Issue Committee (W & I EITC) Meeting Minutes

April 21-22, 2006
1111 Constitution Avenue NW
Washington, DC 20224

Friday, April 21, 2006, 8:30 AM – 5:00 PM

Program Owner

• Philcox, Crystal—Director, EITC Systems/Stakeholder Engagement

Designated Federal Official

• Ramirez, Sandra — Program Manager/DFO

Committee Members Present (These attendees count for quorum)

• Broniarczyk, Robert — Romeoville, IL
• Davis, Blanche— Rehoboth Beach, DE
• Lawler, Mary Ann — Dearborn, MI
• Mitchell, Patrick — Provo, UT
• Richardson, Lovella — Knoxville, TN
• Smith, Mavis — Chula Vista, CA
• Woo, Lillian (Beadsie) — Durham, NC, Chair

Committee Members Absent

• Margulies, Howard — North Easton, MA
  McKenzie, Clifford — Del City, OK
  Natter, Joyce — Miami, FL
  Uhrig, Edward — Lusk, WY

TAP Staff

• Coston, Bernard — TAP Director
• Jenkins, Audrey — TAP Analyst
• Odom, Meredith — TAP Management Assistant

Other Attendees

• Johns, Vivanne — EITC Senior Program Analyst
• Knight, David — EITC Senior Program Analyst

Welcome/Review Agenda
Beadsie welcomed all members and IRS staff. The meeting was opened at 8:32 am.

Roll Call
Quorum Met

Committee Update
Woo and Coston gave the committee an overview on the meeting with IRS Commissioner Mark Everson. There was a discussion on how TAP could protect personal privacy with the sale and distribution of data becoming more common. VITA and TCE sites can be an asset to the organization in the future. Woo and Coston also reported on the meeting with Sue Sottile. Sottile’s recent response to a set of recommendations from Area 2 addressed each separate recommendation, making it easier for TAP members to understand what can and cannot be changed.

National Office Update
The recruitment process is going well. As of April 21, 2006 (with one week left in the application period), 455 computer applications had been submitted online, and 20 paper applications received. There are over 1000 online applications in draft form. These applicants were contacted and reminded to complete their applications. There are only 28 vacancies for panel members, and the website lists which states have vacancies. TAP recruitment is on the front page of IRS.GOV. Articles also appeared in local newspapers as well as the Wall Street Journal. A timeline of late May and early June has been set for ranking and Interviews. By August, selected applicants’ names will go to Treasury for final approval. The 2006 Annual Meeting will take place the second week of December. Chair training was beneficial and will continue to take place.

Researchers
Johns presented the committee with a handout about research on what we do and do not know about EITC customers. The research was conducted to establish the population’s size, understand the population’s needs, dentify trends, determine where to target customer assistance efforts, educate, and measure effectiveness. What the IRS needs is information to improve EITC participation by qualifying individuals, including ways to leverage Tax Preparers, identifying and prioritizing the needs of individuals with language barriers, and making suggestions that improve EITC return accuracy.

Technology Projects
Philcox presented the committee with a handout. In TY1999, there were $8.5 - $9.9 billion in improper payments on claims totaling $31 billion, 27 -32% percent payment error rate.

Key EITC Program Influences
Commissioner’s Five Point Initiative supported by $50m in FY2004 and $25m FY2005

• Reduce the backlog of EITC examinations
• Improve the audit process
• Encourage eligible taxpayers to claim EITC
• Refocus compliance efforts on those whose income is too high to claim the credit
• Test approaches to certifying eligible children and other issues with a high risk of error

Improper Payments Improvement Act (IPIA)

• Requires measures of improper payments, reduction targets each year
• EITC is one of the “big” 7 programs covered – some of which have difficulty complying with IPIA
• OMB still considering how to establish a measurable program goal tied to specific program actions
  • Seeking erroneous payment measure that can be tied to program inputs / activities
  • Initial discussion focused on erroneous payment rate but this turns out to be expensive and difficult to tie directly to program activities
  • Considering focus on amount of revenue protected/recommended
  • Approximately $1.8 billion in revenue protected from examinations, math error, AUR, Automated Under Reporter Operation and document matching in TY2003

A key component of the EITC office mission is to work with IRS operations that do EITC work to improve performance.

Spanning four filing seasons, EITC-R delivered functionality to many processes that touch EITC taxpayers and their agents. EITC-R releases delivered +/-50% of the concept of operations (+/-50% of the concept of operations remains undelivered). With EITC-R, IRS expects to see improvements in performance.

