04 / 24 / 12

Future Technology Systems of the IRS

Technology seems to be the "way of the future" even for the IRS!! This is reflected by two recent pronouncements within the Service.

On Dec. 8 2011, Internal Revenue Service Commissioner Douglas Shulman proposed a filing system that would enable the IRS to collect various documents such as 1099s and W-2s BEFORE taxpayers file their full returns. Currently, the IRS evaluates the correctness of a tax return and the supporting documents AFTER the return has been filed.

Douglas Shulman explained at a public meeting in Washington that by collecting documents earlier, the IRS would be allowed to reject returns that didn't match records before processing, which would reduce burdens on both the agency and the filers involved.

Shulman said that "a real-time system would significantly improve compliance." It would also allow the IRS to process the returns more quickly – hopefully within 24 hours. Additionally, the system could potentially save the IRS (and us as taxpayers) millions over the long haul.

The IRS is also conducting a pilot program in Florida for taxpayers to use face-to-face teleconferences with auditors to resolve their problems. This program would benefit taxpayers who are going through "paper audits" and who do not have a local IRS examiner assigned to their cases.

Under the pilot program the taxpayer visits the Tampa, Florida IRS office and requests assistance. He is directed to a computer room where he logs into the IRS system computer and is allowed to speak virtually face-to-face with a case advocate in Jacksonville, Florida.

There is a fax machine nearby that the taxpayer may use to send over documentation. This will allow the IRS advocate to review the documents immediately with the taxpayer.

Over time the IRS would likely implement a log-in system with assigned taxpayer log-in PIN access from a home or office computer, which would eliminate the need for the taxpayer to visit the local office. It would also allow the taxpayer to display relevant documents through the camera to the IRS examiner.

While this all sounds promising you should know that these systems will likely take years to implement. They are costly and let's be real – this is the IRS we are talking about.

Additionally, we wouldn't recommend appearing at the IRS for a face-to-face meeting unprepared and without representation. This could potentially do more harm than good.