Academic journal article Journal of Accountancy

IRS Commissioner's Agenda Outlined at Tax Division Meeting

Academic journal article Journal of Accountancy

IRS Commissioner's Agenda Outlined at Tax Division Meeting

Article excerpt

In her first official speech before a tax practitioners group, recently confirmed Internal Revenue Service Commissioner Margaret Richardson addressed the American Institute of CPAa spring tax division meeting. Among her main goals for the next four years: dramatically improving compliance with the tax code, pursuing legal and regulatory simplification and modernizing the IRS's antiquated technology.

Richardson, a partner in the Washington, D.C., law firm of Sutherland, Asbill & Brennan, is no stranger to the IRS. In 1974 she was the director of the Administrative Services Division in the IRS Office of Chief Counsel, and from 1988 to 1990 she served as a member and chairperson of the IRS Commissioner's Advisory Group.

Pursuing nonfilers. The current levels of compliance, Richardson said, are just over 80% - with even lower compliance levels found among certain taxpayer groups. "We estimate the approximately 10 million individuals and businesses that do not file tax returns cost us about $10 billion a year," she noted. Underreporting by individuals and businesses adds up to another $8 billion in lost revenues, and the problem is compounded by foreign-controlled corporations that don't report taxable income involving transfer pricing.

"Every taxpayer who complies with the law must be assured we will not tolerate having our tax system undermined by those who choose not to comply," she said.

Her plan of attack includes reallocating human and financial resources to track down compliance problems, improve collections and ensure full enforcement of the criminal law. She also stressed the need to combat the problem with comprehensive information and education efforts, which she termed "the widest approach with the broadest impact."

Easing taxpayer burdens. "One key to increasing compliance is having a tax system that is as simple and understandable as possible," said Richardson, who sported an AICPA "Simplify" button. "Complexity burdens every component of our system - taxpayers, practitioners and the IRS." Recognizing the IRS alone cannot simplify tax laws, she promised the service under her tenure will administer the law in a manner that's as simple as possible, drafting regulations and rulings "that don't attempt to address every conceivable issue."

A modern and efficient system. "Having to write repeatedly to the IRS to resolve a simple problem is not what service means to you," she said to AICPA tax division members, "and I can assure you it's not what service means to us. …

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