a child that he would like to share with all.

Roll Call
Roll call was taken and quorum of 11 was met; 14 members were present.

Joint Committee Report
DiMartino shared that since there has been no Joint Committee meeting since the committee met in South Carolina last month, there was not much to report; the Joint Committee will be meeting tomorrow, March 16th.

DiMartino addressed business cards, these were recently mailed out by the staff and if you do not receive your cards within a week, please inform Program Manager Nancy Ferree. It was agreed that business cards will not be ordered for members who are serving for a third term; they are to use whatever they have in stock.

DiMartino inquired if everyone had received their reimbursements from the November 2004 Annual Meeting in D.C; if not, please let the staff know.

Review/Approve Previous Meeting Minutes
The minutes of the February 18/19, 2005 face-to-face meeting were approved by consensus.

Program Manager Nancy Ferree reviewed all the prior action items from the previous meeting, and the following were stated for the record:

1. On Page 4, Meeting Satisfaction Survey — the coordinated responses were placed on TAP Speak as agreed upon and will be used in the future by this committee.
2. On Page 5, Issue # 3236, E-file Services & 100 Return Requirement — this issue has been tabled for discussion during today’s call.
3. On Page 5, Issue # 3238, Usability of IRS Website — Action item for Hurley/De Jesus: (Still Pending) — Analyst is to conduct further research when she receives specifics from Ms. Hurley who is awaiting to hear from the individual that originally brought this issue to her attention.
4. On Page 6, Issue # 3390, “Timely Response Required on IRS Envelopes” Update: Chair shared that a “draft” recommendation has been sent to the Area 2 DFO, Program Manager, Program Analyst and Panel Member Bly for their review before next steps are taken. Action item for Staff to follow-up on.
5. On Page 6, Issue # 3391, “Take Home Pay Web Calculator” — Update: a sub-committee composed of Kreisler, Maziarz, McCombie and Warnecki has been created.
6. On Page 6, Issue # 3392, “Change Form 1065 Schedule D-Capital Gains and Losses” — Update: Chair shared that a “draft” recommendation has been sent to the Area 2 DFO, Program Manager, Program Analyst and Panel Member Bill Bly for their review before next steps are taken. Action item for Staff to follow-up on.
7. On Page 7, under “New Sub-committees” — Issue # 3234, Seniors Problems with Tax Matters” — Confirmed: Since Sinnamon had brought this issue to the panel’s attention, he will be the lead of the sub-committee.
8. On Page 7, under “Reports Resulting from Break-out Sessions” — Issue # 3234, Seniors Problems with Tax Matters” — Pending: for both the sub-committee and Analyst in obtaining information from the analyst who prepares Publication 554 to address specific questions, and obtain a Subject-Matter Expert.
9. On Page 7, Issue # 3235, Suggestion Provided-Form 2553 — Pending: Rue had attended a meeting with the IRS whereby he provided input which will be considered by the IRS when this form is revised in the near future- Rue is to prepare a letter to the chair with detailed information on what transpired at this meeting which will be sent to the Joint Committee as information. In addition, on Page 8, same subject matter, Update: chair shared that a “draft” recommendation prepared by Woo has been sent to the Area 2 DFO, Program Manager, Program Analyst, Rue, Woo and Edwards for their review before the next steps are taken. Action item for staff to follow-up on.
10. On Page 8, Issue # 3391, “Take Home Pay Web Calculator” — Pending Action item for the TAP Staff: to obtain a Subject-Matter-Expert.
11. On Page 8, Issue # 3394, Improve Form 1099 (U.S. Information Return for Calendar Year) — Results: Closing Letter was sent to the Citizen from Pennsylvania on February 25, 2005 and issue was closed.
12. On Page 9, Issue # 3295, “Add Limited Liability (LLC) Option to Form SS-4” This issue has been added to today’s agenda.
13. On Page 10, “Appreciation extended to SC Local Taxpayer Advocate” — Ferree shared that letters of appreciation were sent.
14. On Page 11, Inez did provide both Hurley and Tillerson with information on their respective Local Taxpayer Advocates.

Sub-committee Reports from Sub-Chairs:

Issue # 3228-Efiling Alternatives and Interactive Forms —
Since Sub-Chair David Cain was not available on this call, Paul McElroy reported that the sub-committee has reviewed and noticed that the National Taxpayer Advocate (NTA) has several pages on her 2004 Report to Congress on this same matter. No one should have to pay for these services and she also urges the IRS to amend current agreements. It seems that there is nothing else this committee can do. Kasturi stated that since this is a work in progress, we may not want to drop it but monitor it instead. This led to discussion by the entire committee and it was agreed by consensus that this sub-committee will monitor what the NTA already has on her report and make sure it is done completely; provide support and provide recommendations.

