EITC Issue Committee Meeting Minutes
February 13, 2008 - 1:00pm - Teleconference

Welcome/Announcements/Review Agenda
Verwiel welcomed all members, staff and guest to the call.  Verwiel asked that Jenkins provide the members with the Self Assessment Form and the Annual Report that was prepared by Wernz.

Roll Call
Quorum met

Members Present
Adlhock, Terrance
Armstrong, Mary
Birge, Eileen
Cecchi, Emilo
Cooper, Reuben
Jonathan, Sabby
Verwiel, John
Wernz, Stanley
Widmer, Harris

Staff Present
Jenkins, Audrey – Analyst/DFO
Odom, Meredith – Management Assistant

Program Owners
Hill, Sandra, Acting Director systems Operations/Stakeholder Engagement
Morrison, Lynn, Senior Analyst – EITC Office

Public Participants
Walker, Chandra – CCH (Commercial Clearing House), Washington, DC
Weinberger, Robert – H&R Block, Washington, DC

2008 EITC CC Focus
Hill thanked the members for volunteering their time, talent and energy in participating in this years TAP.  The IRS interacts with a number of stakeholders and values your input as well as insight.  The Earned Income Tax Credit (EITC) is a refundable credit and is available to low or moderate income working individuals and families.  Congress approved this tax credit legislation in 1975 to offset the burden of the social security taxes and to provide and incentive to work.  EITC is dollar per dollar reduction of the taxpayers’ tax liability which could result in no taxes due for a refund.  Eligible taxpayers can receive a refund even if they owe no tax and have no income tax withheld. The amount of the credit is adjusted each year for inflation.  To qualify a certain requirement must be met and a tax return has to be filed. The EITC has no effect on certain welfare benefits and most cases the EITC payments will not be used to determine eligibility for Medicaid, supplemental security income or SSI, food stamps, low income housing and temporary assistance needed for families.  The maximum amount an individual can get for the credit this year is $4,716. The maximum amount of earned income and adjusted gross income that will qualify them is $37,783.  A person is eligible if they have a valid social security number, their filing status is anything but married filing separate, they have no formed earned income and they meet the investment income limitation which for this year is $2,900 or less they must have earned income and it can not be a qualifying child of another person and they must be a US citizen or a resident alien. The IRS has Publication 596(EITC) and Publication 3524.  Publication 17 is the income tax guide, Publication 3211 and a variety of toll-free numbers.  This year, the IRS came up with an outreach strategy which will point the audience to one stop information resources instead of having all the paper publications and posters and have everyone go to the IRS.gov website. 

The EITC Office uses a communication strategy by using other functions to help deliver the EITC message. The EITC Office would like to make the website more user friendly, such as improve the navigation, ensure easy access and redesign the webpage layout.  There is an EITC link on the main page of the website.  External stakeholders and TAP were contacted and focus groups were conducted.  The EITC Office would like to improve the communications they have with tax professionals by pushing a compliance method as well as pushing the availability of online tools.  This is one of the focuses for this year. The EITC office will do Theme Awareness Surveys which will determine what changes needed to be made or additional forms of communications that need to be put out there. 

Morrison reviewed the due diligence rule.  Every EITC preparer has four due diligence requirements they must make.

1. Completing a check list
2. Keeping a worksheet that shows computations
3. Record retention
4. Knowledge

EITC has examiners that go out every year and conducts due diligence visits.  There are preparers that are penalized for not doing the requirements.  IRS Chief Council was asked to beef up the regulations for due diligence requirements so both the preparers and IRS will have a better idea of what is intended as they administer the due diligence requirements.  Communication with preparers is very important because 70% of the EITC returns are prepared by paid preparers.  There is a 23 – 28% error rate which is about 10 – 12 Billion dollars every year.  Preparers and other third parties are being asked to come up with new ideas to decrease the error rate.  One effort was to reach out to the software developer communities to form a working group to come up with best practices and recommendations so this information can be distributed to software agencies so they may improve their software.  There was a nationwide phone forum where practitioners can call in and different subjects are covered.  On the EITC page, there is a tax professional page and a practitioner tool kit.  This will serve as a resource to tell preparers of current events.  The practitioner community is gone after via Tax Forums and news articles.  The EITC Committee is asked to provide assistance in helping to determine what the needs are out there in the tax practitioner community, what’s working and what’s not.  If there are any suggestions that can not be worked because it is outside of the framework of the EITC office and has to do with all IRS, this suggestion can not be tackled but will be forwarded up.  The EITC Office wants to improve communication and increase the outreach effort and the office is open for suggestions.

2007 Project Summary

Committee Next Steps
The future vision of the preparers in the EITC Office is to conduct research to segments of different types of preparers.  First time preparers will be targeted to educate them before they go down the road of poor habits and poor returns.  Sending out letters and information to preparers will take place.  The EITC Office wants to improve communication and increase the outreach effort and the office is open for suggestion.

Jonathan suggests making awareness to EITC Day, via new articles, television etc.

Cooper suggests the members send Jenkins their thoughts in reference to EITC awareness in email. This will then be discussed at the face to face meeting.

Office Report
Odom will send an email out to members requesting travel information for the April face to face meeting which will be held in Atlanta, GA, April 17 – 19, 2008.