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MSP #3: ONLINE ACCOUNTS

The IRS’s Focus on Online Service Delivery Does Not Adequately Take Into Account the Widely Divergent Needs and Preferences of the U.S. Taxpayer Population

TAS Recommendations and IRS Responses

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1.

TAS RECOMMENDATION #3-1

Maintain an omnichannel approach to taxpayer service delivery to meet the needs and preferences of taxpayers and representatives who either cannot or prefer not to use the online account application for their particular interaction with the agency.

IRS RESPONSE TO RECOMMENDATION: ​The IRS will continue to pursue an omnichannel approach to taxpayer service. We understand there are users who do not have internet access or who do not want to access their account online and we will continue to offer telephone, correspondence, and face-to-face services to assist taxpayers.

CORRECTIVE ACTION: N/A

TAS RESPONSE: While we are pleased that the IRS has committed to pursuing an omnichannel approach to taxpayer service, we do not agree that the IRS has implemented this recommendation. Until the IRS has developed a comprehensive strategy for omnichannel service, based on type of taxpayer and type of interaction, we do not believe it has implemented this recommendation. Merely making each type of service channel available, without a comprehensive research-based strategy, does not amount to a sufficient omnichannel approach.

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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2.

TAS RECOMMENDATION #3-2

The Commissioner of Wage & Investment, the Director of Online Services, and the National Taxpayer Advocate should jointly undertake a collaborative and comprehensive study of taxpayer needs and preferences by taxpayer segment, using surveys (telephone, online, and mail), focus groups, town halls, public forums, and research studies (including TAS research studies and literature reviews). These initiatives should be designed to determine taxpayer needs and preferences, and not be biased by the IRS’s own desired direction. This study should contain recommendations jointly agreed to by the principals for a comprehensive 21st century taxpayer service strategy.

IRS RESPONSE TO RECOMMENDATION: ​​​The IRS conducts research through the Taxpayer Experience Survey (TES) on the outreach and education needs of taxpayers. The information is broken down by various demographics including income, Limited English Proficient Spanish, rural location, and disability. This annual survey is conducted with taxpayers regardless of whether they have prior experience communicating with the IRS. The survey results provide information to assist with the outreach and education of taxpayers. The TES also measures unqualified preference for obtaining general tax information to help understand the channels taxpayers prefer for education and outreach.

In addition to the previous information that IRS provided to TAS about factors and studies that have been considered in developing the strategy for providing account based online services, the IRS has engaged with TAS to help gather insights to product design and future product development. The IRS welcomes the opportunity to review the results of research studies that TAS conducts on this issue and will consider this information as the strategy for providing account-based online services is refined.

CORRECTIVE ACTION: N/A

TAS RESPONSE: We commend the IRS for collaborating with TAS regarding online account design and future online product development. However, the IRS continues to disregard the findings of TAS research studies, focus group reports, town halls, and public forums in decisions regarding prioritization and resource allocation between the various service channels.

The IRS cites to its annual Taxpayer Experience Survey. The 2016 TES was mainly conducted online with less than ten percent of the respondents contacted by phone. The IRS conducted the phone survey with a goal of capturing the responses of taxpayers with no internet access. However, it is not clear that the phone survey actually reached a significant number of taxpayers without internet access. In fact, the 2016 TES reported that 98 percent of respondents had internet access at home. In contrast, TAS’s 2016 and 2017 survey on Taxpayers’ Varying Abilities and Attitudes was entirely conducted by phone (both cell phone and landline) and found that about 41 million U.S. adult taxpayers do not have broadband access at home and about 14 million have no internet access at all at home.

In addition, the 2016 TES found a high rate of satisfaction among those respondents who used the phones and TACs to contact the IRS. For example, the 2016 TES found that more than half of individuals (57 percent) who used TACs instead of IRS.gov felt that going to a local IRS office was easier than getting the information online. In addition, 91 percent of taxpayers who called an IRS phone representative understood the information provided to them and 84 percent of taxpayers had all their questions answered by the IRS phone representative. While the online services channel also scored high in satisfaction levels, this is not a reason to prioritize one service channel over another. It only fortifies the need to maintain high levels of quality service across all channels.

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 #3-3

Explore establishing a method for taxpayers to electronically submit documents or payments to the IRS which involves a less rigorous level of e-authentication.

IRS RESPONSE TO RECOMMENDATION: ​​The IRS agrees that transactions should be as easy and simple as policy, process, and technology will allow, especially for inbound payment and document submission processes where taxpayers are attempting to voluntarily comply with tax obligations. The IRS’ risk assessment process considers each program and process independently due to online risks. The IRS, along with all federal agencies, must follow National Institute of Standards and Technology (NIST) Special Publication 800-63-2, e-Authentication Guidelines, when interacting with taxpayers through web-based, online applications. The NIST guidance ensures that taxpayer data is protected according to Office of Management and Budget guidelines, which provides the method for assessing risk related to online transactions. NIST Special Publication 800-63-3, Digital Identity Guidelines, may provide some flexibility with respect to online authentication for the purposes of submitting documents or payments to the IRS, once those new procedures are implemented. The IRS is in the process of assessing the new guidance and conducting a methodical evaluation which will result in an implementation plan.