Issue # 3234-Seniors’ Problems with Tax Matters —
Sinnamon led discussion and shared that Seniors have unique issues especially in understanding IRA (Individual Retirement Account) distributions after age 70 _ as required by law.

Chair and Vinikoor shared based on their experiences that many Seniors assume when they do not receive a tax package at the end of the year that they are not required to file an income tax return or owe monies which is not true in all cases.

A strong interest was shown regarding the New Form 1040S, based on the “Simple Tax for Seniors Act of 2004” – H.R. 4109, an Act which was passed by the House on June 2, 2004. The Act states that the form shall be made available for taxable years beginning after December 31, 2004.

Ferree shared that the staff had done some research and was currently awaiting to hear from the Forms Program Owner regarding the status of the new form.

It was agreed by consensus: that the committee would like to get involved with the ground work if the new form is in the planning stages. Action item for Ferree: Obtain Subject Matter Expert and/or continue to pursue information on partnering with the Form 1040S owner/originator. Committee feels that their concerns should be communicated to the IRS as soon as possible.

Inez shared that a new issue recently received is closely related to this one; Issue # 3456, Improve IRS Information to Seniors — Citizen from Pennsylvania is elderly and was misinformed about IRA’s- Individual Retirement Accounts- she now has a big tax liability because she did not invest in Roth IRA’s. She thinks IRS should do a better job in advertising IRA’s so that the elderly do not get into this situation. Action item for Inez, share this new Issue #3456 with the entire committee- cross-reference Issue # 3234, Seniors Problems with Tax Matters.

Issue # 3235-Suggestion Provided-Form 2553 —
Chair DiMartino addressed this matter on behalf of Rue; Form 2553, Election by Small Business Corporation; this form is used a lot by Practitioners- DiMartino expressed his appreciation to Beadsie Woo for drafting the recommendation which is currently being reviewed. The recommendation proposes that the form and instructions be modified to accommodate businesses with shareholders as well as members. Pending Review by Staff before next steps are taken.

Issue # 3391- IRS Take Home Pay Web Calculator —
Steve Kreisler reported that the sub-committee met via teleconference on March 9, 2005; he expressed appreciation to Maziarz, McCombie and Warnecki for their team efforts. The sub-committee has reviewed some of the web calculators that are out there already. This sub-committee is requesting that arrangements be made by the staff to obtain a subject-matter-expert, in order to address several questions and concerns they have. Action item for staff: Obtain a Subject-Matter-Expert on Web Calculators.

Action item for Warnecki: provide a copy of the March 9th teleconference meeting minutes to the staff and other sub-committee members.

Review New Issues/Sub-Committee Assignments

New Issue #3420, Self-Employed Payment Procedures — Nancy Ferree introduced this issue to the committee; it was received from a Citizen of Pennsylvania, it reads as follows: “Caller and his wife are both self-employed. He feels there is a gross inequity in the way self-employed people pay their taxes. Quarterly estimates should be due 15 days after the end of the quarter. Self-employed people should have 15 days after the end of the quarter to close their books and determine what their tax liability actually is for the quarter. January and April 15th are okay, but June and September are due before the end of the quarter.” Kasturi agrees and stated that this affects others besides those that are self-employed. Vinikoor stated that this issue may be legislative in nature; De Jesus shared that when she conducted the preliminary research on this issue, she noticed that another committee had addressed this matter and had dropped it because it was legislative and TAP does not address legislative issues. De Jesus stated that she was in the midst of obtaining additional substantiating information. Warnecki requested clarification on the Estimated Payment dates indicated on the Reseach Report and it was confirmed that these were accurate as stated.

Action item for Analyst De Jesus: As per the chair, conduct additional research; clarify what the other committee did and why it was dropped. (We do have the contact information for the citizen that submitted this issue and a letter will need to be prepared.)

New Issue # 3295, Add LLC (Limited Liability) Option to SS-4 Form — Nancy Ferree introduced this issue to the committee; it was a suggestion received from a Citizen from New Jersey; it reads as follows: “The SS-4 Form be changed to include a check-box (Part 8a of SS-4) to indicate if the company is single or multiple member so the IRS won’t need to write a letter. This will hopefully cause the issuance of the EIN be done sooner.” (The SS-4 Form: is an application for Employer Tax Identification Number and EIN means Employer Identification Number.) Sonny Kasturi volunteered to work on Issue # 3295.

Follow-up to Issue #3236, E-file Services — discussion was led by Faith Vinikoor; she inquired from the Practitioners on the panel, what did thy think about this matter; committee decided to continue to review this and Sonny Kasturi volunteered to work with Vinikoor on this.

