Area 3 Committee Meeting Minutes

March 19, 2004

Members in Attendance:

• Phil Bryant
• Helen Curol
• Gwen Handelman
• Edward Hanna
• Sharon Lassar
• Owen Oatley
• Buck Paolone
• George Sullivan
• Agnes Tillerson
• Nancy Ferree – Acting DFO

Staff:

• Sallie Chavez – TAP Program Analyst

Guests:

• Raymona Stickell, Director, Competitive Sourcing
• Cindy Hawkenberry, NATP

Welcome
Committee Chair George Sullivan welcomed everyone to the March call. He stated there was a very full agenda. He welcomed the guests.

Roll call
Roll was taken. Quorum was met.

Subject Matter Expert – Competitive Outsourcing of Toll-Free Telephone Line
Raymona Stickell is the Director of Competitive Sourcing with the Internal Revenue Service. She stated that this outsourcing is one of many within the Internal Revenue Service. She gave a brief background on Competitive Sourcing. In the case of the toll-free telephones, the only outsourcing is the delivery of tax law only. The account was awarded to Spherix.

This outsourcing started on February 16. At the present they are receiving 10% of the volume of calls. They are not taking any refund or account questions. If any account or refund questions are delivered, they are immediately transferred back to the Joint Operations Center so they can be answered by the Internal Revenue Service. The project ends on April 16.

The IRS is monitoring this project in real-time. They can listen to calls to measure the quality. The caller has the ability to provide feedback immediately after the call.

Committee Member Gwen Handelman asked if the customer knows it's not the Internal Revenue Service. Raymona Stickell stated that they do. There is a required lead-in message to advise that the caller is not speaking with the Internal Revenue Service.

At the present, Spherix is taking 6,000 calls per day. There were early start-up problems but they have been corrected. Most of the problems were with the probe and response guide.

Committee Member Ed Hanna asked if they gave callers ID information. Raymona Stickell stated she was not sure about this. She will check and get the information back to the group.

Committee Member Agnes Tillerson asked about the quality rate. Raymona Stickell stated that it was in the high 80s. She said at first the quality was low but that was because of the problem with the probe and response guide.

Committee Member Buck Paolone asked if this would lower the cost for the Internal Revenue Service or would it free up additional manpower or eliminate employees. Raymona Stickell said that they always look at return on investment. They would not go forward without it. There has not been a decision as to whether this will be permanent. If it is permanent then a decision will be made as to what happens to the current employees who work in this area. They could be re-assigned.

Committee Member Helen Curol asked if there were any groups that would be off-limits such as prisons to do this type of outsourcing. Raymona Stickell said that the requirements for outsourcing were set by the Federal Acquisition Regulations as to who could bid on these jobs.

Committee Chair George Sullivan asked if there were any plans to go outside the United States for this service. Raymona Stickell said there were limitations on government contracting.

Committee Member Sharon Lassar asked could Spherix be off-shore. Raymona Stickell said that the Internal Revenue Service checked on this and they were not. There are limitations.

Committee Member Buck Paolone asked what the actual cost was. Raymona Stickell said she does not have that information.

Committee Member Helen Curol asked how is the company selected. Raymona Stickell stated that low cost is not the final determining factor. Past performance is critical. References are needed. The Internal Revenue Service also makes bids to streamline the process. The government has won about 60% of the bids government wide.

Committee Member Helen Curol asked if the employees of Spherix have to go through background checks. Raymona Stickell said they have the same requirements as Internal Revenue Service employees even though they will not be answering account questions. They have to be finger printed and take the same training as the Internal Revenue Service employees. Anything that is required internally is required for Spherix.

Committee Member Buck Paolone asked how the calls are routed. Raymona Stickell said they are routed by the Joint Operations Center (JOC). Once JOC identifies the call as a tax law questions, 10% go to Spherix.

Committee Member Gwen Handelman said that if it is outsourced, the Internal Revenue Service system technology will be outdated if the service does not work. Raymona Stickell said that a contract is for one (1) year with an option for four (4) years of renewals. The contract is reviewed after three (3) years. It would be very difficult to take back in-house after that time. She said there was a Quality Assurance Plan that has evaluators on site. Once they identify a problem it is resolved within a day or less. There is also a feasibility study looking at processes to assure good outcomes.

Committee Agnes Tillerson asked if there was other outsourcing. Raymona Stickell said that there are five (5) or six (6) other. The internet has the Internal Revenue Service procurement site has a list of the plans. Some of them are Form Distribution, Mailrooms, and Campus Operations (printing equipment).

TAP Program Analyst Sallie Chavez stated that Raymona Stickell had sent an outline of what she has just spoken about. TAP Program Analyst Chavez will forward this to all committee members.

