Direct Marketing Association, The v. Huber
Filing
99
MOTION for Partial Summary Judgment Counts I and II (Commerce Clause) by Defendant Roxy Huber. (Attachments: # 1 Exhibit 1- Fox Decl. & Rep., # 2 Exhibit 2-1 IRS Tax Gap, # 3 Exhibit 2-2 IRS Tax Gap, # 4 Exhibit 2-3 IRS Tax Gap, # 5 Exhibit 2-4 IRS Tax Gap, # 6 Exhibit 2-5 IRS Tax Gap, # 7 Exhibit 2-6 IRS Tax Gap, # 8 Exhibit 2-7 IRS Tax Gap, # 9 Exhibit 2-8 IRS Tax Gap, # 10 Exhibit 3- Saliman Decl., # 11 Exhibit 4- Corjuo Decl., # 12 Exhibit 5- Gable Decl. & Rep., # 13 Exhibit 6- Barry Dep., # 14 Exhibit 7- Stevens Decl., # 15 Exhibit 8- Thompson Decl., # 16 Exhibit 9- Lichtenstein Decl. & Rep., # 17 Exhibit 10- Adler Dep.)(Snyder, Melanie)
Based
the TAB Strategic Plan was
principles and extensive
B~ on these prjnciples and,eXfen$lv~ research analysis, tfi'e TAS Strategic-Plan was;
for taxpayer
the
designed outline
d~slgned to outll.ne,the vision fer: taXpayer service delivery over tI'fe next five years. Key
Performance Measures
the Service
TAB Strategic
include
components
comwnents,of the TABStlateglc Plan Incll!de the Perform~nce Measures Portfolio, tfle ServiCe
Improvement Portfolio,
to
Implementation
The IRS’ ability te
l"1Prov~ment PortfoJlo. and the Im~lementation Strategy. The~ IRS' abilitY _ conduct research
on
compliance, is
and improve
services,
consequently
aM to imprQve the delivery of servl~" and GOosequently improve compllanC$ Is dependent 9n
number of variables
Strategic
contribute the constant evolution
a nQmbe.r 'of ~trat)f9;S that 'COntrib~ to tI:1e censtaltt e,voluti,o of the TAB Strategic,Plan,
including tax legislation,
and
public marketplace. Th,erefare,
inOlu(slng-uax legisJatlon" the IRS budget, technology, and the P4biic marketplace, Therefore, the
implementation strategy
can be
institutionalized before specific elements of
implem~ntation strategy. must be im!t,itutieJlalized beforespecifil>elements f)f the plan can ~
realized.
'"
is
Based on recommendations ~e TAB
Plan, consideration being given to the
, Ba~ 9r:1 recpmmendations in the TAB, Strategic PI~lJt oonsid~ratiQn is bei1'}g givenct, tb$
o
funding necessary enhance IRS.gov so that becomes
choice individual taxpayers
fungjng neceSsary to enhiilo~IRS.gov sp-that becofYles the first chQlce of individual ta~ayers
preparers when
and their pnn')ar:ers wilen they need tp sontact the IRS fur help! Consideration is also,~fng
for help.
also being
to contact
given to other program initiatives ~hat will address Inadvertent, unlntentlonal errors G uS8Q' by:
program
that
inadvertent, unintentional
caused by:
_
a
•
Language barriers.
strategies
focus on providing tax information in languages
LanguljJgebamers. Pursuing s~ies that fOcu$ an provldlng tax Information in;angu~es
other
English.
.o#1er than English.
, _
•
barriers. Pursuing
improving the
Educational barriefS. Pursuih'g strategies that focus on expanding and Improving the quality
e.x~nding
of
VITA/TCE
similar partnership efforts.
~f voluntary assistance though VITA/tCE and srmJfar partn~rstftp e,ffo~.