EITC administration will benefit from projects planned for 2007-9.

FY 07 Outreach Campaign
Philcox presented the committee with a handout on EITC Marketing. The marketing campaign consists of focused initiatives to create national awareness of the EITC, educate the diverse EITC taxpayer population, and promote a call to action.

Marketing Goals Focus on Customer Segments:
1. EITC eligible taxpayers – Focus on Awareness

• Eligibility Requirements
• Limited English Proficient Taxpayers
• Tools to determine eligibility (EITC Assistant)

2. Tax Professionals – Focus on Education

• Avoiding Major Errors
• Due Diligence Requirements
• Tools to Help (Electronic Toolkits)

3. Media – Focus on Information

• Public Service Announcements
• Tools providing information

The 2006 Marketing Products for Taxpayer Awareness will include publications in English and Spanish and advertisements. For Limited English Proficient Taxpayers, there will be:

• EITC Grassroot Events
• Telemundo Infomercial
• Stakeholders (SPEC)

There will be tools for taxpayers, like EITC Assistant on www.irs.gov. Tax professionals will receive email blast and direct mail, and there will be Tax Forums for them to attend.

Three Toolkits target diverse audiences:

• Tax Preparation Volunteer Groups (VITA, AARP, LITC)
  www.irs-eitc.info/SPEC

• Tax Professionals
  www.eitcfortaxpreparers.com

• Media Press Kit
  www.ws-wr.com/epk/

Certification Test
Philcox and Knight presented the committee with a handout on EITC Qualifying Child Certification, A Case Study for Business Process Reengineering.

EITC has a 5-phase work plan

• Local focus project
• Form focus groups
• Immigration & Language Barriers
• Tax Preparers
• Demographics

Certification Concept
Treasury / IRS Task Force looked beyond traditional approach to tax administration work. Certification is a hybrid of tax administration and typical federal benefits administration.

Compared to tax administration of EITC, traditional benefits delivery mechanisms, such as food stamps and TANF (Temporary Assistance for Needy Families, have higher administrative costs, lower error rates, and lower participation rates. The key difference between EITC and the other programs is its approach to verifying eligibility. Other benefits programs have much more stringent “up –front” controls to verify eligibility. Many employ case workers (thus raising administrative costs).

Developing Project Plans & Research Techniques
Philcox and Knight distributed descriptions and templates with which to define, implement, and complete projects.

Sub-committee Report Out
Demographics – Davis visited several websites. Kevin Mullen was the IRS contact who provided efile demographic data. Preliminary exploration of rural vs. metropolitan counties.

Immigration – Richardson reported needing more subcommittee members.

Tax Preparers – Mitchell discussed how to get tax preparers to get the word out to have taxpayers file for EITC. They would like preparers to find ways to ask taxpayers more questions to see if they are eligible for the EITC.

Technology – Smith would like to find a way to use technology to market EITC to low income families.

1. IRS knows 25% of taxpayers don’t claim EITC credit.
2. IRS has information on dependents & income. Why can’t the IRS send letters to taxpayers to urge them to file?
3. Majority of low-income taxpayers don’t use technology.

Smith and subcommittee recommend the IRS focus on the tax preparer to get this info out to the taxpayer.

Saturday April 22, 2006
Day 2

Sub-Committee Breakouts

Sub-Committee Report-Out
Technology/Tax preparer
The sub-committee came up with two objectives: 1) increase awareness of the EITC among qualified taxpayers, and 2) reduce improper payments. The sub-committee will meet on 05/09/06 to discuss outreach through preparers (e.g.--reach out to places like H&R Block and other tax preparation locations to let everyone know that EITC exists) and raising awareness on the Whistle Blowers program. If people are aware of this program, it may deter them from filing fraudulent returns.

Immigration
Vivianne Johns asked what difference could be made in outreach and customer service if, instead of reacting to changes, the IRS could anticipate what lies ahead with respect to the population qualified to claim the EITC. The subcommittee agreed to do a scan of information on immigrants with an eye toward identifying the languages in which EITC outreach materials should be distributed and projecting EITC claims. Subcommittee members will investigate Citizenship and Immigration Services (formerly Immigration and Naturalization Services), Office of Refugee Resettlement, 1040NR, and Pub 519 (Tax Guide for Aliens). At the next meeting (5/09/06), they will make a proposal for their project.