Area 4 Committee Meeting Minutes

November 19, 2003 

Present:

• James Abraham
• David Cain
• Frank Claudman
• Daniel Drumel
• Robin Gausebeck
• Richard Greenberg
• Delford Jones
• Lawrence Lexow
• Leslie Malcolmson
• Joseph Meissner
• Robert Meldman
• Richard Morris, DFO
• William (Dick) Murphy
• Teresa Smedley, Chair

Staff Present:

• Sandy McQuin, Acting TAP Director
• Marge O'Brien, Acting TAP Manager
• Patti Robb, Note-taker
• Mary Ann Delzer, TAP Analyst

Guests

• Bernie Coston, TAP Director
• Nina Olson, National Taxpayer Advocate

Welcome / Review Agenda
McQuin welcomed everyone. She announced that due to budget constraints, each committee would only get one face-to-face meeting this fiscal year. A discussion ensued and a motion was made to drop the January face-to-face meeting. A motion was made to have the face-to-face meeting July 26, 27, and 28. Murphy abstained from voting, all others approved.

McQuin introduced Bernie Coston, TAP Director. Nina Olson, National Taxpayer Advocate, also joined the call. She announced that she was pleased to have Coston as the new director. It was wonderful to have McQuin act during the interim. She got us through the transition. Everyone will enjoy working with Coston. He is open and likes to have fun.

Olson spoke about refund anticipation loans (RAL). Customer Accounts Data Engine (CADE) has been delayed again, so we have to deal with RALs. Reports done by the Brookings Institute, the Consumer Federation of America, the National Consumer Law Center – those are non profit federations that look for predatory lending or improper credit practices; bait and switch type scams. They have really been hitting hard on the RALs. They basically brought suit against H&R Block and were very successful and got a settlement. More importantly, they made sure H&R practices identified clearly what they did. If the IRS could get the refunds out quickly, that would eliminate the need for the RAL. If you have an account where you could get your refund deposited directly, you could get your money within two to five days. That's where Charles Rossotti was really pushing for the implementation of CADE. There are two broader issues here. The two issues where we need taxpayers' buy in: 1) banking the “unbanked,” and 2) electronic filing. There are too many players who have nothing to do with tax preparation. The problem is not just with the RALs, the problem is the taxpayers need to have bank accounts so that the funds can be electronically transferred. Code Section 7216 is the regulation that says if you are a return preparer, whether you prepare them electronically or on paper that you have to get taxpayer consent to use the information that you have assimilated from the tax return. We tried to come up with some model language for the disclaimer. We don't want everyone to use RAL, but they do serve a purpose.

Nobody has done a survey to see what people think. Why did they need a RAL? Would you be able to wait two to five days to get your money? Could you wait that long? There should be a way to do a survey, a way to ask these questions. Could VITA sites ask these questions? Think about doing something like that because I don't think anyone has ever done that.

You need to spend more time reading reports and doing less research. The research is done.

It is not TAP's job to educate the public about their tax obligations.

Smedley thanked Olson for her time.

Action Items
Still active:

• Delzer to get program owner name for interest offset and netting to Cain.
• Delzer will provide program owner name of FICA/Medicare claims to Claudman

Morris reminded the committee about TAP's mission. Find out what is working and what's not working. Gather information from taxpayers. Talk about TAP and its mission. You can do your own thing as an individual – but not as a TAP member. TAP cannot promote individual topics. You are not a spokesperson for the IRS, you are a sounding board.

Issues

• RAL

Olson told us to focus on 1) education, and 2) alternative to RALs. How do we encourage this? Meissner will get more information on these two topics.

Smedley would like to close this as an issue and put it in the parking lot. Look at sub issues. Continue to gather information and write a report.

Meldman – seek input, survey? Do not send recommendations. Prepare questionnaire why are you using RAL?

Abraham would like to work with Meissner on this issue.

ACTION: Meissner has new pamphlets and will get copies and send out to rest of committee.

• Increase acceptance of E-File

Claudman is still working on the questionnaire.

• Lien Desk Recording

Still do not know who owner is. Delzer and Cain are still working on this.

There are really three issues here: 1) liens not being released, 2) releases not being recorded, and 3) credit companies' not getting/updating information.

• Inclusion of Interest Calculation on Billing Notices

Still working.

• Interest Offset and Netting

Still working.

• Electronic 1040X

Still working although IRS may have handled this already

• 1099S

Need to look at the new instructions to see if this issue is addressed.

• FICA/Medicare Claims

Malcolmson – the instructions are clear. Cannot find anyway for FICA/Medicare not to be withheld.

ACTION: Malcolmson will write up a report for recommendation.

• Schedule D Check-box

ACTION: Greenberg will write up a recommendation for the next meeting.

Due to time constraints, the rest of the agenda will be addressed at the next meeting.

Delzer will send out the outreach report form. Please use it and send it in after each outreach.

Delzer is still working What's On TAP.

Meeting adjourned.