Editor: Valrie Chambers, CPA, Ph.D.
More than 154 million tax returns were filed in the 2018 filing season, and over half of those returns, more than 80 million, were prepared by paid tax return preparers, according to the IRS (see www.irs.gov. As of Aug. 1, 768,255 individuals had current preparer tax identification numbers (PTINs) (see www.irs.gov. Basic math will tell you that providing those 768,255 preparers with easier access in working with the IRS will in turn reach more than half of all taxpayers in the United States.
Considering these statistics, it appears that every dollar invested in facilitating tax practitioner communication with the IRS is a sound investment that could benefit millions of taxpayers.
Currently, the IRS provides the following tools for practitioners:
Most tax practitioners will have their clients agree to complete the Third Party Designee section of their returns, which will allow the IRS to discuss the processing of that return with the tax return preparer/practitioner. The authorization is good for one year from the due date of the return, and the IRS is limited to discussing the processing of the return. Unfortunately, this authority has proved to be of little or no benefit to practitioners other than to possibly check on the status of a refund, which can be handled much more efficiently using the "Where's My Refund?" tool on the IRS website. If an IRS notice were to arrive within that one-year period, practitioners generally cannot use Checkbox Authority to resolve the issue.
It is a good idea to get a signed authorization form (Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization) and to have it available when calling the IRS, because the Centralized Authorization File (CAF) is not always up to date for authorizations that have been filed, and internal communication at the IRS is sometimes unreliable. To overcome these shortcomings in IRS practices, practitioners can fax these documents to other IRS personnel.
Practitioner Priority Service phone line
Currently, the first point of contact for practitioners looking to obtain help for their clients is the Practitioner Priority Service (PPS) phone line at 866-860-4259. The following topics can be addressed via the hotline:
- Option 1: For general tax law questions (including questions about tax reform laws).
- Option 2: For individual accounts not in collection or examination status.
- Option 3: For business accounts not in collection or examination status.
- Option 4: If a client's account is in Automated Collection System (ACS) status.
- Option 5: If the client has received an automated underreporter notice (e.g., a CP2000).
- Option 6: If a client's account is under correspondence examination.
Additional contacts are available for practitioners, and the AICPA has created a quick reference chart that can be found at www.aicpa.org (AICPA member login required).
In addition to providing phone services for practitioners, the IRS has developed e-Services that practitioners can use to obtain taxpayer information. According to the IRS website, e-Services is a suite of web-based tools that allows tax professionals to complete transactions online. To access these services, practitioners must register and create an account that uses multifactor authentication. Practitioners can register for e-Services by going to irs.gov or by using a shortcut link at irs.gov/e-services.
Once a practitioner is registered, the following information can be accessed:
- Transcript Delivery System (TDS): Use TDS to view a client's return and account information.
- Taxpayer Identification Number (TIN) matching: Use this tool to validate TIN and name combinations before submitting information returns. Bulk and interactive options are available.
- Other services: E-file provider services to apply and participate in e-filing of returns, Affordable Care Act (ACA) services to e-file ACA-related information returns, and state agency services.
The AICPA provides information regarding the use of this system on its website at www.aicpa.org.
While these tools can be of great help to practitioners, they are not without issues. Hold times on IRS phone lines can be long, individual IRS departments do not always effectively communicate internally, the registration process can be daunting, and setting up multifactor authentication requires practitioners to provide their own sensitive personal information that has no connection to the taxpayer they are trying to assist.
For many years, the AICPA Tax Division has worked diligently to improve the situation for members. Members of various committees within the AICPA Tax Division, along with many key AICPA staff members, have worked to bring the various issues to the attention of the IRS and Congress. In 2015, the AICPA's governing Council adopted a resolution regarding tax administration (see www.aicpa.org. In addition, the AICPA has provided written testimony to members of Congress, has communicated regularly with the IRS, and recently took the issue directly to members of Congress as part of the AICPA spring Council meeting.
On July 1, the Taxpayer First Act of 2019, P.L. 116-25, was signed into law. In Subtitle D, Section 1302, of Title I, the law calls for modernizing the IRS's organizational structure. This is consistent with the message of the AICPA's advocacy efforts that have called for the development of a framework to modernize the IRS. In particular, the AICPA has specifically asked that the IRS consolidate existing resources spent on represented taxpayers and organize a dedicated Practitioner Services Division. AICPA advocacy publications on this topic have pointed out that consolidating practitioner services would increase the effectiveness of practitioners as an IRS resource and ultimately lead to overall better taxpayer/customer service.
The Taxpayer First Act presents an opportunity for improved practitioner services, and the AICPA Tax Division and advocacy teams will continue to be involved to offer assistance in developing a structure that is centralized, staffed with higher-skilled IRS staff, and offering more opportunities for practitioners to access their clients' data. As this process unfolds, AICPA members should consider strongly supporting the advocacy efforts of the AICPA, beginning with a visit to the AICPA Advocacy webpage at aicpa.org/advocacy.
AICPA advocacy efforts are supported through membership dues, while the AICPA PAC Fund, which helps to open doors for legislative efforts, is supported solely through donations that are separate from member dues. These AICPA efforts focus in part on molding meaningful improvements to the practitioner services at the IRS. Small and medium-size accounting firms especially benefit from the AICPA efforts, as they often do not lobby or have another organized voice in the conversation. Consider this a call to action to support these AICPA advocacy efforts in whatever way possible to ensure a better future.
Contributors Valrie Chambers, CPA, Ph.D., is an associate professor of accounting at Stetson University in Celebration, Fla. Cheri H. Freeh, CPA, CGMA, is a partner with Hutchinson, Gillahan & Freeh PC in Quakertown, Pa. Ms. Freeh is a member of the AICPA Tax Practice and Procedures Committee. For more information on this article, contact email@example.com.
Valrie Chambers, CPA, Ph.D., is an associate professor of accounting at Stetson University in Celebration, Fla. Cheri H. Freeh, CPA, CGMA, is a partner with Hutchinson, Gillahan & Freeh PC in Quakertown, Pa. Ms. Freeh is a member of the AICPA Tax Practice and Procedures Committee. For more information on this article, contact firstname.lastname@example.org.