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MSP #4: GEOGRAPHIC FOCUS

The IRS Lacks an Adequate Local Presence in Communities, Thereby Limiting Its Ability to Meet the Needs of Specific Taxpayer Populations and Improve Voluntary Compliance

TAS Recommendations and IRS Responses

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1.

TAS RECOMMENDATION #4-1

Expand partnerships with private and non-profit organizations, similar to the Alaska Volunteer Tax and Loan Program, to visit most remote and underserved regions and provide tax education and preparation to taxpayers within their communities.

IRS RESPONSE TO RECOMMENDATION: The IRS already has actions in place that will implement this recommendation. As discussed in our response, our Rural Initiative is designed to enhance coverage to remote, hard-to-reach communities. This objective will be achieved by empowering local Territory offices to identify rural partners and locations that would benefit the most from increased resource allocation and by implementing a dedicated strategy for growth. Conversations with potential partners will continue during 2017 to determine the best course of action, including use of FSA and Virtual VITA/TCE, with targeted implementation during the 2018 Filing Season.

Update: Since 2011, the Stakeholder Partnerships, Education and Communication (SPEC) organization has included rural communities as a point of emphasis to increase access to taxpayers in harder-to-reach communities throughout the United States.  Spurred by the Rural Initiative is Virtual VITA/TCE, which allows partners to leverage technology to expand access to taxpayers in more remote locations. To identify potential partners and sites in rural communities, SPEC created a Rural Initiative Team and placed greater emphasis on rural growth.  The Area/Territory Offices held regular discussions with Territory Managers to incorporate and devise plans to grow the business in rural areas, created a Rural/Urban Action plan, and used a tracking sheet to track contacts with potential partners.

CORRECTIVE ACTION: We will provide a pre and post 2018 analysis on partner growth to help measure the success of the Rural Initiative no later than December 31, 2018.

TAS RESPONSE: The National Taxpayer Advocate is pleased that the IRS plans to partner with rural organizations to expand the reach of IRS services. The National Taxpayer Advocate has long recommended an approach where the IRS leverages partnerships with stakeholders and other government entities and looks forward to reviewing the results of this initiative.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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2.

TAS RECOMMENDATION #4-2

Use the Service Priorities Project (SPP) model to make decisions on taxpayer services, including the location of TACs.

IRS RESPONSE TO RECOMMENDATION: The SPP in its current state is not designed to assess geographic location. When the data gaps in the current SPP are filled, the IRS may consider including the SPP in its multifactor approach to address geographic coverage and TAC locations.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The National Taxpayer Advocate believes the SPP can be used, with additional data, to assess taxpayer needs in certain geographic locations. Surveys of taxpayer needs and preferences by location could inform the IRS of particular needs in various communities. The National Taxpayer Advocate encourages the IRS to fully populate the SPP and refine its use to best serve the needs of taxpayers and the government.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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3.

TAS RECOMMENDATION #4-3

Work with community partners to host virtual service delivery terminals for taxpayers located in remote and otherwise underserved communities.

IRS RESPONSE TO RECOMMENDATION: The IRS currently has 28 community partners hosting virtual service delivery for taxpayers. Based on budget availability, the IRS will continue to identify additional locations and work with our partners in remote and underserved communities to expand the use of this and potentially other cost-effective technologies to ensure that we are best serving taxpayers.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The National Taxpayer Advocate is pleased that the IRS is expanding its virtual service delivery program and will continue to implement new sites. The National Taxpayer Advocate has long urged the IRS to use this technology to expand its presence.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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4.

TAS RECOMMENDATION #4-4

Re-staff Appeals Officers and Settlement Officers locally so that one of each employee is located and regularly available in every state, the District of Columbia, and Puerto Rico.

IRS RESPONSE TO RECOMMENDATION: ​Appeals meets the legal requirement of having an Appeals Officer regularly available in each state through circuit riding to areas where there is no permanent Appeals presence, and working with taxpayers and representatives to schedule convenient meeting dates and locations when in-person conferences are necessary.  Appeals Officers are versed in the laws of multiple states when required to determine federal tax consequences (e.g. definition of alimony) and may seek legal advice from Chief Counsel attorneys as needed.  While regional economics are sometimes relevant to tax administration, a state-based geographic approach would fail to account for the multiple jurisdictions that may exist within a single, local economy (e.g. Kansas City or Texarkana) or the substantive expertise that may be needed on a particular case.  Matching the expertise of the Appeals employee to the issue(s) presented is more critical to settling a case properly than the physical presence of two employees in each state, who could possess insufficient expertise to cover all issues in the case.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The National Taxpayer Advocate is not proposing a solution whereby Appeals loses particular subject matter expertise at the expense of having employees in every state. The National Taxpayer Advocate believes that Appeals can and should do both — have employees physically present in every state and bring in subject matter experts when relevant. Additionally, the National Taxpayer Advocate is concerned that the IRS is not focusing on the broader picture of having employees geographically dispersed and in the community. The purpose of having local employees is not simply so that those employees are familiar on an intimate level with the needs of the community, which is also an important goal, but to also provide an IRS face in the community. Taxpayer morale is an important component of voluntary compliance, and a faceless and nameless IRS creates an atmosphere of anonymity which can serve to increase tax avoidance behaviors.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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5.