•
Misunderstanding tax law. Pursuing strategies
on clarifying
Misunderst8ndlng of 1ax law.- P,!rsuing :stra~ies that focus ~n Clarifying and improving
reduce
burden that taxpayers experience in
forms. instructions and publications to reduGe the burEten th'at taXpayers'experience fn
attempting to comply.
a~mptil19 tQ' QOmply•
•
•
barriers. Pursuing strategies
improving the
focus
Communication 'barriers. PurSuing st$tegi~ that foous on ImprovIng the quality, ease of
use. and access to printed,
telephonic assistance channels;
well as
usa, arid acpess fo Ilrinted. electronic, and telepMnic assistance- channels: as weU ~
placement face-to-face
use
-placement of fa~to-faca assistance resources to effectively ,Serve taXpayerS: unlikely to u~
t6 ecti,vely serve taxpayers
other service
otHet serVice channels.
•
Practitioners’ lack of knowledge/understanding of
law. Pursuing
PraGtitlonefs' I~ekof knowl~gelunderstandlng of tax law. Pursuil'lQ strategies designed to
the quality
accessibility
tailored
assistance through
enhance thsqiJality and a(fCesSiJlillty of practitioner assisfa~' tbrough education, tattored'
assistance channels.
monitoring of practitioner behavior and return preparation
assis1aPQ8 ch~nn~ls. and effective mo.nftoring,Qf praetItJonerbehaviQr ~nd f:8tum preearation
quality.
qual~.
'
Administration’s
2008 Budget
includes the funding necessary implement
The Adm; IstratiQIts FY 20Q81audget request IOGludes \th~ndlng Flecessary to Jmplem~nt
many
telephone service
recommended
the
,many of the telephone ~r:vfC:f8' and website enhancements recommende;d by th~ TAB Strategic
Plan. as well
for
individual taxpayer noncompllance and
noncompliance
.' Pl~{\", aewell as funding fer research to understand better Individual t,axp'ayer<
effect of
include:
on
Specific
: the effeCt,df service en compliance. Speclflt; taxpayer service initiatives in the request Include:
•
Expand Volunlel!rlnaome Tax Assista.n~(I(ITA) prqgranis. l'h!S wiJI help expanqlSS
Volunteer Income
Ass/stance (VITA) programs. This will alp expand IRS
volunteer return preparation. ovtread'l arn.f education,and asset-building. $8rvtces to low
preparation, outreach and education, and asset-building services
income, elderly, Limited
Proficiency (~EP),
disabled taxpayers. will increase
income~ elderiy j LImited' English Protlcieney (LEP), and dtsabled taxpa~ers It Will inor~
ability recruit,
assistance,
and
and support
the _abll~ to recrult, train, and supwrt partners for outreach aod tax .asslstal')Ce, and to
partners best suited
identify those partn~rs beshuited to reach special populations.
j
tax
46
D062
Exh.2
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Contact Analytios. This will provide tools for evaluating conta~ -center exP..9riences by
recording, stoling" and analyzing every element of a @Xpayer's seNice call. It wil~
provide the capa~lIrty to d~1I down to individual recorolngs. improving the" ability to
measure call accuracy.·tlmeliness, and professionalism-leading to process
improvements and cost savings. It also YfilllrT)prove the · a~1I1ty to id~ntjfy and respond
to problems -leading to more accurate. clearer responses.to taxpayers. Employee 1
satisfactlon:wiU increase through improved,woit prooesses that allowassistors to
handle more complex calls with fewt;tr tlC'ln~ers.
Expanded Portfolio of T8)(I Law Decision Support Tools. This enhancement to
IRS .gov will provide a common set of support too{s to maximize use by tax~yers,
Pf,Jrtners. and IRS,employees. It will enal:?le userS to conduct key word ~n~ natural
,Itmg,uage queries oil ,a Frequently Asked Questions (FAQs) da~base arid to receive
answers tq tax-law questions on an- interactive basis. By monitoring taxpayer use-. the
IRS can oontlnuously Improve the information p~ovided to. taxpa~eTSl thereby
increasing custdmer satisfaction and operational sa~ings ,
0
-‘
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Begin' innia/ /mplementstion of TAB Strategic Plan recommendatio(1s. Based on the findings
Of the TAS. the funding for this Initiative win Implement telephone sel'Vice and website
electronic interaction enhancements, jncluding the following:
Spanish "Where's My· Refund1 This adds the refUn(i' status 'fea~u(e to the Spanish
webpage on IRS .gQv to prav,ide 1tle Spanjsh-speakfng community with the same level
of customer service av~nable on Ule English webpage.
