Area 4 Committee Meeting Minutes
April 19-21, 2007 - Milwaukee, WI

Thursday, April 19, 2007
Friday, April 20, 2007
Saturday, April 21, 2007

Designated Federal Official

• Betty Martin, Tennessee

Committee Members Present

• Maureen Amos, Illinois
• Larry Behnkendorf, Michigan
• Robert Broniarczyk, Illinois
• Patricia Bryant, Tennessee
• Paul Duquette, Wisconsin
• Jeff Kennedy, Kentucky
• Anne Khan, Illinois
• David Meister, Wisconsin
• Jerry Melchior, Indiana
• Ferd Schneider, Ohio
• Stan Wernz, Ohio
• Mary Ann Lawler, Michigan
• Marie O’Donnell, Illinois (Friday)
• Lovella Richardson, Tennessee

Committee Members Absent

• Joe Hurr, Ohio

TAP Staff

• Bernie Coston, TAP Director
• Kayla Walker, TAP Manager
• Mary Ann Delzer, Program Analyst
• Patti Robb, Secretary

Thursday, April 19, 2007
1 to 4 p.m.

Welcome / Announcements / Review Agenda
Introductions were done.  It was noted that six of the present members are serving their third and final year.  The issue committee report out will be done Friday morning.

Director’s Comments

• Meet the new program manager – Kayla Walker

Walker started with the IRS in 1988 in Taxpayer Service (TPS); she went to Examination as tax auditor, spent some time in Collection, and currently is an analyst in Taxpayer Advocate Service (TAS) office in Little Rock.  She is on a detail to Milwaukee as the TAP Manager for the next 120 days. 

• National Office Report

TAP’s 2007 budget was approved by the NTA’s office. The National Taxpayer Advocates office was very generous in our allocation, while other offices were forced to take severe cuts, the TAP budget request was approved with a very small decrease.  As a result, all face to face meetings, town hall and tax forums are fully funded for the year.  Recent meetings completed in March:

• Brooklyn Town Hall Meeting,  March 6, 2007
• Notices face-to-face, Atlanta, March 14-16, 2007
• Omaha Town Hall Meeting, March 22, 2007
• Phoenix Town Hall & face-to-face, March 29-31, 2007

Upcoming Meetings in April:

• Area 4 face-to-face, Milwaukee WI, April 19-21
• Area 7 face-to-face, San Diego CA, April 19-21
• Area 2 face-to-face, Raleigh NC, April 25-27

Recruitment
Recruitment is currently moving at an excellent pace.  As of close of business on Tuesday April 17th we had received 265 completed applications and 485 in draft status.  Applications will be accepted through April 30, 2007.  An email will be going out to the people who have an application in draft form, reminding them to finalize their application.  We are looking for about 30 new TAP members. 

Town Halls
With an aggressive schedule the National Taxpayer Advocate conducted three “TAP Town Hall Meetings” during the month of March.  Events were conducted in Brooklyn NY, Omaha NE, and Phoenix AZ.  All venues were well attended and resulted in numerous issues being generated for TAP members.  One point of interest, at the Omaha event a citizen brought the issue of lack of information on the Schedule F form instructing farmers of possible business use of home expenses.  The NTA personally took this issue back to the IRS, and it was immediately accepted.  This is a great example of a TAP success story. 

Commissioners Resignation
Everyone should have received my email that the Commissioner is resigning at the end of May.  The highest officials within the IRS will act as Commissioner until they actually select a new Commissioner.  The Commissioner term is five years.  The Joint Committee should continue to work on the issues they planned to present to the Commissioner. 

Measures Subcommittee
This committee has had a meeting and will continue to meet every other week.  The Communications Committee has a subcommittee working on internal measures.

We need to address the activities or lack of activities in some of the committees.  Employees need to do a better job of working with the program owners.  The program owners also need to ensure they are doing their job.  Coston is looking to make some positive steps as far as issue committees are concerned.  The program owner should bring a year’s worth of work to each issue committee.  There should be a meeting before the committee is formed and expectations should be set up.  We may have to go back to get a recommitment from the program owners. 

