SB/SE Burden Reduction Issue Committee
April 3, 2007 12:30 P.M. ET Teleconference
Meeting Minutes

Program Owner

• Bayder, Helene, Senior Operations Advisor, Office of Taxpayer Burden Reduction

Designated Federal Official

• Ramirez, Sandra - Brooklyn, NY - Manager

Committee Members Present

• Barry, Shaun - Franklin Square, NY - Member
• Behnkendorf, Larry - Waterford, MI - Member
• Bensen, Milissa - Hermiston, OR - Member
• Bly, Bill - Wayne, PA - Chair
• Edwards, Byron - Roswell, GA - Member
• Gursey, Gregory - Anchorage, AK - Member
• Havey, Dorothy - Lincolnville, ME - Member
• Kasturi, Srinivasan - West Orange, NJ - Member
• Maisch, Steven - Arlington, WA - Member
• Margulies, Howard - North Easton, MA - Member
• Richardson, Lovella - Knoxville, TN - Member                    

Committee Members Absent

• Cordeiro, Daryll - Mobile, AL - Member
• Davidson, Charles - Redding, CA - Member
• Guthmann, Howard - St. Paul, MN - Vice Chair
• Jason, Julie - Greenwich, CT - Member
• O’Donnell, Marie - Wilmette, IL - Member
• Shah, Rajiv - Columbia, MO - Member

TAP Staff

• Coston, Bernard - Washington, DC - Director
• Knispel, Marisa - Brooklyn, NY - Analyst
• Odom, Meredith - Brooklyn, NY - Secretary

Other Attendees

• Davis, Judy              
• Cleveland, Tammy
• Nazarro, Ned

Welcome
Bly welcomed members and guest

Roll Call (quorum has been met)

Review Agenda
Agenda reviewed

Introducing New OTBR Director Cheryl Harskowitch
Bayder informed the committee that the new Acting Director of the Office of Taxpayer Burden Reduction is Cheryl Harskowitch. She has had several leadership roles within the Taxpayer Advocate Service since 1999, and has more then 34 years of service with the IRS and 23 of the years have been in management. Her background is examination international. She began her IRS career in the Pittsburgh district and has been a Regional Analyst, Branch Chief and a Chief of an overseas project where she helped guide developing countries and establishing tax administrative systems. As an Examination Division Chief in International, Cheryl oversaw a large case in all exam support functions. She completed an assignment with a team in capital office last year in establishing one stop service in customer relations. She also coordinated IRS initiatives for business units. In Taxpayer Advocate Service, Cheryl was responsible for function wide case advocacy policy and program evaluation. She helped resolve some of the most complex cases elevated to the National Taxpayer Advocate. She most recently completed a detail in TAS as the Executive Director of Case Advocacy supervising a staff of approximately 300 employees which assisted 225,000 taxpayers annually.

Program Owner Presentation(Gambling Issues)
Cleveland presented the committee with the background to the Gambling Losses issue. The Revenue Procedure is from 1977. The guidance needs to be updated. The Revenue Procedure and the Guidance that’s out there states that gamblers must log all gambling transactions. Cleveland asks the committee to provide her with other options on tracking gambling transactions. TBR received a suggestion from a tax professional asking for simplified recordkeeping for gambling losses. Although there are many types of wagering activities, this suggestion pertains to slot machines. Current guidance suggests that for a slot machine transactions that the taxpayer log each transaction (pull of the handle) in order to substantiate their gambling losses.  A W-2G is issued if slot winnings are $1200 or more. Unless the taxpayer is considered in the business of gambling (a professional gambler), taxpayers report their gambling winnings on Form 1040 line 21 as other income. Gambling losses, only to the extent of winnings, may be claimed on Schedule A as an Itemized Deduction. Some of the options that have been suggested are, Increase the W-2G threshold. This option contradicts current efforts to increase reporting a close the tax gap. Set up a procedure that allows taxpayers and casinos to use tracking methods to report annually the taxpayers gambling history. For example, at the end of the year the casino will generate a W-2G reporting the taxpayer’s gross winnings and also their bets. Allow netting. Taxpayers would only report what their net wins are on a per session basis. This may require legislation. Cleveland would like to have this paper done within the next few weeks.

Subcommittees’ Report-Out
Subcommittee on Opera Issues
Edwards briefed the committee. This committee was formed to further clarify and rationalize the issue areas that were originally presented on the taxpayer burden related issue questionnaire and feedback form that came out. There were areas that were not broken down to prioritize various sub issues that were in those areas so they could be ranked by the most important to the least important. Edwards requested that the subcommittee members was to take the feedback form and go into it and break down the general category into further sub issues so that there will be some issues that can be pursued further. Edwards received feedback from everyone and complied all of the issues. The top issue that was the most responded to was the issue affecting seniors. Edwards felt that the committee lost their way inside of OPERA because the committee didn’t provide much input. Bayder informed the committee that OPERA is still working on the environmental scan. Nazarro feels that the gambling issues tie into some of the senior issues. Nazzaro spoke with some seniors and they stated that gambling winnings increases their income. Nazarro suggests the committee clarify these issues and it would be helpful to OPERA. 

Subcommittee on Form 2678, Employer Appointment of Agent
Davis informed the committee that they did a great job, the changes were incorporated. The suggestion in reference changing the verbiage from their trade name is still being looked at. All of the other proposals have gone forward and are being circulated for internal comments. When the finalized version is complete, it will be distributed to the entire committee.

Face-to-Face Meeting
The Burden Reduction face to face meeting will be June 8 – 9, 2007 in San Diego. Bayder informed the committee a project has started to gather information on Schedule D. At the last Burden Reduction council meeting, the TBR received approval to further develop these issues. Committees will be formed to look at Schedule C, the aging population and some self employment tax issues. Some questions and issues will be developed to be worked on in reference to Schedule C and D. Allen Jones, who is Bayder’s colleague, will attend the meeting, and take a lead on these projects. Ramirez reminds the committee that subcommittee that worked on Form 2678 still has the task of working the Schedule R.

Coston informed the committee that he was in Phoenix for a face to face meeting as well as a town hall, which was very successful.  A real success story relates to a suggestion which became an immediate change as far as Schedule F is concerned, is there will be a line added to which will give farmers the ability to put in their expenses to business use of their home. Olson was able to do all of the Town Halls this year and was very pleased with the participation. At the Phoenix town hall had a lot of practitioners to attend. The TAP budget was fully approved. The Tax Forums will start later this year. Recruitment is going well. As of March 30th, the numbers were 152 final submissions 355 applications are still sitting in draft status. The issue of having more publicity is still an option and an article may go out in the Wall Street Journal. There are still 30 days to go in the application process.

Bayder thanked the committee for all of their hard work.

Ramirez informed the committee that they will receive an email from Meredith in response to travel to the face to face meeting. Ramirez thanked Havey and Kasturi for participating in the New York Town Hall Meeting.
  
Public Input – where this goes on your agenda and in your minutes depends on what the committee decides

• Meeting adjourned at 1:12 pm
• Date & time of next meeting

*These minutes were approved by the TAP Issue Committee on
Date 05/21/07