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Esttmated Wait Tlme, This wjJI p~vjdea real-time message on the telephone service
channel that infqrms taxpayers ab9ut thelr'expected wait time In queue, allowing them '
to rna more infonned pecisions based .on the status of their call. ThiS will reduce
taxpayer byrden and increase customer sstlstact.ion.
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Understanding wpayer needs thl'QUgh the errors ,they make; and
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Developing a better understanping of taxpayer burden;
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Meeting taxpayer needs through the most effective and efficient service channels;
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Examining th$. effect of ser:vice on overall levels of voluntary compliance.
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Conduct re$earch on the effect ofservice on taxpayer complfsf'!C6. This will prqvide
additional resources fora long-term, conce~ research effortto identify ways ,to Glose It!e
tax gap and to base the allocation of r:esources to both service an~ enforcement activities on
a clearer understanding of how these-activities affect voluntary compliance. This will r8Q!J1re
compiling more compreheoslve data over a number of ye~rsJ culm il"j~tjng In yearly analyses
d~si.9ned to quantify the effect of most IRS aclivitJes on the voluntary complianee of specifjc
taxpayer pbpulations. The research w.ill foous 0"' feur are~s:
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47
D063
Exh.2
fr
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There is perhaps no area with greater potential for reducing burden for both taxpayep; and ~e
IRS than Electronic Tax AdminiStra60n (ETA). The. benefits of electronic irrteraction,witJrl
~yers aFa clear and comRGlllng. ManY'taxpay,ers find it mare epnven1entand beneficial to'do
business electronicafly (han to send paper through'the mail. In ~dditj~n. taxpayers can get their
questions answersd and can download the form t~y need at their oonverfence. at any time of
the day or night. For the IRS, handling taxpayer contacts ele,etrohlcall~ mean~S' that employees
can be refoc~ to other high-benefit purposes.
'
Significant challenges remain in ttansitiomng tram a paper-based environment to an'eieotrenic-based environment. The IRS has developed an E..str8tegy far GFowth. which outlines the IRS'
'
plans to reduce taxpayer burden. Ta achieve the strategic goars~ the,IRS will develop and
implement ~file m.arketing strategl~. continue to expa'rld tne use'of electronic-slgnabires, -and
enhan~ IRS website services for lx>th ptaetlUOners and taxpayers. Ultimately. the goa1 of the
fRS IS to offal' all taxpayers antftheir reJ)resentatives the~abllity to cpnquCt nearly all of their
inte~Ptions with the IRS electronically.
•
Mare accurate retums;
•
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Faster refunds;
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A key campanent of ETA for theiRS is e-flling. fhis 8ys1em flas demonst~ed' m~urable
success with regard to 1r1dlvldual taxpayer satl$faction. from itS modest beglnnlngas a pilot
program in 1986 - when 25,000 returnS 'were flled' electronically - ttle number of e-flled Tetums
has dramatically ihCl'eased, with more than 71 mllUon return~ flied eJectronlcallyln the last filln9
seasan. The benefits to these taxpayers Include:
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Federer/State e-filing,
. An additional s~rvjce tfiat allows tax professionals and payers to do busln~ with the IRS
electronically Is e-Servi~t a suite of lntemet based products. These services lrpude,Preparer
TaxRayer Jdentlficatlon Number (PTIN) applipaflons with Instant ~ellvery, T~payer IdentificatJem
Num~r (TIN) matohil"!9 foJUlIrd-party payers, on-line reg1sUatiopior electronic e-Servrces. and
on-line initiation of the e'~onlc return originator application. The e-Services' .IncentiVes
, PfC)ducts offered to InCl'ease e-fllir'lg are on-lin~ Disclosure Authoriza~n, Electronic A~t
Re50lutloA and TranSCript DeIiV~ry System. Que 19 industrY demand. the availjlbi of
incentiVes to those tax professionals and payers that ~file has been lowered from 100 to 5
indiVidual returns. filed.
48
D064
Exh.2
0—0>
'
• •• • • _
P ~
_
'~
._ ~
. . _ _ _- . . . . . . .
.
—
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the
•
•
Improve services through programscat both the national and local level by expanding
collabprations with organizations serving the disabled, Native American communitie_ and
s,
pre-existing rutal infrastructures.