Annual Report Progress
Coston spoke to former TAP Chair Larry Combs and he said he will have a draft of the TAP 2006 Annual Report to Toy within a week.  Coston feels the process is not working as it really should; the process needs to be revisited.  Maybe there should be a small committee to work on the report; not just one person.  A timeline also needs to be set up. The annual report should not be assigned to the Communications Committee.  It should be done by all TAP members as there are some very talented people out there. 

Tax Forums
TAP has been offered the opportunity to hold focus groups at the Tax Forums.  They would be structured the same way they were at the town hall meetings.  

Chair Report—Schneider

• Joint Committee Report

The last Joint Committee meeting was held Wednesday, April 4 and the agenda was very full.  The problem was trying to do too much in one meeting.  Two recommendations were discussed; the issue from Area 2, #3743, Form W-9, Request for Taxpayer Identification Number and Certification.   Revision was sent back for clarification.  It was decided the second issue, Area 6 #3942, E-Services, would be looked at during the May meeting.  Not everyone had a change to review it completely.  There was also a “Gold Star” recommendation on the agenda that did not get discussed.  This recommended that the Joint Committee establish a recognition program to allow TAP members to formally recognize a business units and/or individual employees within the Internal Revenue Service (IRS) for proactively making improvements in tax administration.  Schneider said that is not the mission of TAP, and how would we determine this?  Program Analyst Mary Ann Delzer already does a letter to people who assist us to thank them for their input.  It is signed by Coston.  Coston pointed out that is mainly done for the town hall meetings.

Paul Duquette said the staff already has more than enough to do and the Joint Committee has too much to do; so much so that they cannot get through everything on a meeting agenda.  Who will do this?  Stan Wernz pointed out that there will be people who are in a position to do things for TAP and others who would like to but their job does not allow them the time.  This sounds like a lot of housekeeping. 

Leadership should be put on the next Joint Committee agenda.  That needs to be talked about now so the process can be improved over last year.  Larry Behnkendorf suggested having the vice chairs become a subcommittee tasked with working on setting up an election process.  Duquette will take this suggestion to the Joint Committee.

TAPSpace Demonstration and Discussion
Delzer did a hands-on demonstration of the “new” TAPSpace and answered questions.

Friday, April 20, 2007
9 a.m. to 4 p.m.

Welcome / Announcements / Review Agenda
Dan Sostock, Territory Manager, SBSE, and Commissioner’s Representative, welcomed the TAP to Milwaukee. 

Coston announced that the Area 4 roster changed as Rashidah Abdulhaqq resigned due to family health issues.  That opens another slot in Ohio, so we will bring someone in with the newly selected members at the end of this year.  This will be an ongoing issue that the panel has to deal with as people move and lives change. 

TAP Communication Strategy – Maureen Amos and Anne Khan
The Communication Committee is an issue committee.  Most the work is done by the three subcommittees.

• Internal Communication Subcommittee does surveys, handbook, TAPSpace
• External Communication Subcommittee does the outreach toolkit
• Strategy Subcommittee completed the strategy and will not work on as the Measures Subcommittee. 

Issue Committee Review
Mary Ann Lawler said the Ad Hoc Committee was asked to have people to look at Form 8910, Alternate Motor Vehicle Credit.  It was sent out via email for your comments so please look at it and respond with your comments.  Is it easy to read and fill out? 

Stan Wernz reported that the EITC Committee is developing materials to do a focus group.  We do not plan to do the focus groups at the tax forums though as most people at the tax forums are very familiar with EITC.

Dave Meister is on the Notices Committee and they have been busy scoring notices.  The program owner has been very active and does a great job working with the committee.  The committee was asked to look at “stuffers” that go out with notices when they are sent out.  It’s a big project but Meister thinks their recommendation will be one of the better things TAP has done.  There is a potential to save the IRS a lot of money – millions of dollars in postage alone.  The top 20 notices cost the IRS $70 million in postage.  We are also exploring the possibility of the IRS offering the ability to get the stuffers off the internet.  The down side is there will be a percentage of people do not have access to a computer. 

