Area 4 Committee Teleconference
1:00 PM CST/2:00 PM EST
May 18, 2010

Designated Federal Official

• Block, Roy - Milwaukee, WI - Manager

Committee Members Present

• Adams-Dodds, Carolyn - Detroit, MI - Member
• Buschmann, Ray - Lake Forest, IL - Member
• Kosanovich, Matt - Columbus, OH - Member
• Martyniuk, Lev - Cincinnati, OH - Member
• Monnier, David - Indianapolis, IN - Member
• Mull, Bob - Ann Arbor, MI - Member
• Oetken, Todd - Louisville, KY - Vice Chair
• Rhyan, Joyce - Cleveland, OH - Member
• Spiotto, Ann - Lincolnwood, IL - Chair
• Taylor, Rita - Cincinnati, OH - Member
• Turner, Dianne - Knoxville, TN - Member
• Vanderver, Stephen - Evansville, IN - Member
• Werner, Mary Jo - La Crosse, WI - Member
• Wingard, Kelly - Decatur, IL - Member

Committee Members Absent

• Akbar, Sandra - Chicago, IL - Member
• Granger, Jackie - West Bend, WI - Member
• Mackie, Wayne - Frankenmuth, MI - Member
• Young, Marilyn - Nashville, TN - Member

TAP Staff

• Smiley, Ellen - Milwaukee, WI - Analyst
• Gabriel, Lisa - Milwaukee, WI - Analyst
• Haywood, Annie - Milwaukee, WI - Management Assistant
• Robb, Patti - Milwaukee, WI - Analyst

Welcome/Chair Report
Ann Spiotto provided an update that during the April Joint Committee call, five projects and twelve issues were approved. They can be found on TAPSpace in the minutes. Mary Ann Delzer is leaving Taxpayer Advocacy Panel (TAP) and going to Taxpayer Advocate Service (TAS) as a manager. We wish her well.

Panel members were asked to complete a Strength, Weakness, Opportunities, and Threats (SWOT) analysis. A few responses were received and forwarded to the person doing the strategic planning for TAP. Ellen has a copy and will forward to anyone who would like to review it.

Recruitment is now closed. About 500 applications are currently being ranked by the staff.

Public Input
None

New Issue Report
Mary Jo Werner led the new issue discussion.

Issue 17349 - Tax Instructions – Write at 5th Grade Level
IRS has worked hard at making the instructions understandable – it’s already written at about the 6th or 7th grade level.
DROP

Issue 17350—Include List of Definitions in the 1040 Instructions
The national definition of tax terms is listed in publications. Bob Mull and Steve Vanderver both agreed the publication(s) are clear.
DROP

Issue 17354—Include Offer-in-Compromise (OIC) Verbiage in Fourth Notice
It was noted a Revenue Officer (RO) will only review an OIC if the collection case has been assigned to them. A suggestion was made by Vanderver to add verbiage encouraging taxpayers to look on www.irs.gov for additional information. He requested to see a copy the fourth notice to see if it is feasible to add the language or not. Panel will discuss at next months call.
ACTION: Ellen will email a copy of the 1st, 2nd, 3rd and 4th notice to Vanderver.

Issue 17370—Reporting Other Income to Support EIC Entitlement
Household income based on tax return information determines the amount of EIC. The suggestion was made the IRS should ask for more information to better capture the total household income including food stamps, disability, SSI, and all other assistance. Vanderver suggested the IRS should balance EIC against all sources of income which is not captured on the tax return. This issue is legislative and therefore out of TAP’s scope, but appears to be a good issue and should not get lost. Kelly Wingard will draft a recommendation for referral to SAMS.
ACTIVE Subcommittee: Wingard, lead, Vanderver, Dave Monnier

Issue 17392—Need Statement on Levy to Let Employers Know When the Levy is Paid in Full
A levy release is not always sent to the employer; therefore the levy should state the pay off date and amount to be paid. The question was asked, “When can an employer stop paying?” Smiley advised the levy does state the total amount due and the date it is figured to and specifically states don’t send more than the total amount due. If there is more penalty and interest due, the IRS works with the taxpayer rather than the employer. If necessary the IRS can levy again.
ACTIVE Subcommittee: Mary Jo Werner, lead, Lev Martyniuk.

