SBSE Issue Committee Meeting Minutes

April 7, 2005

Opening of the Meeting
Nagel opened the meeting and welcomed all the members.

Roll Call

Panel Members Attending

• Margaret Balcom, Concord, CA
• Aaron Bell, Kenmore, NY
• Bill Bly, Wayne, PA
• Paul Brubaker, York, PA
• Charlotte Cassady, Talbotton, GA
• Paul Duquette, Amherst, WI
• Donna Hafer, Burlington, KY
• Paul Nagel, Glen Cove, NY, Chair
• Owen Oatley, Holly Hill, FL
• Mary Suther, Dallas, TX
• William White, St. Joseph, MO

Panel Members Absent

• Robert Forst, Encino, CA
• Steven Hoffman, Columbus, OH
• Stanley Miller, St. Louis, MO
• Bradley Moore, Decatur, GA
• Howard Perkins, Suisun City, CA
• Sallie Richardson, Taylorsville, UT
• Steve Rue, Mechanicsville, VA

Quorum was met.

TAP and IRS Attendees

• Helene Bayder, SB/SE Program Owner
• Michael Chessman, TAP SBSE Liaison
• Darren Guillot, SBSE Program Manager
• Patricia Hammond, SBSE Office of Burden Reduction
• Audrey Y. Jenkins, TAP Analyst
• Erik Miller, SBSE Operations Research Analyst
• Sandra Ramirez, Designated Federal Official (DFO)
• Kathy J. Welsh, SBSE Program Analyst

March Meeting Minutes
Approved, pending these changes: 1) page 3, date in second paragraph should be “October 15th” not “April 15th”, 2) page 4, under Joint Committee Report should read, “IRS Commissioner’s Advisory Council’s” report and 3) page 2; Oatley to provide an “outline” not “notes” to Meglan Knight (regarding subcommittee Form 7004).

Program Owner Presentation
Bayder announced that two new issues would be introduced at today’s meeting. One is a legislative proposal on the issue of rounding. She introduced Pat Hammond who is working on behalf of the Office of Taxpayer Burden Reduction (OTBR) and Operations Research analyst Erik Miller. They are looking for feedback from the Committee on the issue of making mandatory the rounding of dollar amounts on all tax forms.

Pat Hammond thanked the Committee for allowing her the time to talk about the issue of rounding. A pre-read handout that summarizes the OTBR proposal was distributed to all the members prior to the meeting. Hammond explained that currently taxpayers have the choice to use cents or whole dollars on their returns, forms or statements. However, the Office of Taxpayer Burden Reduction is studying the legislative proposal to make the use of whole dollars mandatory as a way to reduce the burden to taxpayers. The proposal would affect all tax forms: individual, trust fund (e.g., form 941), corporate and all information returns (e.g. W-2, 1099s, etc). International taxing agencies that require rounding and their system of taxation such as those of Canada, Great Britain and Australia were researched. U.S. state taxation agencies were also surveyed. The results of the survey showed that of the 71% of responders, 64% of these agencies require the majority of their dollar figures or all of their figures to be rounded. The survey also indicated that 62% of these agencies encountered no difficulty in making rounding to whole dollar mandatory. The majority of the surveyed agencies also reported a cost savings as a byproduct. Team members such as analyst Erik Miller are trying to present a persuasive proposal by showing burden reduction and cost savings to the IRS (e.g. savings in processing costs) if rounding is implemented.

Hammond asked the members for their help in addressing the five questions contained in the handout and in formulating a strategic approach for this proposal. Following Hammond’s presentation, some members asked questions on the proposal and made comments on the issue. A comment made was that the IRS should mandate all software providers to require rounding on their programs. Another comment was on the updating all the IRS forms and publications. Hammond indicated that the updates are periodic and therefore the cost to change these is not an issue. Chessman indicated that the OBR would be working with the Communications and Liaison department to disseminate the new requirements to taxpayers. Another issue, Bly suggested, is that of mandating rounding to the software prep folks. Hammond responded that she will be interviewing the National Accounts manager of the IRS who is the primary contact for the software prep folks. Hammond added that the number of taxpayers who do not round is falling – only 7% of filers report cents on their returns - yet trust fund returns have a high level of reporting to the cent. A member mentioned that may be because the states wants figures entered to the cent on those types of returns. White suggested that the only way for rounding to work is by requesting that all forms from financial institutions use rounding as well as payroll forms, social security forms, etc. so that the total equal the sum of its parts. Oatley commented that some taxpayers won’t round to avoid falling into a higher bracket although it would cost them something like an additional $5.00 or less. Hammond thanked the members and added that she would be available to discuss the issue with the subcommittee working it. Chessman explained that the IRS would present the proposal to the IRS’ Communications & Liaison function who would deliver it to Treasury with the hopes that Treasury would concur and then the proposal would have to get attached to a tax bill and when and if the bill passes – then the change could take effect. Thus in order to be successful, the IRS must present a strong and convincing business case for the proposal.

Brubaker volunteered to chair or take the lead on this new subcommittee. Hafer, Oatley, and Cassady also joined this subcommittee. Knispel will help arrange a subcommittee meeting.

The second presenter, Darren Guillot, a Collection Manager, introduced the issue of revising the Collection Information Statement (CIS). The purpose of revising both the individual (Form 433-A) and business (From 433-B) collection information statements is to reduce the burden for taxpayers who owe overdue taxes and must complete the CIS. The CIS allows the IRS to seek resolution and relief for the taxpayer whether it is by granting an installment agreement or an offer-in-compromise. Currently, the IRS is developing an Automated Collection Statement, but it may be a year before it is put in place. The immediate concern is the revision of the CIS and so, IRS formed a team in January to look at doing this. The team has a deadline - the end of May - which is when the Form 656 is scheduled for revision. The Form 656, Application for Offer-in-Compromise, makes reference to and relies on these CIS forms for processing of the form 656. Guillot asked that the committee submit their written recommendations by May 15. so that the Committee’s response could be incorporated in the draft of the revised Form. Guillot indicated that if the committee could meet that deadline – he would still accept the recommendations and consider them for the next revision period.

White volunteered to lead the form 433-A subcommittee and Balcom the 433-B subcommittee.

Report from Subcommittee #3
Duquette indicated that their meeting on March 28th was very productive. The group proposed five recommendations on Form 944. Duquette reviewed these recommendations briefly and Welsh explained the SBSE’s response and/or action to each of the recommendations. One of the recommendations was placing the Form 944 instructions on the front page of the form to fill out the empty space. Welsh thanked the subcommittee for their input.

Other Issues
Nagel requested more candidates for the Committee’s vice-chair position since only one person has expressed interest.

Closing/ Assessment
Nagel thanked the members and the IRS staff for their participation. Meeting closed at 4:10 PM ET.

Public Input
None.

Action Items
Knispel and Jenkins will set subcommittee teleconferences for the three new subcommittees during the month of April and inform all SB/SE members so that they may join the subcommittees.

Knispel and/or Jenkins will mail Forms 433-A and 433-B to all the members.

NEXT MEETING:
Next teleconference of the SBSE Committee will be on Thursday, May 5th at 3:00 PM ET.