Joint Committee Minutes

February 17, 2004

Members Present

• Mario Burgos, Efiling
• Skip Eshelman, Notices
• James Grimaldi, Area 1
• Gwen Handelman, EITC
• Cheyanna Jaffke, Area 7
• Robert Meldman, Ad Hoc
• David Meyer, Area 2
• Paul Nagel, Schedule C Non-filers
• Tom Seuntjens, TAP Chair
• Teresa Smedley, Area 4
• Leonard Steinberg, Payroll Taxes
• George Sullivan, Area 3
• Bruce Twomley, Multilingual
• Sherry Whah, Area 6
• Lillian Woo, Area 5

Members Absent

• None

Staff Present

• Bernie Coston, DFO
• Sandy McQuin, TAP Manager
• Patti Robb, Note taker
• Barbara Toy, Program Analyst

Welcome / Announcements / Review Agenda
Tom Seuntjens reminded area chairs of his challenge to complete work on recommendations for the May face to face. Also, for that meeting chairs of both area and issue committees and staff should make notes on the Making TAP More Effective process as well as procedures not necessarily documented.

Roll Call
All members present; quorum met.

Seuntjens noted that Leonard Steinberg requested that the agenda item on the annual report be removed.

National Office Report
Bernie Coston announced that the renewed charter was signed by the commissioner and brought over to Treasury and looks good for being in place soon. Coston reported that Nina Olson, the National Taxpayer Advocate (NTA), is reviewing the TAP Annual report and Coston will check on status this week. Barbara Toy will ensure Coston has the most recent copy of the annual report for this purpose.

ACTION: Toy will send most recent copy of annual report to Coston and he will check on status of annual report review.

Olson decided that all members who want to extend their term an additional year will be accepted. Seuntjens mentioned that a follow-up from a last meeting is to get list out to Joint Committee; Toy will send out list of members out to Joint Committee members. Seuntjens mentioned that it has been five months since the members were asked and TAP should confirm that members are still interested in remaining. There was discussion of who best to contact members to gauge the interest and it was decided that staff will contact all members on list to determine if they are still interested and ask for response within two weeks from today.

ACTION: Staff will contact panel members to gauge interest in remaining for third year for final response by March 16, 2004.

Coston announced the good and bad news about the budget. TAP obtained additional funding for additional face to face meetings for either the area or the issue committees. Coston asked for a discussion among chairs on what is more valuable, an additional area or issue committee face-to-face meeting. Gwen Handelman wondered why it needed to be all areas or all issues, some may have greater need. Why not use basis of greater need. Coston recognized Handelman's concerns but wanted some consistency. Seuntjens polled chairs to determine where priority should be by using three categories:

1 being critical to have face to face; 2, neutral or could have; and 3 would not be productive. Coston was agreeable to suggestion.

The poll was taken results are:

• Mario Burgos, Efiling—3
• Skip Eshelman, Notices—3 changed to 1
• Jim Grimaldi, Area 1—1
• Gwen Handelman, EITC—1
• Cheyanna Jaffke, Area 7—3
• Robert Meldman, Ad Hoc—1
• David Meyer, Area 2—3
• Paul Nagel, Schedule C Non-filers—2 changed to 3
• Teresa Smedley, Area 4—1
• Leonard Steinberg, Payroll Taxes—3
• George Sullivan, Area 3—3 changed to 1
• Bruce Twomley, Multilingual—3
• Sherry Whah, Area 6—1 changed to 3
• Lillian Woo, Area 5—1.

Committees choosing 1, Critical to have face-to-face, will schedule a second face-to-face meeting.

Lillian Woo asked for an update on the recruitment of new members. Coston replied that the first step was to have the extended term questions answered. Then, Olson can approve the process. Olson feels strongly that even though we may have states that don't have vacancies, we need to recruit for alternates in those states. The contractor for TAP's website will have the on line application available for which states we are actively recruiting from and we are looking to start first part of March, Coston's goal is full approval by Olson in next couple of days. The recruitment process, marketing strategy, and the announcement in the federal register will be available first week of March. Coston mentioned that we do not need to recruit for active members in certain states; but will be recruiting for alternates in those states.