Follow-up to Issue # 3238, Usability of IRS Website — as stated earlier, this is a pending action item for Hurley and De Jesus- analyst is to conduct further research when she receives specifics from Ms. Hurley who is awaiting to hear from the individual that originally brought this issue to her attention.

Follow-up to Issue # 3390, “Timely Response Required on IRS Envelopes” — a “draft” recommendation is in the process of being reviewed by the staff before the next appropriate steps are taken. Action item for TAP Staff.

Follow-up to Issue # 3392, “Change Form 1065 Schedule D-Capital Gains and Losses” — a “draft recommendation is in the process of being reviewed by the staff before the next appropriate steps are taken. Action item for TAP Staff.

C. Morgan Edwards wanted to discuss a new issue regarding “Charters Schools Status” (public entity) and was advised by the staff that according to the standard procedures new issues are brought to everyone’s attention prior to a meeting; therefore, this will be an agenda item for the April Teleconference Meeting. Edwards also wanted to know if the staff had received any correspondence from the Kings Mountain schools and the response was “No, not yet.” Action item for Inez: Add this item to April 19, 2005 agenda.

Outreach Efforts
Edwards inquired if the staff had received a faxed copy of his News Release that appeared on March 10, 2005 in the “Kings Mountain Herald” in North Carolina entitled: “Morgan Edwards appointed to Tax Advocacy Panel”. Staff confirmed that it was received on March 15th, scanned and shared with the entire committee on the same date.

Sinnamon expressed a concern regarding the Virginia Local Taxpayer Advocate’s (LTA’s) outreach plans for 2005 since he wants to know what is being planned for 2005. DFO Mapp inquired if Sinnamon had met Mark Campbell yet, the Virginia LTA. Ferree informed everyone that she had contacted all the Area 2 LTA’s and they have all made a commitment to be working with the TAP members. If you have not heard from your advocate, you will soon. Each state is different and may operate differently.

Ferree shared that this portion of the meeting is to report out on your outreach activities.

Recently, Edwards, McElroy and Woo attended a Stakeholder’s meeting in Greensboro, North Carolina. Morgan said that this was a very good meeting. McElroy had provided an excellent report on what had transpired and this group will be invited again to attend future meetings. Ferree stated: “Keep up the good work!”

Criteria (Metric Scoring for Year End Report)
Ferree informed Sinnamon that during the Area 2 face-to-face meeting, he had been selected to participate with the Measurements of the TAP group; the TAP Director had solicited volunteers who will be interested in participating in providing feedback and his name was included; others on this committee that will be involved are: Brubaker, Hurley, Kreisler, Woo (and Sinnamon)

Secondly, the Performance Measures of the TAP is related to Sinnamon’s Criteria- Metric Scoring for Year End Report. Sinnamon expressed his concerns when he read the prior year’s report and he did not agree with the ratings since there was a disconnect between the dialogue and the rating specifically since there was no representation from the Northern Part of Virginia.

Public Input — None

Meeting Satisfaction Survey (Optional)
Ferree informed everyone that a copy of this form was submitted with the pre-read materials sent out prior to this meeting; she reminded everyone that this is a very important tool for the chair and the staff in order to make improvements to future meetings. Your comments are greatly appreciated and you do not have to identify yourself. Brubaker requested that a blank form be placed on TAP Speak; in addition, analyst was asked to send out another one by email to all after this meeting and to do so from now on after every call. Action item for all panel members: please send the survey responses directly to Inez and she will coordinate the responses.

Closing Assessment
Since Perros was not on the call, his report on the March 3, 2005 meeting of the President’s Advisory Panel on Federal Tax Reform will be most likely be discussed during the next call.

Brubaker shared an experience he had with grandparents who have legal custody of their grandchild, but the child’s Father filed beforehand and received a refund by e-filing; when the grandparents filed their tax return, it was rejected, and credits were not granted. After discussion, both DFO Mapp and Program Manager informed all that this is an individual issue, and it deals more with “processing” and is not a TAP issue. Ferree suggested to Brubaker that since there is a TAP EITC Issue committee, he may be interested in participating on one of their teleconference meetings. Mapp also stated that there is nothing that a Local Taxpayer Advocate can do to assist an individual with this matter at this point.

Brubaker shared that “this was a good meeting” and having met face-to-face last month was very helpful and effective in the bonding process. Others agreed with Bru. Ferree thanked everyone for their input and cooperation.

Confirm next teleconference meeting: April 19, 2005 at 1:30 PM ET.

Brubaker adjourned the meeting.

These minutes were approved by the Area 2 Committee on April 19, 2005 by consensus.