Academic journal article Journal of Accountancy

Reinventing the IRS

Academic journal article Journal of Accountancy

Reinventing the IRS

Article excerpt

Patricia B. Bissell, CPA, sole practitioner, Potomac, Maryland.

One thing is definite: The Internal Revenue Service needs to upgrade its computer system, taking advantage of the technology that's now available. Such a move would streamline its operation immensely.

I must say, however, the service is much better now than it used to be. The people are much friendlier. Even their letters are not as threatening as they used to be. But the IRS still has a long way to go. I get very irritated when I must call a few times about the same tax problem and can't speak to the same person twice. As a result, I have to explain the whole problem from the beginning. It wastes my time and the IRS staffs time.

The problem, I believe, is poor training--especially in the case of the service center staff. Sometimes the staff people aren't even up on the new laws or regulations. Many of them don't sound very professional. From my observation, many are not accountants or even business majors, for that matter. That makes it very frustrating when you try to discuss technical subjects with them.

The IRS also needs to improve the way it responds to correspondence. Too often when I send a letter, I get a form letter that says the IRS will reply in 30 days. I recognize they have to deal with many letters, but they simply must find a way to be more responsive especially to practitioners.

The other area that needs improvement is the tax form. We hear a lot of talk about simplification, but I've yet to see it accomplished. The other day I took a class on preparing the new tax forms. We added up the time it takes to do a return based on the IRS's estimate. We all concluded that, because of the amount of time it takes to complete a complex return, it's going to be hard for tax practitioners to be competitive.

One schedule is going to be murder: 6251--the alternative minimum tax schedule. It's an absolute horror. It has one line that makes you recalculate every single thing on the return, and I don't know of any computer program that is going to do it. Form 2210, Payment of Estimated Tax, has six schedules. When you get the 1040 package, much of it contains worksheets. There are more worksheets than there are forms.

The IRS has its work cut out for it.

Isabelle V. Curtis, CPA, PFS, sole practitioner, Middlebury, Connecticut.

If there was one thing the IRS could do better, it would be to work with taxpayers' CPAs more closely. Much of what the IRS does today is highly technical. Contacting a client directly often only confuses the issue. Instead, the IRS should deal one-on-one with CPAs, who can communicate on their level.

In the pension area such communication is vital. I handle a great number of retirement plan audits and the local district office I deal with has gotten to know me and my expertise. I try to have all such audits transferred to that office. Many times I invite the IRS auditor to work in my office rather than the client's, asking him or her to give me a list of what's needed up front so I can provide it.

Improved communication also is vital in the case of criminal investigations. IRS correspondence notifying clients they are the subjects of such investigations can cause a great deal of stress and trigger costly professional fees, not to mention the possibility of additional taxes and even jail. I am particularly concerned when an innocent party is involved. Take a partnership, for example. …

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