This month, IRS Commissioner Charles P. Rettig’s time period will come to an in depth, opening the door for a successor to guide an company that continues to work itself out of backlog introduced on by the Covid-19 pandemic.
First, hats off to Rettig for having a dynamic tenure as commissioner and main the company via some historic good storms—Covid-19, the longest authorities shutdown, and continuous underfunding. Douglas O’Donnell will be serving as appearing IRS commissioner as soon as Rettig’s time period expires on Nov. 12.
As Kelly Phillips Erb identified in a recent Taxgirl column, the commissioner’s successor has an immense problem forward. With practically 80,000 workers, whoever takes the reigns from Rettig can have a slew of tasks and a barrage of aims that may have to be tackled. As Erb astutely identified, the IRS has had hit a couple of hindrances, so the $80 billion allotted from Inflation Discount Act will likely be a welcome reprieve.
So what can the subsequent company lead do to propel the IRS ahead in a significant approach?
Spine of the Economic system
The roadmap is specified by its Strategic Plan for Fiscal Years 2022 to 2026. It was launched earlier this 12 months and lists service, enforcement, individuals, and transformation as its 4 strategic objectives to place taxpayers’ pursuits first and improve the taxpayer expertise. Rising staffing with a well-equipped workforce will definitely assist. And whereas reworking IRS operations and growing enforcement are wanted for environment friendly and efficient tax administration, the one pillar that ought to possible be centered on mightily is the “service” goal.
Specifically, the brand new commissioner ought to have an eye fixed towards how the company may serve American small-to-medium-sized companies (SMBs), the spine of the US economic system. I acknowledge my perspective on supporting and servicing SMBs could also be a bit biased since I used to be the previous commissioner for the IRS’ Small Enterprise and Self-Employed Division.
In a recent speech delivered to IRS workers, Treasury Secretary Janet Yellen mentioned that “throughout the newest submitting season, the IRS averaged a 10-15% degree of service, which means that it answered lower than 2 of each 10 calls. On this coming submitting season, we’re committing the IRS to an 85% degree of service.” Though these statistics focus primarily on particular person ranges of service, SMBs even have struggled for entry to IRS officers when tax questions come up.
As a part of its laudable efforts to extend customer support, the IRS has an goal to offer “proactive outreach and schooling to enhance taxpayer understanding of their rights, tasks and obligations.” US SMBs would profit vastly from the company having an eye fixed towards their wants on this space.
Particularly, the IRS ought to proceed directing consideration towards schooling, work to raised to tell SMBs of their rights as taxpayers, and enhance steering to allow taxpayers to make use of tax advantages established by Congress whereas enhancing their means for voluntary compliance.
Educating Enterprise
An ideal instance of how the company could make progress with this aim can be to extra robustly spotlight the enterprise credit and incentives that the tax code provides SMBs.
Though a lot of our nation’s bigger companies take full benefit of those incentives, SMBs possible don’t have the assets to develop into adequately knowledgeable about the advantages of those credit and incentives, or even when their enterprise qualifies. As a result of advanced nature of those incentives, it’s useful when the company supplies academic supplies to make sure the general congressional intent is met and SMBs could be absolutely knowledgeable of tax financial savings eligibility.
With this academic premise in thoughts, one of many pillars of the IRS’ Taxpayer Bill of Rights is the “proper to be told.” Serving to SMBs know what they should do to adjust to tax legal guidelines and making certain company interactions are immediate, courteous, {and professional} falls proper in step with the strategic objectives. Additional, a continuous theme echoed by SMBs and their accountants is that the IRS ought to enhance the power for SMBs to entry their tax standing, ask related tax questions, and work via tax disputes in an environment friendly method.
Definitely, a scarcity of assets, bandwidth, and funding have contributed to the company’s lack of ability to offer the environment friendly and supportive service that it possible needs to, however however the issue persists.
Right here once more, pillars of the Taxpayer Invoice of Rights additionally embody the rights to “problem the IRS’s place and be heard,” “high quality service,” and a “honest and simply tax system.” An SMB’s means to entry IRS representatives in an inexpensive timeframe and have a transparent understanding of their rights to problem company positions is essential, and extra possible will proceed to spice up SMBs’ confidence on the earth’s finest tax administration.
Conclusion
The following head of the IRS will, as their predecessors, face challenges with tips on how to allocate funds and inside assets to make these aims a actuality. The additional funding being offered to the IRS generally is a launching pad for the brand new commissioner to push ahead with these kinds of objectives.
The company has made clear that enforcement efforts will enhance with the brand new funding; nevertheless, persevering with to place equal weight on taxpayer’s rights can present the general public that the IRS is there to help and serve them. The following commissioner ought to heighten the company’s deal with a selected kind of taxpayer within the subsequent a number of years: American SMBs.
This text doesn’t essentially mirror the opinion of Bloomberg Business Group, Inc., the writer of Bloomberg Regulation and Bloomberg Tax, or its homeowners.
Creator Data
Eric Hylton is the director of compliance at alliantgroup and the speedy former commissioner for the Small Enterprise and Self-Employed Division of the IRS.
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