Ferd Schneider welcomed everyone to the call.  He thanked Bob Meldman for joining the call to explain statutory notices of deficiency.

LITC-University of Wisconsin Milwaukee
Schneider asked Bob Meldman to explain what they are, how do they occur, how do they impact the taxpayer, and when are they sent out. 
 
Meldman gave a little personal background.  He did tax litigation for 45 years; as a former TAP member, he was Chair of Area 4, and Vice Chair of TAP.  He took over the Low Income Tax Clinic in Milwaukee at the University of Wisconsin.

A Statutory Notice is at minimum, the third notice the taxpayer gets. The 1st notice is to notify them of an audit or adjustment, and asking for substantiation. The 2nd notice in a 30-day letter.  It provides that if you want to contest the adjustment, you can go to the Appeal Division of the IRS. The Statutory Notice is last notice.  It comes at end of the period of time the IRS has provided for an administrative appeal.  The language is statutory.  The taxpayer has 90 days to appeal before going to tax court.  There has been added paragraph to the Statutory Notice that you can to the Taxpayer Advocate Service.  If you don’t want to go to tax court, you have to agree to assessment and do that by signing the letter.  During the 90 day period that the taxpayer has to appeal before going to tax court, the IRS cannot do anything.  McQuin asked if the taxpayer can contact the IRS to provide information during that 90 day period.  Meldman said they can try that and can go to Appeals.  If they can resolve it in the 90 days, great.  There is a form the IRS can use to rescind notice if they are able to resolve the issue. The Statutory Notice comes via certified mail.  The other notices get sent via regular mail.  Some taxpayers move and have not seen the first notices and some just choose to ignore them.  There are two sides.  Meldman said the Statutory Notices have to be mailed to the last known address.  If you are out of country, you have 150 days to respond.  The letter says you can file a simplified procedure if the adjustment is $50,000 or less and can go to the IRS web site. The very last paragraph says you can contact TAS.  The notice also shows the last date to file; the date is at the top of the letter.  Schneider said TAP cannot help every taxpayer from themselves.  Meldman said the notice is self explanatory and no, you cannot help everyone.  Pat Bryant thought there should be some way to highlight the point that if you sign the letter, you are agreeing to the assessment.  It’s not just that you don’t want to go to tax court, but you are agreeing to the amount shown on the letter.  Taxpayers need to understand they are agreeing to pay the deficiency.  Meldman said by highlighting that part, some people will not read beyond.  What is highlighted is what you read.  If they do nothing, the assessment will be done in 90 days and then it will drop into collection.  And that will result in additional interest.  Schneider thinks the committee has enough information to discuss.  Do we want to pursue this?  Issue will remain open with Bryant continues to work.  He thanked Meldman for his time and the information.

Area 4 Chair Report - Schneider

• Joint Committee Report

Public Input
None.

Issue Discussion

• Conflicting use 1099R Codes – Wernz

Stan Wernz said they are still waiting for information from the subject matter expert (SME).  He feels we should write up the issue with the information we already have.  Mary Ann Delzer and acting TAP Manager Kayla Walker sent many emails to this person looking for more information but haven’t received any responses.  This information was sent to TAP Director Bernie Coston.  He will discuss the issue with Director of Tax Forms and Publications Sue Sottile to see if she can light a fire under the SME to get him to respond.  Bryant and Maureen Amos offered to help Wernz write the recommendation. 
A second issue is records available to IRS people are not available to the taxpayer. 

• Failure of Audit Reconsideration Processing - McQuin

Issue #3632 - Delzer is in Washington, D.C. for two weeks ranking application packages for LITC clinics.  She needs to do more research.

• Recognition of Private Letter Rulings - McQuin

#4108 - Delzer needs to do more research

#4267 – Estimated Tax – drop

#4271 – TaxWise Program – refer to VITA Committee.  Duquette will pass this information on to Hank Mosler who will be meeting with the TaxWise programming staff in October.  Area 4 will put it in the parking lot; awaiting feedback from Mosler.  Bryant does not think this is a TaxWise issue – it is a training issue.

#4277 – E-file current year 1040X – McQuin said the 1040X is on the IRS list for future e-filing.  Issue to parking lot.
ACTION:  Delzer will find out when Form 1040X will be looked at for e-filing. 

#4210 – Allow Suspension of Return Processing – Bryant said she would like to look at this issue.  With EITC the way it is, identity theft is a growing problem.  Refunds are given to fraudulent filers and then the IRS has to try to get them back.  The person who’s identity is stolen has to do a paper return and then has to wait for refund.  This issue says to revise Form 9452, Filing Assistance Program (Do you have to file a tax return).  The IRS does not have any process to stop this refund from going out even though the person filled out a form to inform the IRS that their identity was stolen.  That will probably not work the first year someone steals the identity, but subsequent years should be flagged.  She would like the IRS to set up a process to watch for fraudulent returns to come through with the same Social Security Number (SSN). 
McQuin said there is an issue out there and that is why is the burden put on the person whose identification has been stolen.  Why do they have to prove it year after year? 
ACTION:  Delzer will do research to see if the above issue is being worked.  Take this issue out of parking lot and put it in active status (research).

Jeff Kennedy – rapid refund is done after a check with the IRS.  The IRS could flag the account with an acknowledgement code.  Kennedy offered to take lead on this issue once research comes back from Delzer.

#4219 – Direct deposit refund and IRA contribution – Schneider thinks an issue committee is working on this issue.  Someone from IRS sent out an email message requesting information on split refunds.
ACTION:  Delzer will find out who in the IRS was requesting information for the split refunds.  Take out of parking lot and wait for research from Delzer. 

#4220 – New EIN and LLCs – Bryant thinks this issue should be taken out of the parking lot and dropped.  The rules are very clear. 
ACTION:  Drop

June – seven outreaches by four members
July – eleven outreaches by four members
Annie Khan went to tax forum in Chicago and got a lot of comments. They will be added to the contact database.  McQuin said six people attended the focus group and it was very productive.  Issues will be forthcoming.  She was very excited that there were quite a few people who knew who we were and didn’t confuse us with TAS. 

Patti Robb was selected as Secretary to the Director, Bernie Coston. Rich Morgante gave all the outstanding responses from W&I to our recommendations.  Program Analyst Barbara Foley will put them on the database and you should be able to discuss them at your next meeting. 

Schneider reminded everyone to go to TAPSpace to read the executive summary of the annual report.  There is also a news release that you can send out in your area.