Area 4 Committee Meeting Minutes

Conference Call
September 27, 2005

Designated Federal Official

• Richard Morris, Local Taxpayer Advocate

Committee Members Present

• Maureen Amos, Illinois
• Larry Behnkendorf, Michigan
• Adrienne Bell-Stampley, Illinois
• Robert Broniarczyk, Illinois
• Paul Duquette, Wisconsin
• Richard Greenberg, Illinois
• Donna Hafer, Kentucky
• Delford Jones, Indiana
• Leslie Malcolmson, Michigan
• Lovella Richardson, Tennessee
• Teresa Smedley, Indiana, Area 4 Chair

Committee Members Absent

• James Abraham, Ohio
• Steve Hoffman, Ohio, Area 4 Vice-chair
• May Ann Lawler, Michigan
• Joe Meissner, Ohio
• Donald Miller, Tennessee
• Ferd Schneider, Ohio

TAP Staff

• Sandra McQuin, TAP Manager
• Mary Ann Delzer, Program Analyst
• Patti Robb, Secretary

Visitors

• None

Welcome
Teresa Smedley welcomed everyone to the call. This is the final meeting for this committee this fiscal year.

Roll Call
Quorum was met with 11 members present.

Chair Report

Joint Committee report
Smedley reported on what happened at the Joint Committee face-to-face meeting in Las Vegas. Everyone should have received an email from Gwen Handelman requesting suggested topics to discuss with the Commissioner before the annual meeting in Washington, D.C. Please respond to her to share your ideas.

A draft agenda has been done for the annual meeting. She was pleased that almost all of the TAP members’ concerns from last year were addressed. Each committee, area and issue, will have a full four hour face-to-face meeting during the annual meeting. That way each committee will be able to hit the ground running.

Status of elevated recommendations
Smedley thanked all members present for the special meeting held September 9th to look at the issues submitted by the RAL subcommittee. She said she was very impressed by the way the Area 4 issues always sail through the Joint Committee approval process. They are always properly researched and well written. All our Refund Anticipation Loan (RAL) issues were accepted for elevation with grammatical changes only.

The Form 990, Return of Organization Exempt From Income Tax, recommendation was not elevated by the Joint Committee. TAP did not do the original work – it was more of a letter to support the Advisory Committee on Tax Exempt and Government Entities (ACT) report. We felt they did a tremendous job and supported all their recommendations. After some editing, this recommendation will be resubmitted for approval to the Joint Committee at the October meeting.

Area 4 Self-Assessment
Smedley compiled all the information from the individual members and the subcommittees. It is not in final form yet, so if you notice something needs to be added or changed, let her know.

Public Input
None

Innocent Spouse Focus Group
Delzer thanked everyone who participated in this call. TAP members from several Areas participated. Michael Chesman and Lisa McLane, of the Office of Taxpayer Burden Reduction, briefed the attendees about the Innocent Spouse improvement process team. They were very receptive of the suggestions made by the panel members. Delzer will follow-up with on the team’s progress in four months for an update on how TAP can further contribute.

Refund Anticipation Loans (RAL)
Broniarczyk reported on the call with Bob Weinberger of H&R Block. The call was very informative. As far H&R Block is concerned, their preparers do not get a direct financial benefit for offering RALs. Greenberg said they also talked about the debt indicator and the privacy concerns. The only RAL recommendation that Mr. Weinberger could not support was the one regarding the discontinuation of the debt indicator. Other than considering the IRS response, this subcommittee has completed the work. Smedley thanked the subcommittee for all the hard work.

Form 990
Duquette said two recommendations have been submitted;
1) support of the ACT Report, and 2) that Publication 4221, Compliance Guide for 501(c)(3) Tax Exempt Organizations, should be sent to all new non profit organizations with their determination letters. Broniarczyk suggested changing the last sentence of recommendation two. Smedley suggested to remove the comments about what the committee had done previously and re-write the background sections.

DECISION: Consensus reached to make the changes and elevate both recommendations to the Joint Committee for the October meeting.

Volunteer Income Tax Assistance (VITA)
Duquette reported that he went to Atlanta the week of September 12 for a TY2005 Quality Review of ARPP/VITA Course Materials Review, including Publication 678, Volunteer Assistor’s Guide, Student Text, Publication 4012, VITA/TCE Resource Guide, Publication 1155, Volunteer Assistor’s and , Instructor Guide. It was a very rewarding experience. The training is broken into basic, medium, advanced, and military. They were very receptive to TAP input and will invite panel members next year. Smedley said that the fact TAP was invited again this year, speaks volumes of Area 4’s involvement. Al Vivona, Hal Gadon, and Lyn Sinnamon also attended this meeting. McQuin reminded all that these activities have been a great success, and that VITA will become an issue committee next year.