Review of February 20, 2004 Minutes
Committee Chair George Sullivan asked if there was any discussion about the February 20, 2004 meeting minutes. Committee Member Gwen Handelman suggested that on the list of contact # to add a brief description of the contact. This will be done in the future. The committee approved the February 20, 2004 meeting minutes by consensus.

Other Issues
Committee Chair George Sullivan stated that Area 6 has an issue that Area 3 got tagged onto. It has to do with toll-free. The proposal has to do with the option of music or information on IRS services and hold time. Sherry Whah is the Chairperson of that committee. Committee Member Ed Hanna asked, “Wasn't this brought up before?” Comm ittee Member Gwen Handelman said it was but that they wanted it sent up again because there may be funds available to do it in the future. She said that market research showed that the customer did not want information. Committee Chair George Sullivan stated that the customer would get a choice of either music or the information and hold time. Committee Member Agnes Tillerson asked for a copy of the proposal. Committee Chair said he would fax a copy of the proposal to TAP Program Analyst Sallie Chavez to forward to the entire Committee.

Committee Member Ed Hanna stated that this was the first Joint Recommendation elevated to the Joint Committee. Committee Member Gwen Handelman suggested that the proposal be sent to everyone and be put on the agenda for the next meeting.

New Issue Referrals from Taxpayers

CASE 2672
This individual is complaining about a dependency issue where a parent that is the non-custodian is claiming the deduction for the child. This caller thinks the IRS should have to change this.

In this particular situation, the caller is not the child's parent. The caller is quite right that the “other person” is spending the refund while the person that should be allowed the deduction might have to wait many months for the refund.

Committee discussed this issue. Committee Member Gwen Handelman stated that her EITC Issue Committee had a similar situation. Committee Member Helen Curol stated there has to be a better way. Committee Member Sharon Lassar suggested a subject matter expert.

TAP Program Analyst Sallie Chavez will get a subject matter expert to discuss this issue with committee.

CASE 2704
The caller states there is a sign at the Ft. Myers TAC office stating there is no tax preparation on Monday and Friday. Caller states this is 40% of the time available to have taxes prepared and it is unreasonable. She also states there is no sign for the Taxpayer Advocacy Panel in the TAC office to advise taxpayer's to contact TAP with suggestions.

The TAC Territory Manager has been contacted about this. The TAC Territory Manager states that the TAC is operating at full capacity for return preparation based on staffing availability. Currently they are understaffed by two employees in that office. They must manage the resources in order to have staff available for other issues such as tax law questions and account work. The TAC Territory Manager also told me that the budget for next year would be no better than this year. Services at the TAC will remain the same as long as they have personnel. As of this time they are not expecting to hire.

Committee discussed the lack of signs for the TAP at the TAC office. Committee Member Gwen Handelman asked if signs were likely to be made available. Acting Designated Federal Official Nancy Ferree stated they could happen now. Committee Member Handelman said this should be put on the Joint Committee agenda. Acting Designated Federal Official Ferree stated she was aware of a communications strategy. Committee Member Buck Paolone stated that there were requests for such items as posters. Committee Member Ed Hanna stated there have been no posters since the CAP. Committee Member Buck Paolone stated there was a plan. He will send it to Acting Designated Federal Official Nancy Ferree. Committee Member Handelman requested that Chair George Sullivan request this to be put on the May face-to-face Joint Committee Meeting. Acting Designated Federal Official Ferree stated TAP needs to work with the TAC Director to have any posters posted in the TAC offices.

Acting Designated Federal Official Nancy Ferree stated that a letter should be sent to this individual thanking them for bringing up this information. Committee Member Gwen Handelman stated that they should also be told there is a lack of funds. TAP Program Analyst stated that she also advised individuals who call asking for tax preparation about VITA and those sites sponsored by the Internal Revenue Service that prepare returns for free. Committee Member Helen Curol said that should be put in the letter as well.

CASE 2785
This individual is complaining about tax returns being processed outside the United States.

The Outsourcing of Tax Preparation issue subcommittee is covering this.

This will be discussed later in the meeting.

CASE 2794
This individual states that there should be a better method of having tax returns examined. Wants to stop repeat examinations, especially if it is for the same issue that was examined before.

This is a web comment and the individual did not leave any contact information so no additional information can be obtained to clarify what issues are being audited yearly.

Committee discussed this. Since there is no way to discuss this in more detail, the committee decided to drop it.

CASE 2802
Caller would like to see a change to the IRS online search engine used by the IRS.

I contacted the Ad Hoc Committee and this is not something that they are working with Steve Bader on.

Committee Member Gwen Handelman said she had just responded to a survey on this issue. Committee discussed and decided that the individual could go the IRS website and input a suggestion directly to the website. Committee Member Handelman said that it should be emphasized that directly on the website would be most effective.