Marie O’Donnell said the Burden Reduction Committee is looking at employment taxes issues.  Some employers utilize an agent to handle that for them and some agents are negligent; then the IRS comes after the employer as the liability ultimately goes back to the employer.  Larry Behnkendorf added that they are also working with Office of Program Evaluation and Risk Analysis (OPERA) and are looking at a few issues; Schedule C - additional opportunities for safe harbor; the aging population; depreciation schedules; 1099 withholding; and e-filing.  Lovella Richardson said they are also looking at gambling losses; mainly casinos and issuing of W-2G. 

Paul Duquette said VITA is disappointed that Kayla Walker is our third manager this year.  Sandy McQuin is on a detail to another position and last year she was instrumental in working with the program owner.  We also had five members of the IRS team on our call in the beginning of the year, but we are now down to one.  We tried to set up a subcommittee meeting but have not received any responses from the IRS.  We need guidance and are not getting it from them.  We started slow like this last year and Coston addressed it and it turned around.  Now we are in the same spot again and it’s been very frustrating.  We need the program owner to lead us; to tell us if what we are working is viable or not.  Pub 3189, Volunteer e-file Handbook, needs to be rewritten.  We started working on it last year and need to complete this task.  Delzer said she was on one conference call and thinks there are a lot of things that could be addressed easily.  Pat Bryant said part of the problem is that a lot of the IRS people are working with the VITA sites too and have been very busy.  Now that the filing season is over, things may start to move.  Some Electronic Return Originators (EROs) are unable to back up returns submitted to IRS; the program is not working.  Duquette said that is one issue in one state and there are multiple issues in all the states.  This committee is made up of true subject matter experts and we don’t understand why they are not taking advantage of that. 

Jerry Melchior is on the Taxpayer Assistance Center (TAC) Committee and he said there are 472 TACs in the United States.  TAC is in the process of doing a survey of them across the country.  We finished phase one and are just about ready to start phase two.  We called the TACs before hand and they went out of their way to help us by setting things up.  We planned to survey people during the filing season and then again after filing season.  We got about 600 surveys from the filing season phase.  We also plan to survey the employees but that needs to go through the National Treasury Employees Union (NTEU) first.  We are still putting the survey for employees together. 

Coston noted that because TAP is an independent body, you were able to accomplish the survey.  TAP does not have to go through all of the red tape anyone else would.  You do not have to go through the Office of Management and Budget (OMB) process like IRS would.  The research folks within the Taxpayer Advocate Service (TAS) played a major role in the implementation of the survey used.  They have been wonderful in working with us. 

Current Issues – Discussion

• Forms 8453 Not Received-Kennedy

PROBLEM
ERO Practitioners that use Form 8453, U.S. Individual Income Tax Declaration for an IRS e-file Return, instead of the Self Select Personal Identification Number (PIN) or Practitioner PIN methods when e-filing returns are obligated to send a copy of the form to the IRS.  The IRS is then charged with pairing the physical forms with the electronic return.  If an ERO fails to send in the forms, the IRS can revoke its e-filing privileges if it fails to improve.  However, some EROs claim that the IRS have sent them incorrect notices stating that the Forms 8453 were not received and they have to scramble to resend paper forms before losing e-filing status.  In other cases, the EROs do not get notified at all before their e-filing status is revoked.

