This month, IRS Commissioner Charles P. Rettig’s time period will come to a detailed, opening the door for a successor to guide an company that continues to work itself out of backlog introduced on by the Covid-19 pandemic.
First, hats off to Rettig for having a dynamic tenure as commissioner and main the company by some historic good storms—Covid-19, the longest authorities shutdown, and continuous underfunding. Douglas O’Donnell will be serving as appearing IRS commissioner as soon as Rettig’s time period expires on Nov. 12.
As Kelly Phillips Erb identified in a recent Taxgirl column, the commissioner’s successor has an immense problem forward. With almost 80,000 staff, whoever takes the reigns from Rettig could have a slew of duties and a barrage of goals that can must be tackled. As Erb astutely identified, the IRS has had hit a couple of hindrances, so the $80 billion allotted from Inflation Discount Act will probably be a welcome reprieve.
So what can the following company lead do to propel the IRS ahead in a significant approach?
Spine of the Economic system
The roadmap is specified by its Strategic Plan for Fiscal Years 2022 to 2026. It was launched earlier this yr and lists service, enforcement, folks, and transformation as its 4 strategic targets to place taxpayers’ pursuits first and improve the taxpayer expertise. Rising staffing with a well-equipped workforce will definitely assist. And whereas reworking IRS operations and growing enforcement are wanted for environment friendly and efficient tax administration, the one pillar that ought to seemingly be centered on mightily is the “service” goal.
Particularly, the brand new commissioner ought to have a watch towards how the company may serve American small-to-medium-sized companies (SMBs), the spine of the US financial system. I acknowledge my perspective on supporting and servicing SMBs could also be a little bit biased since I used to be the previous commissioner for the IRS’ Small Enterprise and Self-Employed Division.
In a recent speech delivered to IRS staff, Treasury Secretary Janet Yellen mentioned that “throughout the newest submitting season, the IRS averaged a 10-15% degree of service, that means that it answered lower than 2 of each 10 calls. On this coming submitting season, we’re committing the IRS to an 85% degree of service.” Though these statistics focus primarily on particular person ranges of service, SMBs even have struggled for entry to IRS officers when tax questions come up.
As a part of its laudable efforts to extend customer support, the IRS has an goal to supply “proactive outreach and training to enhance taxpayer understanding of their rights, duties and obligations.” US SMBs would profit tremendously from the company having a watch towards their wants on this space.
Particularly, the IRS ought to proceed directing consideration towards training, work to higher to tell SMBs of their rights as taxpayers, and improve steering to allow taxpayers to make use of tax advantages established by Congress whereas enhancing their capacity for voluntary compliance.
Educating Enterprise
An ideal instance of how the company could make progress with this aim could be to extra robustly spotlight the enterprise credit and incentives that the tax code affords SMBs.
Though a lot of our nation’s bigger companies take full benefit of those incentives, SMBs seemingly don’t have the sources to turn out to be adequately knowledgeable about the advantages of those credit and incentives, or even when their enterprise qualifies. As a result of advanced nature of those incentives, it’s useful when the company supplies instructional supplies to make sure the general congressional intent is met and SMBs will be absolutely knowledgeable of tax financial savings eligibility.
With this instructional premise in thoughts, one of many pillars of the IRS’ Taxpayer Bill of Rights is the “proper to be told.” Serving to SMBs know what they should do to adjust to tax legal guidelines and making certain company interactions are immediate, courteous, {and professional} falls proper consistent with the strategic targets. Additional, a continuing theme echoed by SMBs and their accountants is that the IRS ought to enhance the power for SMBs to entry their tax standing, ask related tax questions, and work by tax disputes in an environment friendly method.
Actually, a scarcity of sources, bandwidth, and funding have contributed to the company’s incapability to supply the environment friendly and supportive service that it seemingly needs to, however nonetheless the issue persists.
Right here once more, pillars of the Taxpayer Invoice of Rights additionally embody the rights to “problem the IRS’s place and be heard,” “high quality service,” and a “truthful and simply tax system.” An SMB’s capacity to entry IRS representatives in an affordable timeframe and have a transparent understanding of their rights to problem company positions is essential, and extra seemingly will proceed to spice up SMBs’ confidence on the planet’s greatest tax administration.
Conclusion
The following head of the IRS will, as their predecessors, face challenges with the right way to allocate funds and inner sources to make these goals a actuality. The additional funding being offered to the IRS generally is a launching pad for the brand new commissioner to push ahead with a lot of these targets.
The company has made clear that enforcement efforts will improve with the brand new funding; nonetheless, persevering with to place equal weight on taxpayer’s rights can present the general public that the IRS is there to help and serve them. The following commissioner ought to heighten the company’s deal with a selected sort of taxpayer within the subsequent a number of years: American SMBs.
This text doesn’t essentially mirror the opinion of Bloomberg Trade Group, Inc., the writer of Bloomberg Legislation and Bloomberg Tax, or its homeowners.
Writer Data
Eric Hylton is the director of compliance at alliantgroup and the rapid former commissioner for the Small Enterprise and Self-Employed Division of the IRS.
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