Issue 17424—No Interest to Date Provided on Notice of Levy
The date is listed.
DROP

Issue 17459 – Abandoned Property – Income Could be Taxable
Is IRS database cross checked with unclaimed property, both Federal and State? Issue is out of scope.
DROP

Issue 17491 - Pub 587 Not Clear How to Report Unreimbursed Partnership Expense (UPE)
Pubs have almost no instructions on how to report income from flipping homes. Clarification is needed in the instructions and the issue needs to be addressed. There is a question about reporting it on Schedule E or Schedule F. If you routinely flip homes, it is a business; if you do not it could be 4797 property (capital gains). Depending on the time involvement, would it be a hobby?
ACTIVE Subcommittee: Wingard, lead, Todd Oetken

Issue 17492 – Pub 463, Standard Meal Allowance
Taxpayer states the information is unclear on amount of meal allowance on the first and last day.
Taxpayer is misreading the instructions.
DROP

Issue Discussion – Active Issues
Issue 16703—Streamline Offer in Compromise (OIC)
The subcommittee has not yet met on this issue. Table for discussion next month. .

Issue 16734—IRS Focus on Tax Preparers who Prepare Returns Incorrectly
The subcommittee has not yet met on this issue. Table for discussion next month.

Issue 17625—Empowered Taxpayers: New Approach to VITA/TCE Tax Return Preparation Bob Mull obtained research information which was forwarded to the whole committee. As a result, the recommendation was rewritten by Mull, updating the issue and goal statements. The more taxpayers have an operational knowledge of completing a tax return, the more likely they will seek it out and do it correctly. This is a very good issue and the committee should keep working it. Vanderver is concerned about the means of implementing and the initial expenses. The resources from TCE and VITA are very limited. Mull thinks this will result in better productivity in the long run. Ray Buschmann agrees, but it should be included in the barrier section there is limited resources and training. Concerns will be forwarded to Mull. Discussion tabled for next month, either to move forward or drop.

Issue 16851 – Deductions Passed by Federal Government
Werner will have Martyniuk review language on the referral. Will discuss at the June meeting.

Issue 16870 - Allowance to be listed as POA on Form 2848 and to Use E-Services
The issue is about un-enrolled preparers who will be required to take a mandatory test should be able to gain access to e-services and be able to be POA. Smiley will change title of issue.

Issue 16885 – Mailing of Publication 15
Monnier obtained information from prior contact Patrick Morrissey. The new contact is Cheryl Moe at (202) 622-6607. Moe is new at the position and does not have a lot of knowledge at this point. Monnier is trying to combine Pub 15, Employer’s Tax Guide, and Pub 15A, Employer’s Supplemental Tax Guide. Roy Block stated there are a lot of withholding tables to consider, and that 98% of businesses outsource their payroll and therefore never look at the tables. The companies that do the payroll use computer programs. Monnier advised, the IRS has looked at this issue but have not been able to figure out what to do about it. They said that there are a lot of people who still want the tables. Monnier estimated that about 2% of taxpayers use these tables. Monnier will write up a draft referral to be reviewed next month.

Issue 17030 - Change Start Date for Filing
We will address this issue at next month’s meeting.

Status of Issue(s) Referred to Forms and Pubs
Issue 5562 – MFJ vs. MFS List of Items Affected.
Forms and Pubs accepted the referral and plans to add information to Pub 17, Your Federal Income Tax and Pub 501, Exemptions, Standard Deduction, and Filing Information on this topic.

Status of Elevated Issues
Issue 5471 – IRS Identity Theft Advice Clarification
Ray Buschmann advised he and Kelly Wingard had a conference call with the owner of this issue who originally missed our point. They spent an hour discussing the issue and were advised the issue would be taken back to management to see if our recommendation could be implemented. Buschmann stated to keep this in mind that sometimes discussing the issue with the IRS is invaluable and dialog can be helpful in clearing any misunderstandings of the actual recommendation. Wingard explained it is very important to state a clear goal in our issues.

Outreach
We need to take a look at possible outreach activities.

Office Updates
Roy Block advised all the new applicants have been ranked. We are currently looking in Michigan and Illinois for Area 4 alternates. If any panel members would like to assist in the interviewing process Please send a response to Block via email.

Meeting Adjourned

Next Meeting June 15, 2010 at 1:00 pm CT

ACTION ITEMS:
Ellen will email a copy of the 1st, 2nd, 3rd and 4th notice to Vanderver.