ACTION: Staff will send out the list of states including Puerto Rico where members are needed.

Handelman stated the announcement needs to be very clear in the states where recruitment is for alternates only and should encourage people to apply by stating the importance of alternates. Coston stated TAP would make a point to state that the application is for alternates only and indicate that the alternates could be called at any time to fill a vacancy. Woo said some of her area members have asked about nominating people to serve. Coston replied that they will need to complete an application and go through the interview process but should mention during the process how they found about TAP. Sandy McQuin added that as soon as the application site is ready and the announcement is made through the Federal Register, applicants should be referred to website or calls the toll free for a hard copy.

Review / Approve Minutes
After minor changes, minutes were approved without opposition.

Review of Assignments
Action items were closed or revised as reflected in the Assignment section of these minutes.

Agenda Items:

Responses to Elevated Issue

Social Security Worksheet
Teresa Smedley was surprised that the Internal Revenue Service (IRS) took the exact opposite direction recommended by the panel. But, the IRS went with the focus group's preference. Area 4 is closing this issue.

Electronic Deposit of Form 1040X Refund
George Sullivan stated that Area 3 has not discussed this issue but will at their next meeting and asked to carry the item over to next month's agenda.

Monthly Committee Reports Action Items

Post Call Feedback
David Meyer presented this issue. Area 2 recommends that all callers to the IRS toll free system be given the chance to provide feedback; currently, callers are randomly asked to respond to a brief survey. Joint Committee accepted issue for elevation by consensus.

ACTION: Toy will format Taxpayer Feedback Option on Toll free and forward to Wage and Investment (W&I). 

Form W-4 Recommendation
Area 2 is recommending that IRS change the W-4 Form, Employee's Withholding Allowance Certificate, so employees could provide a percentage rather than a flat dollar amount on line 6 for additional amount, if any, you want withheld from each paycheck. This would provide employees, whose wages aren't fixed, more flexibility and less chance of either a large refund or being underpaid. Seuntjens asked if this would be a one time occurrence or universal. Steinberg and Sherry Whah replied that it would be an additional amount each paycheck. Meyer stated this would not require any legislative change just an administrative change to the form. Handelman added that given the number of employees in alternative work arrangements, allowing a percentage becomes increasingly important. Toy asked if there was a potential barrier due to the information provided by a subject matter expert but could not recall exactly what it was that change might require a legislative fix and why wasn't that barrier addressed in the referral. Meyer replied that would require a change in regulation not legislation. Smedley said this is an excellent alternative but doesn't go far enough. Area 4 has looked at this issue. In her opinion, after 20 years of working with taxpayers, the form and instructions need to be completely reworked. Meyer agreed but stated this recommendation only asks for this change. Seuntjens suggested this be viewed as an interim step, and then Area 4 could take it to the next step. Seuntjens stated it is fine for more than one area to work an issue if they each focus on a different aspect as long as it is coordinated. Joint Committee agreed to elevate without objection. (See Form W-4 Recommendation (Continued) for more discussion on this topic.)

Electronic Funds Transfer Payment System (EFTPS)—Clarifying Tax Year

The EFTPS Telephone Prompts system does not differentiate between calendar year-end and fiscal year-end resulting in misapplied payments and/or inappropriate refunds. The recommendation is to add a prompt for fiscal Year-end filers to enter the two digit month to indicate their year end and add the information to the instructions. Joint Committee agreed to elevate by consensus.

ACTION: Toy will format EFTPS—Clarifying Tax Year and forward to Small Business/Self Employed. 

