Taxpayer Advocacy Panel (TAP)
Joint Committee Teleconference Minutes
Wednesday, June 6, 2007 - 1 P.M. ET

Welcome/Announcements/Review Agenda
Bob Meyers will be chairing the Joint Committee meeting today for J.T. Wright. He welcomed everyone and reviewed the agenda.

Roll Call
Quorum met.

National Office Report
See Attachment 1 for report. There were no questions or discussion regarding the report.

Sch F/Business Use of a Home
This issue was raised at the Omaha Town Hall. A look was taken at the current form and a staff member of the National Taxpayer Advocate had a conversation with Bob Erickson, Senior Analyst for IRS’ Tax Forms and Publications. Erickson said the Form 8829, Expenses for Business Use of Your Home, was developed in 1991 for Form 1040 Schedule C, Profit or Loss from Business (Sole Proprietorship) filers. Others who might have potential to claim expenses for an office in the home are those filing the Form 1040 Schedule F, Profit or Loss From Farming and employees who might be claiming business expenses. The reasoning for developing the Form 8829 reasoning is to make it easier to calculate the business use of your home. Prior to developing the form, those claiming the expenses used a worksheet from Publication 587, Business Use of Your Home. To make it work, the filer first needs to calculate all other expenses because there is a limit as to the amount of expenses that can be claimed for business use of your home. A new line was added to the Schedule C to bring over the total expenses from the Form 8829 rather than using one of the “other” lines. IRS considered expanding the Form 8829 for Schedule F and employees but found that it is not common for those filers to qualify for the expenses deduction. Prior to 1999, expenses for business use of your home could be claimed only if your home was your principal place of business. Since farmers conduct their business outside of the home, farmers were not eligible and most employees were not eligible. With the change to “exclusive use for business” for proof of eligibility many more Schedule C, employees and some farmers became eligible to claim the expense deduction. It is still uncommon for most farmers to qualify since a large part of their business is conducted on other parts of the farm. Erickson contacted IRS’ partners, a national farm coalition, whose representatives were very opposed to adding a line to carry over expenses from the Form 8829 to the Schedule F. They felt it might benefit a few farmers who meet the exclusive use for claiming an office in the home, but would create more confusion for the majority of farmers who conduct the major part of their business in other buildings on the farm. IRS agreed and the line will not be added to the Schedule F. Erickson clarified that the exclusive use rule applied not only to farmers but to Schedule C filers but by the nature of the business farmers typically have the office on another part of the farm. Paul Duquette added that the Schedule F instructions direct farmer who qualify for exclusive use to complete the worksheet and then put the total deduction on the “other” line. Max Scott asked Duquette, if in his experience, many farmers qualify for the exclusive use of the home criteria. Duquette replied that some of the farmers he knows do have an office in their home but he doesn’t know of any who have an office set up in their home that would fit the exclusive use rule.

Chair Report
See Attachment 2. J.T. Wright asked if there were any questions or comments on the report. It was suggested the report be shared with the full panel.
ACTION: Barbara Foley will post the chair report on TAPSpace and send an email notification to all panel members.