•
Expand and enhance the Spanish website to increase electronic options, Including options
for Spanish language delivery of applications currently only available in English. (AlliO
supports Component 3)
•
Provide Reporting Agents with access to e-Services. (Also s~pports Component 3)
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Another electroplc servlet) success laun~hed recently is the new Onlfne Payment Agreement
available on IRS.gov. Over 90 percent of ta)(payers entering Into payment agreementS with
IRS can now requeSt an agreement and receive confirmation of its approval through this'
application.
00)
ns
resources from
establlspment of the
of
, taken a number of steps to reduce tax~yer burden, including the establishmentofthe Office ef
taxpayer burden.
takøn
: Taxpayer Burden Reductio" (TBR). Recent improvements in IRS forms, processes and
processes
taxpayer
Reduction (TBR)
prooedures include;,
procedures Include:
J
•
•
SirnplifYin.g the filing requIrements for Form M4 (Employer's Annual ?eder$tax Returr);
944 (Employers Anriiial Federal TltX'RetUm);
Simplifying’ the3Iflnrequirements for
•
•
filing FQrm 2$S (ApplicØrn fr Additional xtenslon
Eliminating th.;r need for tiling f’.orm 2688 (Application for Additk;)nal Extensjon of Time to File
ElimInating the n~
1:.1.5. Individual Income Tax Return) by allowing taXpay-ers to-get an automatic six month
~tum) by ailowing taxpayers to jet an
U,S. Iridividual
extension to-file; and
file;
to
50
50
D066
Exh.2
••
Creating the EITC Assistant, an on-line tool that helps taxpayers determine their eligibility for
Creating the EITC AssJstant. ~n on-line tool that helps taxpayers determine their eligibility fQr
the earned inoome tax credit (EITC) and their estimated EITC amount
the earned income tax credit (EITC) and their estimated EITC amount.
Additional projects to simplify tax forms and processes are currently under review by TBR.
, Additional projeqts to slmpflfytax forms and processes are ,cuf1Jntly under I'&view by TBR.
Another IRS resource commitment aimed at addressing the issue of helping taxpayers
. Another IRS resource com{T1itment aimed at addressing the Issue of Melping taxpayers
understand complex tax rules involves form and publication improvement efforts. The IRS
. understand .complex tax rules involves furm and publication Improvemeht effort&. The IRS
originates and improves
forms, instructions and publications to ensure they are technically
, originates and lmproyes tax form'S, instructions and publications to ensure they are technically
accurate, timely, understandable, and as easy use as possible in order for
accurate, timely. unders~ndable, and as easy to use as possible in order for taxpayers to fUlfill
fulfill
their tax filing and payment
There are currently over 1.000 tax products, including
, their fax 'filing anQ payment obligations. The,;e are currently over 1 ,boo tax. products,inCluding
forms, instructions, publications, and Spanish
products. Each
forrps, instructions, publications, a, d S~nish tax products. Each year the IRS revleWs its
IRS reviews its
products
goal simplifying,
burden, increasing understanding. eliminating
p~ucts with the goal of slmplifyfng, reducing burden. Increasing understanding. elimlnati~g
redundancy,
taxpayer feedback, research, and tax law
redund~mcy" and fostering compliance. Based on laxpayerfeedback. research,· a~d ~Iaw
changes, e)(jsting producfs are revised and neY' prOducts developei! regularly. Recentexamples
new products developed
changes existing products are
Recent examples
include
Schedule M-3,
944.
Tax Return,
Include the SchedUle M-3. Form 944 Employers Annual Federal tax .Return, and the new draft
the
Form 990.
Organization Exempt
Tax.
is now available for
F.onn 990 Return for Or.ganizaoon"Exempt from Income Tax, which [s' now a~aiJable fOr public
comment. There are also oomplrance proposals un,der review for Fon:ns1120, U.S. Corporation
compliance proposals under
Forms 1120.
here
Income Tax Retum, and Form 1065, U.S. Return of Partners"ip tncorne. To address poteJ:1tial
Return,
Partnership Income.
potential
issues
individuals
compliance Issues for small businesses and Individll131s with limited English proficiency. chapters
proficiency,
in
Tax,
Publication 334. Tax
in Publication 17, Your Federal Income Tax. and -PubJicatiol1 334, Ta" Guide for'Businesses, are'
for Businesses, are
into Spanish.
