February 7, 2003
Jacksonville, Florida

Members in Attendance:

• Larry Barnard
• Charlotte Cassady
• Gwen Handelman
• Edward Hanna
• Tim Jarrell
• Keith Johnson
• Sharon Lassar
• Owen Oatley
• Buck Paolone
• George Sullivan
• Agnes Tillerson
• Nancy Ferree (acting DFO)

Staff:

• Sallie Chavez

Guests:

• Joe Wilson, IRS, Acting Area Director, SBSE Compliance Area 5, Jacksonville
• Danny Smith, IRS, Senior Tax Specialist, Jacksonville
• Carol Stephens, LBA Financial Group, Jacksonville
• Jennifer Jackson, citizen, Jacksonville
• Leonard Tillerson, citizen, St. Mary, GA
• Sandra Piquet, Central Florida Legal Services, Daytona Beach
• Hallie William Bey, Jacksonville Urban League, Jacksonville
• Mike Damasiewicz, IRS, Government Liaison, Jacksonville
• Edna Javis, citizen, Jacksonville
• John Harrell, IRS, OIC Specialist, Jacksonville
• Pat Kinghorn, IRS, Taxpayer Advocate Service Manager (representing the Local Taxpayer Advocate, Jacksonville
• Debbie Crawford, IRS, Taxpayer Advocate Service Analyst, Jacksonville
• Mike McAnnany, Tax Preparer, Daytona Beach

Panel Chair Edward Hanna welcomed everyone. The Area 3 Panel introduced themselves to the visitors. Chair requested the guests to introduce themselves.

REVIEW OF JANUARY 17, 2003 MINUTES
There were minor corrections to the January minutes. Motion to accept the minutes was made and motion was seconded (after corrections made); no objections. These minutes were accepted by consensus.

OUTLINE OF PLAN FOR CONFERENCE AND OBTAIN CONSENSUS
Chair asked the member to stay on their issues. The meeting will run 50 minutes and then a 10-minute break. Chair asked for consensus for this and it was approved.

REPORT OF JANUARY 21, 2003 JOINT COMMITTEE CONFERENCE CALL
Vice-Chair Johnson reviewed Joint Committee Conference Call. Most of the call concerned a recommendation of E-filing. There was a major item concerning W-4s, which will be discussed here later. They discussed the checkbox issue. There were concerns about the power of the box. How much can be discussed? Is it limited to "was it processed and was it correct"? The problem may be eliminated. It will be monitored to see if there is still a problem. Area 2 proposed to eliminate Capital Loss limit. The issue was referred back to the Area for further development.

SUB-COMMITTEE REPORTS

OIC
Panel Chair Hanna asked John Harrell (IRS OIC Specialist) to address the panel. Mr. Harrell distributed a package of information that he discussed in detail. Mr. Harrell discussed the processing of the offer. He answered many of the questions the committee had on the offer in compromise process.

Panel Member Oatley discussed the problem with offers. The IRS should let taxpayers know in the various publications that this is not a "quick fix". It (the offer) is difficult to get and many taxpayers may not qualify. This (letting the taxpayer know it is not a quick fix) could reduce the amount of offers submitted.

W-4
Panel Member Lassar explained the issues were two-fold. The first was when a taxpayer claims 10 or more exemptions on the W-4. The employer must forward the W-4 to the IRS. Some taxpayers feel it "red flags" them. She suggests the number of exemptions be raised. She would like to know what happens to the W-4 when it is submitted to the IRS. She will submit this questions to the Analyst and the Analyst will submit it and get an answer.

The second condition is when an employee claims "exempt" from withholding if wages are more than $200 per week. An example of how this is a student who works part-time. They may not have to pay taxes at the end of the year therefore they could claim "exempt" but the W-4 must be sent forward. Panel Member Lassar suggests they try to get some more answers and pursue this issue.

ACTION: Analyst Chavez will find out what happens to W-4s (more than $200 and exempt). Panel Member Lassar will forward something in writing.

Customer Fairness
Sub-Committee Chair Sullivan handed out an outline for how he would like to contact employees. He discussed how employees might be able to bring problems to the TAP. It was discussed and, by consensus, it was agreed to move forward. Mr. Sullivan requested a list of all NTEU Chapter Presidents. DFO Ferree requested his request be put in writing so the TAP staff can accommodate his action item.

Walk-in Review
Chair Ed Hanna handed out "Review Sheets" that were previously used by the Florida CAP. He suggested that panel members go to the walk in centers to see if they are in compliance with what the centers should do. The visit should not be confrontational. He asked for volunteers to do this. TAP Manager Ferree and Analyst Chavez will coordinate these efforts. TAP Manager Ferree will share this information with the TAP Director. The TAP Office will contact the manager of the center and the Senior Commissioner's Representative. By consensus it was agreed to move forward on this issue, however DFO Ferree advised that during filing season is not a good time to plan the visits.

Telephone List/Answering Quality
Sub-committee Chair Jarrell stated this was a large issue and may be too large for one sub-committee. He would like to have some statistics on telephone calls to the IRS. He will put this in writing to Analyst Chavez and she will get the information for him.

He feels there are two (2) separate areas, Performance Standards and Quality. Sub-committee Chair Jarrell suggests a separate committee on performance including no person to speak to. This may be part of One Call Accountability.

He asked how the IRS numbers are put in the phonebook? TAP Manager suggests a presentation by IRS subject matter expert be made so that they can ask all their questions.

