The
IRS recently released the GENERAL REPORT OF THE INTERNAL REVENUE SERVICEADVISORY COUNCIL.
“The purpose of the IRSAC is to provide an
organized forum for discussion of relevant tax administration issues between
Internal Revenue Service (IRS) officials and representatives of the
public. Advisory council members convey
the public’s perception of professional standards and best practices for tax
professionals and IRS activities, offer constructive observations regarding
current or proposed IRS policies, programs, and procedures, and suggest improvements
to IRS operations.”
IRSAC
draws its members from the tax professional community and members of academia.
Below
are some of the recommendations in the report.
Any highlights are mine.
According
to the report, the Council feels “The IRS
must receive adequate funding commensurate with its ever-increasing
responsibilities and workload to remain effective. The IRSAC is concerned that
both taxpayers and the tax system will suffer without consistent and adequate
levels of funding”, and recommends -
“Congress should appropriately fund the IRS
to assure continued success in service, compliance and enforcement. Without
adequate funding, both taxpayers and the tax system will continue to suffer.
IRS personnel must receive the appropriate tools and technology to perform
effectively. Advances in private sector technology are outpacing a resource
challenged IRS at a time when it is most important for the IRS to continue to
improve its technology (and increase its full-time staff) if it is to operate
effectively. The IRS will continue to face difficult decisions with respect to
allocating limited resources between the compliance, enforcement and service
functions. While IRSAC recognizes the extreme importance of service to
taxpayers, we also recognize that increased compliance and enforcement efforts
are critical to the proper functioning of our voluntary tax system and cannot
be ignored due to budgetary constraints.
The IRSAC recommends
that resource allocation decisions focus on ensuring that the service, compliance
and enforcement efforts of the IRS are properly balanced. Inappropriately
allocated limited service or enforcement resources may serve only to foster
future noncompliance. Encouraging future compliance is of parallel importance
to punishing prior non-compliance. Tax administration is a constantly evolving
process that must be able to react quickly, efficiently and effectively.”
Regarding
the new Schedule D procedures, with the new Form 8949, the Council recommends -
“Encourage the brokerage houses providing
substitute Forms 1099-B to be consistent
in reporting with the format of Form 8949. This will aid the taxpayer and
preparer in uploading multiple transactions in a standard spreadsheet or other
electronic format, thereby making reporting as error free as possible.”
I
am pleased that the Council made the following recommendation concerning the
Form 1098-T issued by educational institutions -
“Require
that Form 1098-T report payments received during the year. With the change to only payments received
being reported, the IRS will need transition rules so that amounts billed in
the prior year do not get counted twice as amounts billed would be payments
received in the subsequent year.”
As
I have said in the past - the Form 1098-T as currently issued by most colleges
is basically “tits on a bull”. For the
most part the Form 1098-Ts that I get from clients are totally useless. The form tells how much was billed – but not
how much was actually paid. Who cares
how much was “billed” - I need to know how much was paid!
The
report also made this suggestion -
“Require eligible educational institutions to
distribute two Forms 1098-T to any student that is both an undergraduate and
graduate student in the same calendar year. Alternatively, the 1098-T could be
redesigned to provide a box for undergraduate payments received and a box for
graduate payments received, along with applicable checkboxes.”
RDF
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