Taxpayer Advocacy Panel
Area 7 Committee
Meeting Minutes
April 21, 2010

Designated Federal Official
Dorothea (Dorry) Curran

Attendance
Patricia (Patti) O’Neill, Vice Chair
Lee Battershell
Howard Levine
John Rodgers (JR)
Sandy Finestone
Gary Iskowitz
Richard Coonradt
Clifford (Cliff) Young
Sabby Jonathan
David Kahn
Richard (Rich) Waterman
Ming Ni (Minnie) Lau

Staff
Judi Nicholas, TAP Manager
Janice Spinks, TAP Analyst
Nina Pang, TAP Analyst
Kymberly (Kym) Axtell, TAP Secretary

Absent
John Kim

Opening/Welcome/Announcements
Dorry opened the meeting. Kym took roll and a quorum was met. In John’s absence, Patti served as chair and welcomed the members.

Judi informed the members that she will be conducting interviews during the last week of April to fill the vacant Analyst position.

Approval of March Meeting Minutes
Dorry noted an error in the spelling of her name.
DECISION: The meeting minutes were approved noting the aforementioned correction.

Joint Committee (JC) Report
TAP Chair, Sabby Jonathan provided the following information in relation to the JC;

• Sabby sent an email to all TAP members and staff summarizing the important elements from the JC
• The agenda for the next JC meeting is very full; there are a number of issues to be reviewed/considered for elevation. Area 7 has the most issues to be considered. Sabby encouraged the Leads and others to consider joining the meeting to provided insight on their respective issues
• Sabby stated he is grateful for the work the committees have been doing
• The Communication Committee is working diligently on the TAP Annual Report for 2009; they are using this as an opportunity to prepare for 2010

Taskforce Sub-committee Reports
Taskforce B – Lee Battershell, Lead – Lee stated they had a fantastic taskforce meeting in April. They had Subject Matter Experts (SME) for two separate issues participating in the call; one for the name matching issue and the other for the correspondence audits issues.

The SME for the name matching issue was very helpful in providing information on this issue. They informed the group that they are very much aware of this issue and their short term solution is to suspend the name matching control process for the balance of the calendar year. Additionally, they have a team working with the Internal Revenue Service Advisory Council (IRSAC) to look at the problem and their goal is to have a long term solution in place by January 2011. Judi asked if they wouldn’t mind if a panel member sat in on these meetings, to which they agreed. They will inquire as to whether or not this is agreeable with the team. Rich would be the representative and would meet with them on a weekly/bi-weekly basis to assist them in coming up with a solution.

IRS Response to Issue 5601- Social Security (SS) Benefits for Minors-Taxability - The Taskforce received a response to this elevated issue. The Program Owner agreed to the recommendation in principle and has proposed an alternative solution, which the taskforce members concurred with. The problem was that individuals did not know how to treat minors in terms of reporting SS. The information is in the publication but is buried. Their recommendation to the IRS was to highlight the information so people could find it. What the IRS agreed to was; instead of adding a special section that just restates the general rules, they think the issue can be better addressed by a shorter section at the beginning of the Are Any of Your Benefits Taxable? With language that is similar to, “Child benefits. The rules in this publication apply to benefits received by children. See Who is taxed, later.” They would also add an index entry for child benefits.
Recommendation – Based on the response from the IRS, the Taskforce recommended the issue be closed as “Proposal Accepted”
Decision – The committee agreed with the recommendation.

Correspondence Audit (CA) Issues – They were fortunate to have several SME’s join the call to address their concerns in relation to the various CA issues they are working. Joining the call were Paul Tribe, Mike Landsman, and Maureen Green. They recommended the group start building case studies and forward to them for further review/input from a systemic/procedural standpoint. The SME’s will be sending them additional information (various letters and IRM references) to review.

The Taskforce has about seven recommendations in relation to CA’s that they will be presenting and would like to alert the other Area Committees so they can send like issues to show trends. They would like specific examples (actual cases) to see if the issue is localized or statewide. The SME’s would like Taxpayer Identification Numbers (TIN’s) showing gaps, trends in procedures etc.; this way they can track what occurred and where there are the holes in the process. Some members of the group will be providing examples of letters received by clients for the SME’s to review.