TAS RECOMMENDATION #4-5

Re-staff local outreach and education positions to bring an actual presence to every state.

IRS RESPONSE TO RECOMMENDATION: In order to ensure we are reaching the maximum amount of external stakeholders (including both taxpayers and practitioners) with our available outreach and education resources, the IRS has adopted a virtual outreach business model that has garnered positive support from our stakeholders.

To ensure geographical coverage, our Stakeholder Partnerships, Education and Communication (SPEC) organization currently has a presence in every state where national and local partners are leveraged to deliver VITA/TCE services to millions of taxpayers. To broaden partner outreach and sustainability, the IRS also provides support to partners through the use of virtual technology to conduct meetings and training sessions.

The Stakeholder Liaison Field (SLF) function utilizes a number of tools to maintain a face-to-face presence in all 50 states.  These tools include conducting face-to-face Practitioner Liaison Meetings (PLMs), Small Business Forums (SBFs) and other events with our practitioner and industry partners. Additional tools include leveraging other IRS personnel to attend events when SLF personnel are not available and maintaining an instructor cadre, normally comprised of external practitioners, to conduct Leveraged Small Business Tax Workshops (LSBTWs) targeting the small business community.  In order to ensure we are reaching the maximum number of external stakeholders which includes taxpayers, practitioners and various industry organizations representing small business, we are increasingly relying on virtual technology as a key component of our business model.  Utilizing both IRS and stakeholder technologies, webinars are conducted on a host of different topics targeting a wide variety of target audiences.  These have proven very popular as participants can attend from the comfort of their homes or offices, regardless of where they live or work.  These technologies often offer live interaction with participants including question and answer sessions.  At times, even face-to-face events will pull in both participants and presenters virtually to broaden the impact of the event.  Another primary component of the SLF business model is the leveraging of stakeholder communication channels (websites, social media, training sessions, e-mail blasts, etc.) to reach their membership with IRS key messages.

Staffing and budget limitations prevent IRS from staffing outreach and education positions in every state but by utilizing the tools mentioned above, we will continue to maintain an active presence in each state and serve the broadest range of taxpayer communities and populations possible.

CORRECTIVE ACTION: N/A

TAS RESPONSE: While the National Taxpayer Advocate appreciates the IRS efforts to use the latest technology to reach as many taxpayers as possible, a virtual presence is not an appropriate full substitute for an actual IRS employee. Further consolidating and removing an IRS presence from communities perpetuates the image of the IRS as a behemoth, faceless, and nameless organization to be feared by taxpayers. The National Taxpayer Advocate continues to stress the importance of a community presence by the IRS, which humanizes the agency and promotes taxpayer morale increasing voluntary compliance. Moreover, shifting the core responsibility for taxpayer outreach and education onto third parties, however well-positioned and well-intentioned, is not a model for sustaining voluntary compliance. The IRS has an important and personal role to play, directly interacting with taxpayers in a non-coercive and helpful manner, in the communities where taxpayers live. At the very least, it can ensure that there is one employee who lives in each state who is responsible for outreach and education to the Small Business and Self-Employed taxpayers of that state.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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6.

TAS RECOMMENDATION #4-6

Provide face-to face service through the use of mobile taxpayer assistance stations (vans) in each state.

IRS RESPONSE TO RECOMMENDATION: IRS has decided to invest its resources in more efficient web-based and live services that will allow it to serve a greater number of taxpayers. During 2008 through 2011 in North Dakota, IRS used Tax Tours, a “mobile” concept where temporary offices were set up at alternative locations, such as Community Colleges and Universities. The IRS used radio, newspaper, and flyers to advertise the dates and times we would be available at these alternative locations. The total number of taxpayers served during these tours was 114 (76 in 2008, 12 in 2009, 13 in 2010, and 13 in 2011). The IRS concluded taxpayers do not come to sites that are not established on a regular basis and determined that the use of mobile vans was not the best use of resources. Additionally, we believe the expansion of Virtual Service Delivery will help us provide more face-to-face opportunities for taxpayers.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The IRS has previously mentioned its test of Tax Tours in North Dakota in response to other National Taxpayer Advocate recommendations to implement a mobile van program. However, the IRS has yet to provide the National Taxpayer Advocate with details and results of the program in order to allow TAS to evaluate the program design. Successful pilots of van and co-location programs must contain several key elements. The programs must be consistent that is, taxpayers must be able to expect that certain services will be available on certain days in certain locations. Haphazardly advertising a mobile van program through print and radio advertising, holding the program for one day, and then declaring it unsuccessful because only a few taxpayers availed themselves of the service does not reflect a well-structured pilot program. It will take time for taxpayers to realize and trust that a mobile TAC will be in their area every other Thursday offering full-scale IRS services. A one-day trial, even with advertising, will not give the IRS useful information about the extent to which taxpayers use the program. The National Taxpayer Advocate also notes that the IRS is currently displaying posters in the National Headquarters Building which describe tax vans from 1977.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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