Form W-4 Recommendation (Continued)
Sandy McQuin located the response from Judy Wall, Counsel to the National Taxpayer Advocate, that the change to the W-4 would require change in regulations and that the change could cause a burden to employers. Meldman added the real burden would be the changes required in the payroll software. Seuntjens asked what needed to be done to change a regulation. Meyer responded that it does not require a change in code but a request is made through counsel to Treasury. Handelman wondered if TAP as advisors to IRS not Treasury should be involved in changing regulations. Other panel members believed it appropriate but the pitch needs to be more eloquent including some statistics, how it would benefit employees, and addressing burdens on employers and practitioners. There is an increasing number of people who don't know what they will make from pay period to pay period so this is an important issue but it needs stronger language. McQuin recognized the burden to practitioners but more importantly how does it help the taxpayer? How would they arrive at percentage? Meldman replied that if the taxpayer was in the 15% tax bracket, he would fill in 15% and agreed that the recommendation needed to include additional information. Meyer agreed to bring back to Area 2 for a redrafting taking the relevant regulations into account. Issue is on hold; Area 2 will expand recommendations and bring back to Joint Committee.

ACTION: Meyer will bring W-4 Percentage Recommendation back to Area 2 for expansion requested by Joint Committee.

Area 5 reply to Terry Lutes' response to individual Free file elevated issues
Area 5 discussed the response from Terry Lutes to their recommendations on Free file improvements. Woo stated that after the Area 5 subcommittee reviewed the response, they felt it did not address their recommendations adequately and misinterpreted their proposal. So, the subcommittee drafted this response. Seuntjens added that on two the IRS did accept their proposal and the status on 04-006 Free file Record Retention and 04-008 Filing State Returns should be closed, changes accepted.

ACTION: Toy will forward the FreeFile request for clarification and update the status categories on the Free File issues

Seuntjens then started a discussion on adding new statuses for recommendations after they have received a response. If the committee needs additional clarification from the IRS, the status will become, open, response sent to IRS. If the recommendation changes completely or substantially changed based on the response, the original recommendation should be closed and then a new referral submitted.

Looking for a response to TAP 03-012 Just in Time Policy
Smedley added this agenda item as a follow-up to recommendation sent to W&I regarding the IRS' Just in Time Policy. The status report indicates that a written response was sent to TAP on 12/16/2003 . Seuntjens has not received this response. Toy added that Sue Sottile is aware of this and is tracking down the response. Seuntjens added that the letter has TAP 03-013 instead of the 012 which may be causing the confusion.

ACTION: Toy will check will continue to work with Sottile to obtain a response on the Just in Time Policy recommendation and mention the error in numbering.

Closing
McQuin had very positive news to report. There are often stuffers included in the envelope with IRS employees pay stubs. The latest stuffer was a card listing IRS tax help telephone numbers, such as the fraud referral line, the Business and Specialty tax line. The number for the Taxpayer Advocacy Panel is listed on this card. But, the bad news part is the card doesn't say what TAP does. Meldman reported that the Ad Hoc committee had a telephone conference on the Regulation of Preparers issue and invited return preparers, enrolled agents, and representatives from tax practitioner association groups. The call was very interesting and drew 12 or 14 guests. Steinberg mentioned that www.accountantsworld.com posted a survey and published comments from preparers on this issue. Meldman added that Ad Hoc has asked the preparer's groups for their position papers on this issue. Leonard Steinberg mentioned that the New York State Ledger had a huge article on Nina Olson's proposal regarding backup withholding which is meeting resistance because it is an additional burden on small businesses. Handelman added that there is a link on AOL to an article in the New York Times on the Alternative Minimum Tax.

Seuntjens thanked everyone and closed meeting.

Assignments

Joint Committee Members:

1. Chairs and staff should send in their own comments in writing, by the April Joint Committee meeting, on how to be more effective as a committee. They will be consolidated to be discussed at the May face-to-face meeting (11/18/2003).
2. Area Chairs should submit two new recommendations for review by the Joint Committee at the May face-to-face meeting.

