Issue Committee (W & I EITC) Meeting Minutes

May 8, 2003
Atlanta, GA

Opening of the Meeting
The meeting was called to order at 1:06 P.M. EDT. Handelman welcomed members to the meeting.

Panel Members Attending

• James Banks, Bozeman, MT
• Laura DeMarais, Crystal, MN, Vice Chair
• Daniel Drumel, Wind Lake, WI
• Gwen Handelman, Fort Lauderdale, FL, Chair
• Cheyanna Jaffke, Placentia, CA
• Catherine Kelly, Corinth, ME
• Leslie Malcolmson, Detroit, MI
• Robert Maziarz, Hainesport, NJ
• Shamsey Oloko, Staten Island, NY
• Joe Reder, Richland, WA
• Deryle Temple, Washington, D.C., Acting DFO
• Agnes Tillerson, St. Marys, GA
• Faith Vinikoor, Baltimore, MD
• Nan Wilson, Overland Park, KS

Absent

• Robert Burke, Chicago, IL
• Sandra McQuin, DFO

TAP Staff and IRS Staff Attending

• Marisa Knispel, TAP Program Analyst
• William Phillips, EITC Program Owner

Review and Approval of Minutes
Handelman requested a couple of revisions be made to the April 23rd minutes. Revised minutes were approved.

Joint Committee Report
Handelman reported to the members on the response to questions previously forwarded to the Joint Committee.

On the subject of TAP membership and staggered terms, the Joint Committee proposed that after the initial two-year membership commitment, one third of the current membership volunteer to continue on the panel for an additional year. New members will be selected for a two-year term. The proposal is to be submitted to the TAP Director and NTA for approval.

Handelman requested additional feedback on Form 8867 at the Joint Committee meeting. TAP staff will circulate the request via email to TAP committee chairs and practitioner members. Handelman reported that at the Joint Committee meeting, it was announced the Ad Hoc Committee might be asked to look at financial literacy issues that impact taxpayers, including Refund Anticipation Loans. In addition, matters related to individual electronic filing will be handed off to the Area 5 Subcommittee working on this topic.

On the subject of working on two committees and the stressful effect it has on TAP members, it was decided that only the committee chairs had the option to be excused from active participation on their second committee. This option was not provided to the remaining members. Each committee chair is empowered to provide relief from attendance or active participation on the committees to members based on individual situations.

Handelman explained the directive given by NTA Olson at the Joint Committee meeting in reference to formulating and/or proposing legislative recommendations. This directive was addressed in writing to the Chair of the Joint Committee and copies were provided to all committee chairs. Committees may forward legislative recommendations to the Executive Director for Systemic Advocacy.

Lastly, Handelman spoke about the TAP's new internal website called TAP Speak. Postings to this site and a members-only chat room may relieve some of the e-mail burden that panel members have experienced.

Program Owner Report
Phillips requested the committee's input on the issues of the IRS's Return Preparer Program, due diligence and the recertification process.

Discussion on Form 8862 as part of the recertification process took place. Phillips indicated that the committee could aid in the improvement this form, such as when this form is required to be filed, and if a different process should be established to indicate the taxpayer's desire to begin the recertification process. If a proposal is made to submit documentation, how would this be accomplished and what impact would it have on the taxpayer's ability to file electronically.

A TIGTA Report was distributed to members containing studies done on the EIC and the recertification program. Phillips asked members to read the report so that they may better understand some of the issues revolving around recertification.

Phillips requested that it would also be timely for the committee to review, comment on and suggest changes to the professional guide for practitioners.

Given limited resources, Phillips asked, should the IRS be charged with educating taxpayers and tax practitioners? What level of funding should be allocated to the education and training of practitioners, considering they are paid for their services?

Oloko asked if the On-LineTax Advisor used by IRS staff could also be made available to taxpayers and/or tax practitioners. Phillips indicated that IRS is investigating the feasibility of providing this service, but one big concern is the issue of confidentiality.

Subcommittee Reports:

Education, Publications and Forms- Chair Kelly
Subcommittee chairs Kelly and Vinikoor will meet to clarify the Education and Compliance subcommittees' new tasks.

Kelly indicated that the Education Subcommittee will hold a teleconference to discuss their revised action plan. This subcommittee has spent many hours on the proposed Forms 8836 and 8856 related to precertification with the final product being feedback on both the process and the specific forms. Handelman commended them for their efforts. Phillips stated that some of the ideas presented by this group were under serious consideration by the EITC Joint Task Force.

Kelly indicated that the subcommittee will focus its efforts on preparer education and training, including the EITC Tool Kit. Phillips requested that the subcommittee also review educational information that IRS distributes to tax practitioners.

Handelman requested that Phillips provide the EITC Committee with information, as it becomes available, involving the strategy of the Return Preparer Program.

Marketing and Outreach- Chair Malcolmson
Upon Drumel's resignation as chair, Malcolmson volunteered to take over the leadership of this subcommittee.