There was a comment from one of the citizen about the calls being routed all around the country and never getting the same center. One of the IRS officials said that TAP should contact Judy Tomaso about IRS directory on-line. Another IRS official said that the telephone numbers for managers are already on the IRweb.

It was suggested that the sub-committee pick the biggest problem area and work on it.

Notice Response Timeframe
Panel Member Cassady reported on this issue for Sub-committee Chair Curol. She brought a notice she received from one of her clients stating the taxpayer had claimed a deduction and was told another person claimed the deduction. She said that was not a true statement. The deduction was not claimed by anyone else. They had filed a return but did not claim the exemption.

The panel discussed the timeframe of notices. Taxpayers receive the notice after the IRS deadline. The timeframe has gotten better. One of the members asked what are the qualifications of people working in the notice area? Another member stated that notices are computer generated. Someone else asked how much it cost to generate a notice since he received a notice for $.60. IRS asks for a response in 10 days. IRS gets 30 days to respond and then may still not meet that goal. No one had any comments on this.

Another issue related to this is that a taxpayer goes to the local office to settle a balance due. The payment must be sent by FedX to the campus to be posted to the account. This can cause a delay to the taxpayer (i.e., for a real estate transaction). Several IRS employees stated that if the taxpayer uses certified funds a lien could be released immediately. The problem is that there are several "rural" area offices that may not be able to handle this situation. How many times does this issue come up in a rural area/office? Panel members agreed this issue would not be pursued, as the problem does not exist on a large scale.

Annualized Worksheet to Form 2210
Sub-committee Chair Barnard described the issue. The Form 2210 is for estimated tax penalty assessed. The form needs to be simplified to make it user-friendlier. After a discussion it was decided, by consensus to drop this issue.

One Call/One Accountability/Complaint Process ResolutionSub-committee chair Paolone discussed this issue. He wanted to know how do we evaluate? He could not get the information from the IRS. He would like to use surveys to send to taxpayers. It would be used to find out what kind of complaints the taxpayers have. He would like to use these surveys when panel members go on outreach activities. There is a survey at the taxpayer customer service centers. He would like to know how the Taxpayer Advocate uses their surveys.

ACTION: Sub-committee chair Paolone will get together with TAP Manager Ferree to discuss his plan. DFO Ferree will contact Mr. Paolone on Tuesday, 2/11/03 to discuss his needs.

Record keeping
Sub-committee chair Cassady distributed a recommendation on this issue. It was discussed by the panel and the panel agreed, by consensus, to forward the recommendation to the joint committee. Panel Member Handelman will get together with Panel Member Cassady to wordsmith the document before it goes forward.

Schedule K-1s
Sub-committee chair Oatley submitted a recommendation. The panel discussed the issue. The panel wants to know if the requirement needs to be revised or to drop the requirement. If effects a large amount of corporations. A list of pros and cons needs to be prepared and emailed to all panel members for the next meeting.

Copy of Tax Returns
Chair Ed Hanna submitted a recommendation on this issue. The issue was discussed and, by consensus, the panel decided to drop it.

Industry Percentages for Inventory Capitalization
Sub-committee chair Lassar summarized the issue. A new IRS Rev Proc (2002-28) states that companies with income of $10M or less no longer have to account for inventory. After much discussion it was decided that Panel member Lassar and Chair Hanna would discuss this at a later date.

OTHER ISSUES
Panel Chair Hanna stated there were several issues that were discussed during the last telephone conference call. The first one was Estimated Tax Payments. The suggestion was to have it available (either on the internet or via telephone) for taxpayer's and preparers who forget what they have paid in. It was agreed by the panel to pursue this issue.

The other issue had to do with the "red" copy Forms W-2, W-3, 1096, 1097 and 1099. The panel wanted to know why the IRS could not use a black and white copy or a photocopy. Is there a need for the "red" copy? Analyst will follow up on this. Answer will be forwarded to member to consider at the next meeting.

Action: Analyst will find out why a "red" copy of the above forms is needed.

NEW ISSUES
Vice-chair Johnson raised the issue about unenrolled tax preparation by retail business (such as car dealers). It was discussed that the Ad Hoc Committee was already working on this issues. They are trying to have all unenrolled tax preparers licensed. This is an item on the National Taxpayer Advocates Report to Congress.

It was suggested that an agenda item should be added to the meeting for panel members to report on their issue committee.

CITIZEN INPUT
A citizen spoke to the panel about several issues. She spoke about going to the IRS to have payments taken out of her checking account. She said she visited the IRS local IRS office four (4) times before it got resolved. She ended up having to get it resolved through the Taxpayer Advocate Service. She complained that the processing was too slow.

Her next issue was concerning an audit. She was involved in an audit and the auditor was not familiar with her type of return (clergy). She suggests that the IRS have auditors who are familiar with the type of return they are auditing.

The next issue was with the time it takes to audit a return. She stated the length of time is too long.

Her last item was that the taxpayer should provide copies of the return at the audit. This was an item discussed earlier and was dropped.

Analyst had a file of referral issues to discuss with the panel but there was not enough time to go through them. Analyst Chavez will mail them out to everyone before the next conference call.

CONFERENCE CALLS
Panel Chair Hanna stated the conference calls will continue. He wants everyone to stick with the issues to save time. The end of the conference call can be used for any comments.

Meeting was adjourned.