Coston:

1. Speak to Chesman and Sottile about a feedback mechanism or reporting mechanism to issue committees from the program owners. (01/20/2004)
2. According to charter and TAP Guidance Document, the TAP Chair and Vice Chair have designated role as liaisons with other IRS advisory groups: ETAAC, TE/GE, ACT, IRSAC, and IRPAC. In addition, the TAP Chair and Vice Chair are the points of contact with the TAP staff, TAS, SB/SE, W&I, and other IRS Operating Divisions and Functions and Treasury to provide briefings on TAP activities, next steps, and action items. Also consider ways for other TAP members to partner with IRSAC and IRPAC (05/20/2003)
3. TAP and IRSAC sometimes have similar committees working the same issue as the TAP issue committees, for example each have a subcommittee on EITC. Jim Grimes is the lead of the EITC task force (01/20/2004)

Grimaldi:

1. Discuss the Offer in Compromise Fee and Quality Control for IRS Correspondence response with Area 1 and report back to Barbara Toy on their status
2. Bring Adding TAP information to Publications and Forms back to Area 1 (01/20/2004)
3. Return the EFTPS Review Period recommendation to Area 1 for discussion (01/20/2004)

Kraushaar:

1. Work with McQuin to develop:
   • Pocket-sized Quick Media Tips
   • Clear fact sheet on who TAP is and what TAP does

Nagel:

1. Work with the authors of the Schedule K-1 proposal and George Sullivan to rewrite it, and present again to the Joint Committee  

Meldman:

1. Bring the Notice Gatekeeper Office's request to Ad Hoc for development, distribution, and compilation and report results back to Joint Committee

Meyer:

1. Bring W-4 Percentage Recommendation back to Area 2 for expansion requested by Joint Committee
2. Discuss the On Hold for Toll Free and report back to Sherry Whah who is coordinating the response back to Barbara Toy on its status

Staff:

1. Contact panel members to gauge interest in remaining for third year for final response by March 16, 2004
2. Send out the list of states including Puerto Rico where members are needed
3. Chairs and staff should send in their own comments in writing, by the April Joint Committee meeting, on how to be more effective as a committee. They will be consolidated to be discussed at the May face-to-face meeting (12/20/2004)

Sullivan:

1. Discuss the On Hold for Toll Free and report back to Sherry Whah who is coordinating the response back to Barbara Toy on its status
2. Discuss the Third Party Authorization issue with Area 1 and report back to Barbara Toy on its status (01/20/2004)
3. Work with the authors of the Schedule K-1 proposal and George Sullivan to rewrite it, and present again to the Joint Committee

Toy:

1. Send most recent copy of annual report to Coston and he will check on status of annual report review
2. Continue to work with Sottile to obtain a response on the Just in Time Policy recommendation and mention the error in numbering
3. Format Taxpayer Feedback Option on Toll free and forward to Wage and Investment (W&I)
4. Format EFTPS—Clarifying Tax Year and forward to Small Business/Self Employed
5. Forward the FreeFile request for clarification and update the status categories on the Free File issues
6. Prepare the Message on Refund Check Envelope for elevation (01/20/2004)
7. Develop a form for collecting the inventory of knowledge, skills, and abilities and find a way for the information to be easily accessed on TAPSpeak (09/05/2003)
8. Get breakdown of top 50 issues on SAMS that are not assigned as a project to TAS employees (05/02 -05/03, 2003)
9. Toy and Balmer will have draft of issue matrix subcommittee report and list of categories to all Joint Committee members by November meeting
10. Add recommendation 03-005 and a summary page to the recommendation summary report.

Whah:

1. Discuss the On Hold for Toll Free and the Provider Identification Number response and report back to Barbara Toy on its status. Consolidate the response from Meyer and Sullivan on the On Hold for Toll Free issue