Malcolmson stated the goals of the subcommittee are: expand participation in EITC, expand participation in the VITA program, and look at the issue of the high rate of non-response to EITC letters.

Malcolmson said it would also be helpful to have more meetings with a SPEC representative, meet with local SPEC officers, and review and evaluate their brochures and other material. A SPEC representative will be invited to at their next teleconference, or if all committee members are interested, at our next committee meeting. We should keep the Powerpoint presentation we received until this future presentation.

The subcommittee agreed that it would be much more effective to market the EITC nationally, rather than on a local basis. Subcommittee members agreed that marketing efforts on the part of TAP could be propelled forward if area committee members became involved in EITC outreach. They requested the list of SPEC's partners/ coalitions involved in the national marketing effort of the EITC as well as the VITA Assessment Document. They expressed concern that EITC-qualifying taxpayers in rural areas might not have good access to volunteer preparation.

The subcommittee decided to place the marketing and expansion of the VITA Program and the study of EITC claimants' non-response to IRS notices in the parking lot at this time as the IRS, per Phillips, is doing studies on both issues. We will work with Phillips to review the results of these studies when they are available.

Over Claims - Chair Vinikoor
This subcommittee has various issues on their agenda. Vinikoor explained the committee is currently gathering input, and will report recommendations for improvements to Form 8867. Handelman will again request input from other committees through the joint committee structure. The second item on the subcommittee's agenda is the recertification process as it relates to Form 8862. The subcommittee will also review its language and instructions to taxpayers.

Vinikoor requested statistics on the number of IRS notices that are sent to EIC claimants and related underclaims or non-responses. Vinikoor mentioned that it might be a good idea to include a copy of Form 8862 in the mailing with the IRS notice.

Member Oloko asked about changing Form 4549. Handelman explained that IRS is currently drafting a Form 4549EZ. Phillips added this EZ form is strictly for EITC use.

New Business

Employer Role in Precertification
Drumel read aloud an email he sent to all members suggesting the development of an innovative program that could assist the IRS in gathering precertification data. His proposal involves employers scanning their employee payroll records in the month of May and earmarking those employees that seem to meet EITC eligibility. The employer would then send a notice to the employee advising him/her of the possible eligibility and of the application requirements (precertification forms). The employer would also send the employee's information to the IRS. The proposal would allow for an effective precertification program and provide precertification data to the IRS. At the same time, Drumel says, IRS would be able to concentrate its resources on the EITC program during its active time period, thus increasing participation and reducing fraud.

Members discussed Drumel's proposal. Tillerson saw this proposal as a mandate, while Handelman thought it was of administrative nature. Phillips clarified the discussion by stating that IRS cannot require employers to forward information on the employees unless it is done under a legislative mandate. Also, IRS may not require employers to distribute EITC information to their employees.

Handelman explained that this proposal might be an opportunity for the committee to join in SPEC's efforts with local coalitions in an effort to bring money into a community. The proposal, she said, would have to be revised and the word "require" replaced.

Maziarz suggested that the Form W-2 be revised to add a "Note" to the recipient making him/her aware of the EIC. Handelman asked that this suggestion be made in writing. Vinikoor suggested a flyer be included with the W-2 when mailed to employees. This may be more efficient than revising the W-2.

Jaffke added that a media blitz on the EIC and the new precertification requirements may be useful.

Discussion ensued on the Advanced Earned Income Credit (AEIC) and Banks explained that most taxpayers do not claim the AEIC because of fear that their situation may change and have a balance due the IRS at the end of the year instead. For personal economic reasons, Banks said, most taxpayers seem to like receiving the large EIC payment as a refund.

Jaffke objected to Drumel's proposal by saying that it would cause all EIC claimants to complete and file the precertification required forms, including those who do not need to precertify. The effect would be the same as including Form 8862 with the tax forms package prior to April 15th. Discussion followed.

After Drumel's attempt to withdraw his proposal, Handelman expressed that she was reluctant to accept the withdrawal and asked Drumel to revise it instead.

Other
Phillips stated that none of the information presented at the May 7, 2003 sessions was to be considered private.

Jaffke recommended that IRS include the box in the Form 1040 that states, "If you want the IRS to calculate the EIC, check the box." This would alleviate numerous math errors on the returns. Phillips requested that this suggestion be made in writing and forwarded to the EITC Program Owners. Handelman requested that this suggestion be worked and referred by the Education Subcommittee.

Public Input
None.

Closing Assessment
Handelman asked members for feedback and comments regarding these sessions. In a round robin members indicated that they found this face-to-face meeting and the participating IRS speakers to be very informative. Meeting Assessment Surveys were returned to Handelman at the end of the meeting.

Handelman thanked the IRS staff and EITC Program Owners for the meeting. She also thanked TAP Director Temple for joining us.

NEXT MEETING:
A tentative teleconference has been scheduled for Wednesday, May 21, 2003 at 2:00 p.m. EDT with Sue Sotille, SPEC Director of Strategic Planning as the featured guest.