Area 5 Committee Meeting Minutes

June 13, 2006

Designated Federal Official:

• Marian Adams, Local Taxpayer Advocate

Committee Members Present

• Sandra Bland, Bemidji, MN
• Howard Guthmann, St. Paul, MN
• Steve Landauer, Davenport, IA
• Ralph Rivera, Garland, TX
• Richard Rousseau, Killeen, TX
• Lee Stieger, Leavenworth, KS
• Warren Wong, Rochester, MN

Committee Members Absent

• Elizabeth Colvin, Austin, TX
• Bob Meyers, Omaha, NE
• Mary Suther, Dallas, TX

TAP Staff

• Mary Ann Delzer, Program Analyst
• Patti Robb, Secretary

Visitors:

• Dominic McClure, H&R Block

Welcome / Roll Call / Review Agenda
Stieger welcomed everyone to meeting. Quorum met.

Minutes approved by consensus for the May 9 / May 22-23 meetings.

Joint Committee Call--Rivera
The memos to be prepared for the Commissioner were discussed at the Joint Committee meeting, including the Free File issue assigned to Area 5. Rivera commended the sub committee for their work. Joint Committee would like something to review at Denver meeting on June 29-July 1. We will try to meet dates if possible.

Issue discussion

• Training for Forms/Pubs Employees - Landauer
  McQuin is setting up a conference call with Sue Sottile to discuss the issue.

• POA Issues – Rousseau
  Guthmann has written up a possible recommendation and Delzer sent it out to the subcommittee. Will need to set up a subcommittee call to discuss the previous responses received from the IRS.

  Guthmann noted that Delzer found that Area 3 is working on a similar issue. They are talking about the check box authorization being legislative. Have read the check box burden reduction project information and Commissioner Rossotti said it should enable the resolution of questions regarding the processing of taxpayers returns. Need to research further to see if this is legislative. Rossotti provided statistics in his report about burden reduction. Feels it is not in the law and could be done without legislation. Landauer agreed that this is definitely a real issue. Rousseau stated that we should look at the legislative history; it may provide more backing. The check box is only good for one year and the IRS admits they seldom get to examining return within one year.

ACTION: Rousseau to set up conference call for the POA subcommittee.

ACTION: Guthmann will write a draft recommendation on POA for discussion at the subcommittee meeting.

• Toll Free Issues – Guthmann
  Delzer arranged a meeting with four people in Atlanta who staff the call sites. They claim the average wait time is 4 1/2 minutes and my office has never gotten a response that quickly. We need to discuss with IRS to see what possibilities can improve the response rate. They have to be open to change. So many people don’t have difficulties and they have their issues taken care of quickly, but the problem cases are the ones not being taken care of timely. Landauer and Guthmann will have another call with SERT. They used to operate under a temporary employee model and are now going under a permanent employee model. Adams stated TAS gets the problems and it’s difficult to identify how many people are really impacted. It is something the IRS has been working on year after year.

• Free File – Bland
  Bland has written a draft Free File report for the Commissioner. Area 5 needs to decide whether it is ready to go to the Joint Committee.

  Landauer stated he was at a tax forum and they discussed paper vs. e-file. There was less than a $2 cost difference between them. The real issue here is the accuracy as the error rate on an e-filed return is 3% and for a paper return is 24 %. That is a significant difference.

  Guthmann also said the problem is accuracy, error and the rejection rate. It is awful to have an e-file return rejected because name and the ID number don’t match.

  Bland said when the advisor of the National Taxpayer Advocate said they were trying to get the hard numbers on the cost of paper filing vs the cost of e-file to calculate the real savings.

  Guthmann said isn’t the issue whether free filing is going to be free for everyone or not?

  Landauer’s concern is why should anything be free? It’s life to have to pay for things.

Guthmann stated why should we have to pay for something the IRS requires us to do?

Bland reminded everyone we don’t pay the IRS, we pay the software companies.

Stieger stated that people feel that the IRS is charging people to do it. If the software is going to charge extra to e-file, why shouldn’t I mail it in? They need to provide an incentive for me to e-file. Guthmann said the software companies set this up by charging extra to e-file the return. If they didn’t have to pay extra to e-file, the numbers would increase. If the software would e-file it for you and could guarantee it would be accepted, there would be a tremendous increase.

Bland explained that the returns could be batched by the software companies for the IRS. In short term could go with template plan rather than the IRS developing the software.
Wong said that if it was thrown open for competition it would be better.

Rousseau agreed stating the advantage to having fees keeps the commercial software competitive. Having all filing free will dry up competitiveness. Competitiveness keeps the improvements coming. They keep trying to make it better.

Delzer suggested that Area 5 send the draft report to the Joint Committee for consideration. They can return the report to Area 5 for further clarification.

Consensus to send to Joint Committee by June 23 before Joint Committee meeting at end of month.

ACTION: Bland to send final draft to Delzer to forward to the Joint Committee before June 23, 2006.

Outreach
Please review the report that was sent out.

Office Report
We will be interviewing the new applicants next week so if anyone wants to participate, please call the office.

Public Input
None

Closing / Assessment
Good discussion and moved along. Spent a good deal of time on e-file, but it is a very hot issue. Good job with report. Meeting adjourned.