OBSERVATIONS

• During and immediately after the tax-filing season, the IRS is obviously concerned with processing tax returns and sending out refunds before June 1st, after which interest must be paid.  While putting off the work makes business sense for the IRS, it can lead to a disconnect between the one staff contacting EROs about non-received 8453s and the second actually checking to see if the 8453s were received.
• It is the duty of the ERO to provide the IRS with valid contact information.  Some lack of contact problems may result from faulty data being provided to the IRS or a change in the data since it was provided.
• VITA/TCE sites are encouraged to list their local SPEC office as the contact info, but not all do.  What happens is the IRS may then send all their mail to the SPEC office.  However if the site uses its own address, then the notices may be sent to them in the off-season when they don’t have an active staff monitoring communications.
• Many tax filers who utilize EROs would not be technologically savvy enough to create/use Self-Select PINs, plus it involves having one’s Adjusted Gross Income (AGI) from the prior tax year.
• The Practitioner PIN method, which uses a Form 8879, IRS e-file Signature Authorization, could be a viable alternative for some EROs.  The Form 8879 does not have to be filed with the IRS, although a copy must be kept by the ERO or the local SPEC office for three years.  EROs without a permanent staff or facility, such as VITA/TCE sites, may not be able to do this.
• The Form 8453 is the most paperwork-intensive method, since copies are kept by the IRS and the SPEC office, plus they must be paired with the e-filed return.

Subcommittee: Jeff Kennedy (Chair), Pat Bryant, Paul Duquette, Ferd Schneider
ACTION: Kennedy will provide a recommendation on the Form 8453 issue for approval by the full committee.

• Private Delivery Service Addresses-Delzer

Delzer did some research on this issue.  This issue was submitted by someone who did use an approved private delivery service.  The private delivery service information is on page 15 and the mailing addresses are on the last page.  Delzer wrote to submission processing and received a response saying why it could not be done for various reasons. Despite IRS reservations, Wernz will write up the recommendation for the full committee to review.  Consensus to make a recommendation and elevate to Sue Sottile. 

• 1040 ES Automated Access Duquette

ACTION: Put 1040ES Automated Access in the Parking Lot.  Delzer to follow-up on this issue in October to check IRS progress. 

New Issues – Discussion

• # 4106 – Electronic Federal Tax Payment System (EFTPS) issue - Drop
• # 4108 – Return Processing Issue - Bryant asked why does the employer have to issue a Form 1099, Miscellaneous Income, in the first place.  The Veterans Administration (VA) does not issue them because the income is not taxable.  Active.

ACTION: Delzer to send CP 515, Request to File a Tax Return, copy to members and do some additional research.    

• # 4124 – Clarity of Forms, Instructions, and Publications - Lawler will take this issue to the Ad Hoc Committee
• # 4184 – Schedule F, Profit and Loss from Farming.  Active.

ACTION: Delzer will research the audit plan for Schedule Fs and bring back to the committee.

• # 4187 – IRS Website - Drop
• Conflicting Use of 1099-R Codes in IRS Transcripts – Wernz

Taxpayer contacted Wernz for help with a CP 2000 notice.  The Transcript Delivery System (TDS) print out did not indicate the appropriate 1099R codes, when compared to another income transcript that IRS can also provide, called “IRPTRN.”  If taxpayer only used the TDS, the return would be incorrect with the taxpayer owing the wrong amount to tax.    Active. 
ACTION:  Delzer will enter issue Conflicting Use of 1099-R Codes in IRS Transcripts into the contact database and complete additional research. 

• Schneider – Publication 553, Highlights of Tax Changes, for 2006 arrived in his mail box on April 4.  What a waste!  Also got tax tips on March 28 advising about the telephone tax refund.  Why even bother?  Bryant suggested it may be for the people who file for extensions.  Schneider asked if this is something we just have to deal with?  Delzer responded that the numbers of extensions are going up every year and a lot of people wait until the end of April to file.  This all comes down to when Congress makes changes. 
• Identity Theft – Broniarczyk – why not consider using a different identification number other than your social security number (SSN).  Area 2 still has the issue of only using the last four numbers of your SSN when sending out a Notice.

ACTION: Delzer will find out if Area 2 is still working an issue regarding limiting SSNs on notices to four digits. 

