The IRS Future State Plan features prominently in the first volume of yesterday’s Fiscal Year 2017 Objectives Report to Congress from National Taxpayer Advocate Nina Olson. Three subjects of the report were highlighted in the news release issued by the Taxpayer Advocate Service (TAS): the Taxpayer Needs and Preferences Forums, results of the 2016 tax season, and TAS priorities for FY 2017.

Last year, Olson’s annual report to Congress expressed her concern of the then-undefined Future State initiative. Service cutbacks attributed to reduction in funding – like telephone and face-to-face meetings – and an increased emphasis on online-based systems were troubling to TAS, leading the Taxpayer Advocate to hold public forums to determine the needs of taxpayers.

To date, eight TAS-hosted public forums featuring taxpayers, tax professionals, academics, and industry leaders have been held. Noting that only 30 percent of those attempting to register for the “Get Transcript” program were successful, Olson worries that a primarily online service model might disenfranchise a segment of taxpayers who do not have the appropriate skillset for navigating increasingly complex authentication measures and troubleshooting computer-based problems. Coupled with recent issues facing online security measures, she believes moving away from traditional services could be a problem for future tax seasons.

The TAS overview of the 2016 filing season found that, aside from an improvement in telephone service compared to 2015, there were several problem areas:

• The 375 currently active Taxpayer Assistance Centers (TACs) will no longer feature walk-in service by year’s end. This means all face-to-face service will require an appointment, which, according to a pilot program, means that 20% of those signing up will have a 13- to 41-day wait period.
• TACs are restricted to basic tax law advice during tax season and will not be answering any legal questions post season.
• Current Taxpayer Protection Program (TPP) identity theft filters result in a large number of false positive flags on returns; more than a third of the 2.1 million flagged returns in 2015 were submitted by legitimate taxpayers. Since the number of flagged returns reached 1.8 million by the end of May, an even larger number of honest taxpayers will have their refunds delayed this year.
• Taxpayers living abroad have limited access to IRS services, like toll-free IRS numbers and the Electronic Tax Law Assistance Program.

As the name of the report suggests, TAS also identified fourteen “priority issues” for next fiscal year, including the FATCA burden, private debt collection, IRS levies on retirement accounts, online taxpayer accounts, EITC compliance, and ID theft victim assistance. The second volume of this report will feature the IRS response to the Taxpayer Advocate’s 2015 recommendations.

Source: Internal Revenue Service