Communications

1040X Direct Deposit
Committee Chair George Sullivan asked if everyone had received the response from the recommendation. He wants to know if the committee is satisfied with the response. No one had any problem with the response. He will respond back to the Joint Committee that the committee is satisfied with the response.

Area 3 TAP Issues

Outsourcing of Tax Return Preparation
Committee Chair George Sullivan stated that the subcommittee met last week and they wrote up two (2) proposals. He requested Committee Member Owen Oatley to explain his proposal and Committee Member Agnes Tillerson to explain Committee Member Gwen Handelman's and her proposal.

Committee Member Owen Oatley stated the overseas issue was different than domestic. He wants to know how we “punish” someone from another country. There are many issues involved. He mentioned the Congressional letter that he requested to be sent to all committee members that was sent to the IRS Commissioner.

Committee Member Agnes Tillerson stated that the subcommittee parted ways when Committee Member Owen Oatley wanted only to address the foreign issue. She thinks it should be broader. It should cover other than the original preparer.

Committee Member Ed Hanna stated this has been done for 30 years. The relationship is acceptable. Committee Member Agnes Tillerson said she has a problem with outsourcing out of state. Committee Member Hanna stated it doesn't make any difference. There is no control overseas.

Committee Member Sharon Lassar asked how this concerns IRS. She feels it is beyond the scope of the TAP. Committee Member Owen Oatley said IRS can change regulations. Committee Member Lassar stated we cannot regulate tax preparers. Committee Member Agnes Tillerson said there were disclosure and privacy issues. Committee Member Lassar said there were procedures and processes at the IRS. Committee Member Tillerson said IRS should be involved. Committee Member Lassar said that if the proposal was to regulate preparers she will not support it.

Committee Member Gwen Handelman wants this tabled until the Joint Committee can discuss whether committees can recommend issues without the full support of the committee.

Committee Member Sharon Lassar said she has researched identity theft and only found one at H & R Block. There was no research to indicate any identity theft overseas. Committee Member Gwen Handelman said that the H & R Block employee could be identified. There may be no way to identify an employee overseas. It may be harder to enforce and there are no regulations.

Committee Chair George Sullivan said this issue will be tabled until after the May Joint Committee Meeting.

Committee Member Buck Paolone said that the Ad Hoc Issue Committee is working on confidentiality and privacy issues along with licensing of practioners. Committee Member Gwen Handelman suggested our issue be shared with them. Committee Member Paolone said he has.

Schedule K-1
Committee Chair George Sullivan stated that Committee Member Owen Oatley was working with Area 1 Committee Member Paul Nagel to rewrite this proposal. Committee Member Oatley states he and Area 1 Committee Member Paul Nagel have been busy with filing season. They will work on it after 4/15.

Third Party Authorization
Committee Chair George Sullivan asked if everyone had received Committee Member Ed Hanna's proposal. It will need to be rewritten in the proper format. Committee Member Gwen Handelman found a couple of typing errors. These will be corrected in the final proposal. TAP Program Analyst checked to make sure there was still quorum. There was. By consensus it was agreed to elevate the issue after it was put in the correct format. Committee Member Ed Hanna agreed to rewrite his proposal in Joint Issue Referral Format and submit it to TAP Chair George Sullivan and TAP Program Analyst Sallie Chavez by April 5th so that the chair could include it in his April report to the Joint Committee.

Face-to-Face Meeting in New Orleans
TAP Program Analyst reviewed the information on the face-to-face meeting. If anyone is traveling with a spouse and wants to make travel arrangements now, they can contact TAP Secretary Jenny Reyes and she will make their reservations.

Committee Member Gwen Handelman stated there is a problem with the 2nd face-to-face meeting scheduled for September. The travel day is on the first day of Rosh Hashanah. She suggested moving the meeting to earlier in the week. That could cause a problem with the Joint Committee meeting the week-end before. After much discussion it was decided to move the meeting by one day making the travel day on September 17th and having the meeting on September 18th and half a day on September 19th and travel back home on September 19th.

Review of Assignments from Previous Meeting

TAP Program Analyst

1. Send thank you letter to Keith Johnson and other Committee Members who have resigned.
   This was done on February 24, 2004

2. Contact #822 (processing of Form 2553 Election by a Small Business Corporation) – TAP Program Analyst Sallie Chavez along with DFO Carolyn Lewis will work on this issue.
   This has not been completed. Carryover.

3. Contact #2523 (Publication 505 being available on time) – TAP Program Analyst Sallie Chavez will close referral, as there is no taxpayer contact information.
   This referral has been closed.

4. Contact #2486 (Processing Form 990) – TAP Program Analyst Sallie Chavez will close the referral.
   This referral has been closed.

