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IRS Needs a Major Tech Overhaul, Groups Say

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Tax groups are urging the Internal Revenue Service to integrate its “significant number” of outdated legacy technology systems as it prepares to report to Congress on how to redesign the agency as set out in the Taxpayer First Act.

The Act, signed into law on July 1, 2019, requires the IRS to submit to Congress by the end of fiscal 2020 a comprehensive proposal to reorganize to better support America’s taxpayers.

“The IRS has not had a major reorganization of its structure since implementation of the IRS Restructuring and Reform Act of 1998,” according to IRS Commissioner Charles Rettig.

The Act, as the IRS explains, “aims to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer-friendly agency by requiring it to develop a comprehensive customer service strategy, modernize its technology and enhance its cybersecurity.”

The American Institute of Certified Public Accountants, along with 10 stakeholder groups including the Latino Tax Professionals Association, the National Association of Enrolled Agents and the National Association of Tax Professionals, told the IRS in a Jan. 30 letter that the “significant number” of IRS legacy systems “prevents it from using current and evolving technology.”

The groups recommended the IRS instead “move to a platform company model in which the technological infrastructure allows for integration and coordination of information throughout the organization. An integrated infrastructure will ultimately allow the IRS to meet the needs of both the taxpayers and their representatives in an efficient and timely manner.”

Further, the groups said, the IRS “should explore the efficiencies of cost and timeline of implementation with in-house development as well as outsourcing.”

Barry Melancon, AICPA president and CEO, said in the Jan. 30 letter to the IRS that “stakeholders from across the profession are facing the same challenges and together, we agreed on solutions to address the top issues faced by practitioners everywhere. The recommendations outlined in this letter better empower practitioners to help their customers and, ultimately, help all taxpayers.”

The groups told the IRS that to enhance its relationship with the practitioner community, the IRS should commit to a Practitioner Services Division. “Without a dedicated ‘executive level’ Practitioner Services Division that can participate in the design of key practitioner-impacting policies and programs, the IRS will not achieve the success it desires with the tax-preparer community,” the groups wrote.

At a minimum, the groups said, the division should: “engage with the tax professional community; ensure practitioner feedback is acted upon through a liaison with all major operating divisions; maintain robust practitioner hotlines; and provide an online tax professional account.”

The IRS said Monday that it has launched Identity Theft Centralto improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses.

Identity Theft Central , available 24/7, offers help on how to report identity theft as well as how taxpayers can protect themselves against phishing and online scams.

— Check out Identity Theft Drops for Third Year in a Row: IRS on ThinkAdvisor.


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