CORRECTIVE ACTION: N/A

TAS RESPONSE: We understand that the IRS is bound by the NIST guidelines and we are not suggesting that the IRS reduce authentication standards when the information is flowing in both directions between the taxpayer or representative and the IRS. However, the overall risk of inappropriate disclosure by the IRS would logically be lower when information is only flowing inbound. Therefore, we encourage the IRS to explore the new NIST guidelines to determine whether they provide more flexibility for purposes of payment and document submission. Moreover, we believe the IRS should set a date certain by which it will complete the assessment of NIST guidelines and develop an implementation plan.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

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

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4.

TAS RECOMMENDATION #3-4

Restrict third party access to those practitioners subject to Circular 230 oversight. Once the IRS strengthens the AFSP examination requirements, the IRS should permit ASFP Record of Completion holders to gain access to the application.

IRS RESPONSE TO RECOMMENDATION: ​The IRS has identified practitioner access as a future capability for development. The development of this capability is being prioritized, along with other online capabilities. Once developed, this should enable authenticated representatives to jointly establish authorization to access and/or represent their clients and enable practitioners to perform account actions on behalf of their clients. A cross-functional IRS team, including members from TAS, is in the early stages of analysis and policy planning for tax professional account features. Based on the team’s findings, the IRS will make determinations using legal requirements, procedural guidelines, and business needs to improve taxpayer services. At this time, the IRS has not made determinations about third-party access levels or groups. The IRS will continue to work with the National Taxpayer Advocate, industry stakeholders, and IRS subject matter experts to evaluate this and many other considerations related to online access for tax practitioners.

Update: The IRS has identified practitioner access as a future capability for development. The development of this capability is being prioritized, along with other online capabilities. Once developed, this should enable authenticated representatives to jointly establish authorization to access information and represent their clients and enable practitioners to perform account actions on behalf of their clients.

A cross-functional IRS team, including members from the TAS, is currently working on analysis and policy planning for tax professional account features. As a result of the team’s findings, we will make determinations based on legal requirements, procedural guidelines, and business needs, to improve taxpayer services. Upon completion of the study and analysis of findings, the IRS will take this recommendation under consideration.

CORRECTIVE ACTION: A cross-functional IRS team, including members from the TAS, is currently working on analysis and policy planning for tax professional account features. As a result of the team’s findings, we will make determinations based on legal requirements, procedural guidelines, and business needs, to improve taxpayer services. Upon completion of the study and analysis of findings, the IRS will take this recommendation under consideration.

IRS is continuing to work on functionality for a tax pro account, but has not made any policy decisions about which features will be available or what requirements users will have to comply with.

Update: We implemented the NTA’s recommendation to restrict Tax Pro Account access to those practitioners subject to Circular 230 oversight – but we went about this in a different way than stated in the Corrective Action plan due to Taxpayer First Act mandates. To summarize:

Tax Pro Account was subject to an accelerated release schedule to meet the Taxpayer First Act (TFA) 2302 deadline of July 2021. As currently designed, only certain practitioners subject to Circular 230 oversight (attorneys, certified public accountants, enrolled agents, enrolled actuaries or enrolled retirement plan agents) with a Centralized Authorization File (CAF) number assigned to them and who are in good standing can initiate a Form 2848, Power of Attorney, or Form 8821, Tax Information Authorization, on line.

TAS RESPONSE: We understand that the IRS has not yet made a policy decision regarding the restriction of third party access to the online account. However, it is crucial that the IRS prioritize this policy decision before the product design and development has advanced too much further. As detailed in the Most Serious Problem, we have serious concerns about granting broad online account access to third parties. Without instituting safeguards on third party access to the system, the IRS could inadvertently perpetuate preparer misconduct.  Therefore, we believe that the IRS would protect taxpayers by restricting third party access to only those practitioners who are subject to Circular 230 oversight. Moreover, we believe the IRS should set a date certain by which it will make that policy decision, since planning is under way for third party account access.

Update: This is a little different than what we recommended (a policy change), but they managed to do what we asked in a roundabout way. We agree to close this recommendation as adopted.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): 

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5.

TAS RECOMMENDATION #3-5

Upgrade phone technology to the 21st century, including call-backs.

IRS RESPONSE TO RECOMMENDATION: ​​​Upgrading technology is driven by product lifecycles and available resources. Innovating and improving technology is a continual process. The Infrastructure Upgrade Program-Endpoint Replacement (IUP-ER) currently in process will replace all legacy Aspect Automatic Call Distributer (ACD) platforms with Internet Protocol (IP) based technology. This will enable additional telephony features, provide robust reporting, and reduce licensing costs. A new version of contact recording will interface with new IP voice acquisition modules. The estimated completion date is August 2018. When complete, IRS customer service representatives will be using new equipment, new handsets, and a new computer telephony input/output systems interface. The IRS agrees that providing telephone callbacks could improve the taxpayer experience and reduce taxpayer burden. Customer callback technology would offer customers the option to leave a message that would act as the taxpayer’s place in a virtual queue awaiting the next available customer service representative. We have pursued funding for customer callback technology since 2012, and the initiative is among our FY 2019 funding requests.

CORRECTIVE ACTION: N/A

TAS RESPONSE: We are pleased that the latest planned telephone system upgrade is near completion and look forward to its launch. In addition, we will continue to support the IRS’s efforts to obtain funding to integrate customer callback technology. We believe this new technology will significantly reduce taxpayer burden.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

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

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