5. Contact #2512 (Faxing Form 2553 to IRS) – TAP Program Analyst Sallie Chavez will close referral, as there is no taxpayer contact information.
   This referral has been closed.

6. Contact #2586 (individual paying estimated taxes) – TAP Program Analyst Sallie Chavez will input this issue into the Taxpayer Advocate Service system called SAMS and close referral.
   This referral has been input into the SAMS system and is showing as transferred to program owner.

7. Contact #2607 (Taxpayer did not receive his 1040 package) – TAP Program Analyst Sallie Chavez will research this issue and report back at the next meeting.
   This has not been done. Carryover.

8. Contact #2617 (Putting individual telephone numbers on tax forms) – TAP Program Analyst Sallie Chavez will prepare letter for chair's signature and close referral.
   Letter was prepared and sent March 8, 2004. Referral was closed.

9. TAP Program Analyst Sallie Chavez will send 1040X Direct Deposit response received from IRS.
   This has been done.

10. TAP Program Analyst Sallie Chavez will send Committee Member Ed Hanna's email about 3rd Party Authorization to all committee members.
    This has been done.

11. TAP Program Analyst Sallie Chavez will transfer the website referral to the Ad Hoc Committee.
    This has been done.

Committee Members

1. Committee Members Owen Oatley, Agnes Tillerson and Gwen along with DFO Carolyn Lewis will look into rewriting the outsourcing proposal.
   This has been done.

2. Committee Member Owen Oatley will work with Area 1 Committee Member Paul Nagel to rewrite the Schedule K-1 proposal.
   Hold over.

3. All Committee Members to send suggestions on how TAP can better assist taxpayer to Committee Chair George Sullivan.
   Hold over.

4. Committee Members to send comments to Committee Member Ed Hanna by March 10, 2004 on the 3rd Party Authorization proposal.
   This has been done.

Committee Member Ed Hanna will write up proposal on the 3rd Party Authorization.

This has been done.

New Issues

Nationwide Tax Forums
TAP Program Manager Nancy Ferree stated the TAP was going to participate in the Nationwide Tax Forums this year as they did last year. This committee will be asked to participate in the Orlando forum (July 20 – 22) and the New Orleans forum (Aug 17 – 19). She will be sending out an email and will request a response by March 30th.

Committee Members Ed Hanna and George Sullivan volunteered for the Orlando forum. Committee Member Gwen Handelman stated that her EITC Issue Committee is planning a face-to-face meeting in New Orleans around that forum. She and Committee Member Agnes Tillerson volunteered for that forum.

Role of the DFO
Committee Chair George Sullivan said that during the Joint Committee call the chairs were advised that the Designated Federal Official (DFO) was not a member of the committee and, as well, are not part of the quorum.

Citizen Input
There were no citizens on the call at this point.

Meeting Close
Committee Chair George Sullivan thanked everyone for their time.

The next meeting is scheduled for April 16, 2004 at 11:00am EST.

Meeting was adjourned.

ASSIGNMENTS

TAP Program Analyst

1. TAP Program Analyst Sallie Chavez will e mail outline from Raymona Stickell to entire committee.
2. TAP Program Analyst Sallie Chavez Email Area 6 proposal on the hold music to entire committee.
3. Contact #2672 (Dependency issue where a parent that is the non-custodian is claiming the deduction for the child) – TAP Program Analyst Sallie Chavez w ill get a subject matter expert to discuss this issue.
4. Contact #2704 (No tax prep on Monday and Friday in Ft. Myers TAC Office and there is no sign for the Taxpayer Advocacy Panel) – TAP Program Analyst Sallie Chavez will send a letter to individual thanking them for the information.
5. Contact #2794 (wants to stop repeat examinations) – TAP Program Analyst Sallie Chavez will close referral, as there is no taxpayer contact information.
6. Contact #2802 (want to change IRS online search engine) – TAP Program Analyst Sallie Chavez will send letter to individual advising them to go on the IRS website and make suggestion directly on the website.
7. Contact #822 (processing of Form 2553 Election by a Small Business Corporation) – TAP Program Analyst Sallie Chavez along with DFO Carolyn Lewis will work on this issue.
8. Contact #2607 (Taxpayer did not receive his 1040 package) – TAP Program Analyst Sallie Chavez will research this issue and report back at the next meeting.

Committee Members

1. Committee Member Owen Oatley will work with Area 1 Committee Member Paul Nagel to rewrite the Schedule K-1 proposal.
2. All Committee Members to send suggestions on how TAP can better assist taxpayer to Committee Chair George Sullivan.
3. Committee Chair George Sullivan will fax a copy of the Area 6 Telephone proposal to TAP Program Analyst Sallie Chavez.

TAP Program Manager

1. TAP Program Manager Nancy Ferree will forward email to all committee member about the Tax Forums.