What’s On TAP
Duquette reported that nothing was done this month. Would like the continuing members to join Lovella Richardson and Paul Duquette in this and help write some articles. Also, they will be contacting the exiting members for articles. Smedley reminded them that they will be meeting with the new area members in Washington, D.C., and can bring it up there.

New issues
Tabled for consideration at the November meeting.

Outreach
Remember to send all your outreach reports to Delzer ASAP.

Office Report
McQuin said that the annual meeting was extended by a half day to allow the area and issue committees to have a full face-to-face meeting. We had difficulties in securing hotel rooms for the annual meeting. There is a possibility that you may have to change hotels after the first day of your stay in DC. The staff will unfortunately be staying at a different hotel during the meeting.

National Taxpayer Advocate Nina Olson is planning town hall meetings for each TAS area. She wants TAP members to host these meetings. Coston asked for volunteers to help with the planning. These meetings will be based on Olson’s schedule. They are trying to tie them in with other events, i.e., the LITC conference in Philadelphia. TAP members will introduce Olson, and will also speak about TAP. She has given TAP the opportunity to work with the TAS marketing vendor to do the publicity. Hopefully we will have dates and places set within the next two weeks. We are also hoping to cover rural locations.

Coston will be sending out an email soon asking the continuing members to make a decision as to what issue committee they would like to be on. He will include information about the focus of each issue committee in the email. He is also going to be asking each panel member to evaluate their commitment for the next year. Some members have become somewhat inactive. Please determine whether you want to continue as a TAP member. If not, we will have time to get a replacement for the annual meeting.

McQuin said it is sad to say goodbye to Jim Abraham, Dick Greenberg, Delford Jones, Leslie Malcolmson, Joe Meissner, and Teresa Smedley. She thanked them for their dedication and hard work. They have all contributed to Area 4, the TAP panel, and the IRS. She said we will also be saying goodbye to Richard Morris as there will be a new DFO onboard next year. He brought a lot of value to TAP.

Morris told the members to keep pushing the IRS. He thanked everyone for their passion and input and said he admired their dedication.

Action Items
All Complete

Meeting Adjourned

Joint Committee Issue Referral Form

TAP Committee: Area 4
TAP Database Number: 3652
Short Description: Include Pub 4221 in Determination Letters
Date Approved by Committee: 9/27/2005

Members of Subcommittee/Author(s): Paul Duquette (Chair), Jim Abraham, Steve Hoffman, Mary Ann Lawler, Leslie Malcolmson, Joe Meissner.

Statement of Issue:
The Advisory Committee on Tax Exempt and Government Entities (ACT) project “IMPROVE” report, “Recommendations to Enhance the Compliance on Newly Formed Charities” dated June 8, 2005, states the following:

". . . the vast majority of exempt organizations want to comply with the requirements of their exempt status. Unfortunately, despite significant educational and outreach efforts by the IRS Exempt Organizations division (“EO”), some charities fail to obtain the information necessary to do so. Too often, newly formed charities pass through these transitions with insufficient guidance. Ill-informed charities, no matter how well intentioned, are more likely to fall into patterns of noncompliance and are at increased risk of manipulation by unscrupulous persons and promoters."

Goal Statement:
To improve the compliance of newly formed charities, by providing additional IRS outreach to the non profit sector.

Proposed Solution:
Include Publication 4221 “Compliance Guide for 501(c)(3) Tax Exempt Organizations” with both the initial determination and final determination letters sent to all newly-formed 501(c)(3) organizations, in order to educate them regarding their responsibilities as an exempt entity.

Background, Research, and Analysis:
Area 4 continues to hear from non-profit organizations that have concerns about meeting their filing and record keeping requirements. These organizations are often managed by volunteers and look to IRS for free assistance.

The Exempt Organizations Customer Education and Outreach (CE&O) office develops the strategic direction of the nationwide education and outreach programs for these Exempt Organization customers. CE&O coordinates the development of printed materials such as the new “plain talk” Publication 4221, which is designed to meet the needs of the organizations who have contacted TAP.

Benefits and Barriers, Including Impacts of the Proposed Change:
Publication 4221 is organized as follows:

a) Why keep records
b) What records should be kept
c) How long records should be kept
d) What federal tax reports and returns must be filed
e) What disclosures must a 501(c)(3) organization make
f) IRS assistance

Publication 4221 is not only a well written, “plain talk” guide for newly formed organizations, but could also be beneficial in aiding all 501(c)(3) organizations in achieving compliance.

Barriers would include an increase in the printing budget for CE&O as historically 90,000 determination letters are issued each year, and the current printing budget for this area is inadequate.

Summary and Conclusion:
At a minimum, the IRS should include Publication 4221, with determination letters and, whenever appropriate, with all other correspondence with 501(c)(3) organizations.