Area Recommendations

Area 7 #4091 Information about IRS Forms and Publications
During an outreach, Wayne Whitehead met an elderly lady from Colorado who was spending time in California and went to the post office to pick up tax forms. She was told the post office no longer carried the forms and was given a piece of paper directing her to go to 1040.com for tax forms. This is a commercial website which does offer free downloadable tax forms but also sells other tax services. She next went to the library which also no longer carries the forms. The woman has always prepared her own tax return so did not want to go to a paid tax preparer and was not aware of Tax Aide or Volunteer Income Tax Assistance (VITA). Area 7 looked at the issue and decided to recommend the IRS develop a poster stating the two sources of obtaining forms that the libraries and post offices can post at their sites. Area 7 suggested giving the forms number because the assistor will also provide information on how to contact the states for forms. Ferd Schneider agrees with the recommendation but to him the recommendation is too long and has too much verbiage. Schneider went back to the TAP Member Handbook and looked at instructions. Short and concise is mentioned several times; his objection is to the length but supports the proposal. Bill Bly seconded. Whitehead suggested the quality committee reword the proposal. Harvey Epstein thought the suggestion made it seem it is okay for the IRS to not supply forms locally. Whitehead replied that is not the intent but the poster is offered as an alternative for agencies such as libraries and post offices who can not afford to stock forms for the IRS. Harvey Epstein said Area 1 has received similar grassroots issues. He feels the IRS has responsibility to make forms available. Erickson said if taxpayers file a paper return, they are mailed tax forms based the next year. Sottile said the (Taxpayer Assistance Centers (TACs) do stock the most frequently requested items. Whitehead added that he lives in a university town and students are very comfortable using the internet to obtain forms. But, seniors are more willing to call to obtain the forms and that’s why the Committee recommended having both sources on the poster. Duquette added that if the IRS develops this simple poster, it would strengthen the ability of taxpayers to know where to go to obtain forms at a reasonable price. Every area committee has heard this same complaint and there are some that come to the volunteer sites to obtain forms. Hank Mosler asked if the big spiral-bound notebook of forms is available to anyone who requests; it is. Erickson said IRS may already have a poster that would fit the need. Duquette noted that part of the recommendation is for IRS to distribute to all post offices and other outlets. Erickson was not pleased that a Post Office employee handed the taxpayer the paper with a commercial provider and said IRS does want taxpayers to know where to get tax forms and would prefer they obtain from IRS site as they have the most current version. The committee returned to the discussion on who should reword the recommendation. It was agreed that the originating area committee should do the first cut at rewording the proposal and then the quality review team add the finishing touch. ACTION: Area 7 will pare down the IRS Forms and Publications recommendation and resubmit for consideration at the Joint Committee face-to-face meeting.

Area 6 #3400 IRA Minimum Distribution at age 701/2
Information regarding Individual Retirement Arrangement (IRA) minimum required distributions at age 70 ½ found in Forms 1040, U.S. Individual Income Tax Return and 1040A, U.S. Individual Income Tax Return, Instructions is not located in sections consistent with the subject of minimum-required distributions. This can cause confusion as to where to find the information or having the information available as a reminder. The benefit of adopting the recommendation is that taxpayers would find it easier to locate the information when they are ready to take their minimum distribution. It becomes more important as many baby boomers are now approaching the magic age and more people are impacted. Stan Wernz had the joy of passing that magic age and can’t understand how one wouldn’t know this requirement: the information is there when you first sign up for the plan; it is repeated each year when you are making contributions; there is a notice in the annual statement the year before there is a requirement to make a withdrawal during the year; and he received three letters regarding the withdrawal during the year. In addition, he received a phone call because he delayed the withdrawal until December. He likes where the information is because one would find the information when they are preparing their tax return and suggested repeating the information. Maryann Motza replied that the recommendation is not geared to tax preparers but to most taxpayers and most people would not read the entire section but go only to the section that meets their immediate need. She added that Area 6 would have no objection to having the tips in two places. It would raise the cost of the publication only slightly. Wernz added that if the taxpayer is making an entry on a line on the tax form, it is too late to make the deduction. Motza said then it is best to have the information in both places. Another concern is that many people have multiple IRA providers and the taxpayer needs to be aware that they all need to be considered when calculating the minimum distribution. Meyers asked if there were any other comments; there were none.
DECISION: The Joint Committee reached consensus on elevating the Area 6 IRA Minimum Distribution after changing the recommendation to add the TIP to another section rather than moving the TIP to another section.

Face-to-Face meeting
Meyers said the meeting will begin Monday, June 25 at 8 a.m. and continue until 5 p.m. Sunday is a travel day. Panel discussions are scheduled Tuesday morning and the meeting Wednesday is scheduled from 8 a.m. to noon and travel home that afternoon. The goal is have draft agenda sent out and get back to chairs.
ACTION: Tom Karwin should be placed on the face-to-face meeting for the Area 7 #3959 Filing by IRS recommendation. Sottile said IRS is very interested in receiving any feedback on the 1040 EZ, Income Tax Return for Single Filers and Joint Filers with No Dependents, because there is a project on rewriting the instructions.