Judi advised the group to look at the draft referrals during their next meeting and take into consideration the information from the SME in deciding how best to proceed.

Sabby indicated a meeting was scheduled with Nina Olson and the plan is to address this issue with her. It is agreed this is a policy issue; they will submit the individual issue but think there is value in addressing the issue from the top down.

Taskforce C – John Rodgers (JR), Lead – JR cancelled April 14th meeting. He provided an update on issue 17382 – Retired on Disability. The issue stemmed from the Economic Stimulus Payments where a gentleman attempted to e-file with zero taxability income. They have been reviewing this issue for a while; they are not sure if they want to pursue this as of yet. There are no concrete facts from the IRS except it is true that they will not accept a zero return. JR is waiting for research from a cohort that owns an e-file company and will have an answer soon.

Taskforce A – Howard Levine, Lead – Howard provided an update on issue 4680 1099-MISC. The issue was if you get a 1099-MISC what is done to correct it. They had a SME on their call and were able to share their concerns with the response received from the IRS. They were understanding of the issue and indicated they have changed the instructions to make it clear that you contact the individual that submitted the form. They also talked about some other alternatives and the taskforce will start a new issue where they correct the form that allows you to notice inconsistent treatment; they will add something on that form so that it is clear how to handle such matters. The SME’s agreed a new issue would allow them to move forward. They were amenable to their suggestions.

Recommendation – The recommendation was to close this as Partially Accepted
DECISION: Consensus was reached on the closing code

17381 E-File Income Requirements – They would like to recommend that the IRS allow taxpayers to e-file for free regardless of their income level. Richard has done a lot of work on this issue. They realize it is a controversial issue, however, they feel it is worth elevating. Richard noted that the issue had been elevated in 2006 but got bogged down in free tax preparation and was ultimately dropped. Richard stated the Commissioner asked TAP to query members for feedback and the feedback received was that basically taxpayers really object to paying a separate fee for transmitting returns when they can pay forty-two cents to transmit a paper return. They are resurrecting the issue because congress still has a goal of 80% e-file. They want to be on record that taxpayers object to paying these fees. Howard noted that Nina Olson testified in her 2005 Report to Congress that this was an issue.

Recommendation – The recommendation before the committee was to elevate the issue.
DECISION: The committee consented to the recommendation to forward the referral for QR.

Review of Outreach for March
Patti noted March looked bleak with only five members reporting outreach activities. Now that tax season is behind us she encouraged members to strive to do better for April. She also informed members to send Kym any backlog information.

Face to face (FTF) Meeting Preparations
Judi asked members to start the process of identifying issues to work at the FTF meeting during their May Taskforce meetings; this way staff can pull together any research needed.

Taskforce B has a lot to deal with in terms of CA issues and Judi left it to them to decide how they want to address the issues; either before or during the FTF meeting.

Hotel arrangements have been made and Kym has started airline reservations. She will be in contact with members mid May to finalize travel arrangements. The plan is to meet all day Monday/Tuesday; there will be ½ day where the entire committee will meet for an overview and then will have Monday and Tuesday to meet in taskforce groups. The taskforce leads will report back on Tuesday afternoon. Any referrals would be presented at that time.

Sabby volunteered to find a location for a committee dinner.

Success Stories
Sabby noted Gary’s travel to Washington DC to receive an honor of 40 years of VITA service from the IRS Commissioner.

Gary was on a local FOX morning show discussing taxes and had the opportunity to mentioned TAP in the process.

Member Comments/Other Business
Review of Area 7 Issue Tracking Documents – Janice shared the updates to the Area 7 Issue Matrix and informed everyone that this report will be posted on TAPSpace in the Reports folder and will be part of pre-read for the monthly Area meetings.

Sabby thanked Janice for providing this document and suggested that Judi may want to share this document with the other Areas as a way to track their respective issues in the elevation process.

Janice also informed members to be aware of the new format for research reports and the new issue number assignments based on the new issue database.

Area 7 Members attending JC meetings – Judi informed taskforce leads/members that have issues on the agenda that it would be to their benefit to attend the meeting to present the issue and to address any questions that may come up. Both Howard and Lee indicated they would be available to attend.

Closing – Dorry thanked everyone and closed the meeting.