• Wernz did an outreach in Ohio and a taxpayer from California asked why the IRS can’t have forms pre-filled out for those of us who file simple returns like the State of California does.  They already have your income from W-2s and 1099s – this is only for very limited returns.  That would save us from paying a preparer.  Area 7 is looking at this issue.  Schneider said it is technologically feasible right now but it is way down the road.  Duquette said in a way we kind of do it now when we carry over information from a prior year when doing electronic filing.  Plus that would take a lot of work away from some tax practitioners.  Khan said this is a cost issue and it would be virtually impossible to do until the tax system is simplified.  Schneider agreed that it would be a huge undertaking.  Duquette thinks just having a fill-able Form 1040, U.S. Individual Income Tax Return, online would be a huge step forward.  If you don’t start somewhere, you will go nowhere.  They require us to file these forms and then walked away from providing them to us. 

Outreach
Schneider does not feel that we need to put individual numbers on ourselves but we do need to set a goal as a committee.  Are we content to commit to collectively at least as much outreach as we have done before?  Some are wondering what their individual obligation is.  How do we compare it with other committees?  Do we care?  Lawler said spreading the word about TAP is important and we should care about doing outreaches.  Shouldn’t we remind ourselves in October that the tax season is coming up.  Wernz said a lot of it gets done when we talk to people one-on-one, but we don’t always think about reporting them.  Meister said he has never seen an outreach from anyone who talked to their fellow employees (those who are not retired).  Don’t these employers ask where you are going when you attend a TAP meeting?
Schneider felt this should be put this on the committee as a whole, not individually.  The key here is the actual reporting.  The number contacted is not a true measurement.  Khan said if we want to measure it as an objective, then we need to do them.  We need an objective but not necessarily individually.  Lawler thinks it should be quantified.  Delzer noted that you may not always get an issue, but sometimes you do make an impression.  This could have an impact when Coston requests the TAP budget each year.  Duquette said if you can’t quantify or measure it, it does not count.  He proposed that as a committee, a goal of 45 outreaches quarterly be set.  That could be three per person each quarter, one each month.  They will be counted as a committee, not individually.  

Saturday, April 21, 2007
8 to 11 a.m.

Welcome / Announcements / Review Agenda

• # 3696 – Audits-Fed/State Sharing – Drop
• # 3204 – Audits-non-compliance-construction industry – Drop
• # 3632 – Failure of Audit Reconsideration Processing – Active  Investigate the specifics of the complaint – would like to see a copy of the series of steps and the letters that go with them

ACTION:  Delzer will send copies of SFR notices to members.

• # 4037 – Private Delivery Service Addresses – Stan wrote a recommendation up – minor changes will be made and it will be sent back out for review. 

ACTION: Delzer to send final version of Private Delivery Service Addresses issues to members for May meeting.

• # 3706 – E-file Forms 8453 not received – Kennedy working on this issue
• # 3638 – Multiple Campuses – Drop
• # 3644 – Notice response delays

ACTION: Delzer to update Notice response delays issue on database to show Notices is looking into similar issues.  Revisit in April 2008.
ACTION:  Delzer will send members information on CADE implementation schedule.

• # 3865 – Address change via internet – Drop
• # 3993 – 1099R Coding – (educational issue) Keep in parking lot
• # 3721 – Email correspondence – Drop
• # 4087 – 1040 ES payments – automated access – Parking Lot

Office Report
Kayla Walker shared her contact information.  She said that there are ten vacancies in Area 4.  The application process will end on April 30, 2007.  The applications will be ranked the week of May 14 and telephone interviews will begin June 18 and run through June 29.  We will need panel members to help interview:

• Paul Duquette
• Stan Wernz
• Dave Meister
• Jerry Melchior
• Ferd Schneider
• Jeff Kennedy
• Lovella Richardson
• Bob Broniarczyk
• Anne Khan

TAP will have a booth at the Chicago Tax Forum, July 31 to Aug 1, 2007.  We need several volunteers to work in the booth:

• Anne Khan
• Pat Bryant
• Jeff Kennedy

Meeting Adjourned

Next Meeting – Conference Call on May 15, 2007, 10 a.m. CT