Success Stories
Bernie Coston thanked his staff for ranking the 381 applications and is now ready to start interviewing. Thanks to the panel members and staff who assisted in the redesign of the position description and the creation of the frequently asked questions which are ready to go out to new applicants. Larry Combs submitted a draft annual report and a Communication subcommittee worked to finalize it. Thanks for the efforts of Steve Berkey, Larry Combs, Gil Yanuck, Elizabeth Warnecki, and Maryann Motza. The Communication subcommittee also suggested the information from the chairs be submitted timely and in a similar format. The goal is to have the annual report available by early August for the meeting with the Commissioner. Coston is working on setting a meeting time with the Commissioner and would like a date set by the Joint Committee face-to-face meeting. Coston thanked Sottile and Erickson for taking a look at TAP’s issues and acting as liaisons for Wage and Investment (W&I) while trying to resolve some of the prior issues. He invited them to come back to provide input on issues on future TAP teleconferences. Sottile stated she definitely wants to engage the TAP and has some upcoming focus groups opportunities which involve TAP members. Sottile and Coston will meet once a month to discuss outstanding issues. Erickson added that as a result of input from TAP, the IRS has revised the Form W-4, Employee’s Withholding Allowance Certificate. The 2007 version has a statement that refers the reader to Form W-4 P, Withholding Certificate for Pension or Annuity Payments, when the taxpayer has both a pension and wage income. He thanked TAP for the input.

• The Joint Committee reached consensus on elevating the Area 6 IRA Minimum Distribution
  after changing the recommendation to add the TIP to another section rather than moving the
  TIP to another section.

• Barbara Foley will post the Chair Report on TAPSpace and send an email notification to all
  panel members
  
• Area 7 will pare down the IRS Forms and Publications recommendation and resubmit for
  consideration at the Joint Committee face-to-face meeting.
  
• Tom Karwin should be placed on the face-to-face meeting for the Area 7 #3959 Filing by IRS recommendation.
  

Decision/Action Items from Prior Meetings:

Decisions:

• The Joint Committee reached consensus to elevate Area 6 #3942 E-Services as written.
• The subcommittee lead will be Maryann Motza. She will recruit members for the team from TAP as a whole.
• TAP will not have a formal policy on setting the frequency of full committee and subcommittee meetings; however, committees need to be flexible and not meet if there are no decisions that need to be made or work to be done. (10/12-14/2006)
• When a committee receives information about a problem that IRS needs to be aware of quickly such as an incorrect link on its website, the committee should draft a letter following the format for referrals as closely as possible. The paragraph will be reviewed by the Joint Committee and submitted, if approved, to the IRS under the TAP Chair’s signature. (10/12- 14/2006)
• Consensus to elevate Area 1 #3934, Form 8453 Usage Reduction with minor grammatical changes. (02/07/2007)
• Consensus to elevate Area 1 #3927 Form 8300 e-filing Capability with minor grammatical changes. (02/07/2007)
• Consensus to elevate Area 1 #3926 Form 8300 Filing Instructions with minor grammatical changes. (02/07/2007)
• Consensus to elevate Area 1 #3334, Form 1127 Revision. (02/07/2007)
• Consensus to elevate Area 6 #3233, Estimated Tax Payments Rules for Self-employed Taxpayers. (02/07/2007)

• All Chairs should forward information on their success stories to their committee analyst who will forward them to the Communication Committee. (5/2/2007)
• All Program Analysts who receive information on TAP successes from their chairs should forward that information to the Communication Committee Analyst.
• Dorothy Havey asked that Joint Committee members with further questions or concerns regarding the gold star proposal email them (5/2/2007)
• All members should send ideas on low-cost ways to publicize the TAP vision to Gil Yanuck, a TAP member on the Communication Committee, or to Barbara Toy who will make sure it is forwarded. (4/4/2007)
• Bob Meyers and JT Wright will work on a time line for the Annual Report and will bring it to the full Joint Committee for approval. (4/4/2007)
• The area chairs need to review the Communication Strategy, set priorities and develop a work plan to accomplish the strategies during the year. (March 7, 2007)
• Toy will send out the Joint Committee meeting survey after each meeting. (March 7, 2007)
• Toy will include only the active issues in the List of TAP Issues report but also run a list of issues in the parking lot by date received.
• Sandra Ramirez will ask Area 1 to prepare a response to IRS regarding the Schedule D Line for Carryover and bring the response back to the Joint Committee for approval
• Any one who finds grammatical errors in the Joint Committee pre-read materials such as minutes and referrals should send the suggested corrections to Barbara Toy. (02/07/2007)