being translated info Spanish.
l
is
product
forms~
IRS.gov is used to disseminate tax proauct information and changes. It contain:; draft forms.
contains
final forms,
What’s Hot
Forms. Publications,
Other
final forms.. and a What's Hot in Tax Fo,Jllls, Publicalions, and .other Tax Products. Whicl1
which
includes articles
addition, there
Includes articles- on ,tax product changes. , In addijion, there is an email addresstax
emart address
taxformsfrs.qov -for submitting romments en IRS tax products.
taxforms@irs,QOv for submitting comments on IRS
j
Focus grDups.a:re
~P$yefinfQrroation relatiVe
product
Focus groups are conducted regularly to obtain taxpayer information relative to product
changes. Public interaction is also a focal point of the IRS Nationwjde Tax Forums, an annual
cbanges. P.ublie interacti0n is also a focar PQlnt 0f 8> IRS' Nationwide 1.ax Forums.
venue that provides another opportunity for feedback regarding tax forms and publications, and
venue
provides anott)er opportunity fpr feedback regarding tax
and publications, and
other interactions with stakeholder groups.
other Interactions with
groups.
—
to
init1aves
•
•
Work with Congress to enact simplification legislative proposals in Administration’s FY 2008
Work. with Congress to enact simplification legislative proposals ~n Administration's FY 2008
Budget to:
Budget to:
o Clarify the uniform definition of a child;
o Clarify the uniform definition of a child;
o Simplify EITC eligibility requirements regarding filing status, presence of children, and
o Simplify EITC elig1bility requirements regarding filing stat~s. presence of chlldr:en, and
work and immigrant status; and
wo~ and Immigrantstatu$; and
.
o Reduce computational complexity of the refundable child tax credit.
o Reduce computational complexity of the refundable child tax credit.
51
51
D067
Exh.2
"
•
--. ---_.
-
Continue Tax~yer Burden Reducliol"! projects involving:
Continue Taxpayer Burden Reduction projects involving:
o
o
Simplifying the S-corporation election process;
Simplifying the S-corporation election process;
Simplifying emploYment tax return amendments (Forms 941, 943, 944,
945); and
o Simplifying employment tax return amendments (Forms 941, 943, 944, and 945); and
0
Redesigning Form 8857,
Innocent
Relief.
o Redesigning Form 8857, Request for Innocent Spouse Relief.
I
•
Form and Publication Improvements.
Continue Tax Form and Publication improvements.
52
52
D068
Exh.2
L
Component 7
Partners
Coordinate with Partners and Stakeholders
Conducting outreach and leveraging external partnerships is a key component.
I
The IRS is partnering
leveraging resources with local, state. and federal agencies
The IRS is partnering and leveraging resources with loosl, state, an~ federal ~encies across the
the
country. Examples accomplishments resulting from
relationships include the following:
, country. Examples of accomplishments resolting from these relationsh~ps include the following:
•
Centralizing the process for IRS
reports:
Centralizing tt)e Pf.0C;8SS for U~S assessments based on state audit reports;
•
•
Implementing
Employment Tax Practices
Initiative
ImplementiAg a Questionable Emp.loymenfTax PracticeS (QETP) Initia1ive to develop a
a
federal
interagency approach
employment tax
federal and state interagenqy approach to combat ~mployment tax schemes and inqtease
increase
voluntary compliance.
date, 16 states have
vGluntary compnance. To date, 16 statesM.'Ve agreed to partner with the IRS on this
the
initiative:
InitiativeJ
• Obtaining
agreements
stakeholders
• 'Obtaining 88 agreemen1s in 27 states with stakeholders such as state professio\1allicensJI')g
professional licensing
agencies and local business licensing agencies to distribute educational infonnation to small
business licensing
information
business applicants;
busihess applicants;
•
•
Establishing
Establishing the Leeds Castle Group with the tax administration agencies of China, India,
the
administ't"ation ag~ncies of China, India
South Korea, the United Kingdom, Japan. Australia. Canada, France. and Germany to meet
South Korea, the United Kingdom. Japan. AustraJia, Canada, France,
GermaAY
regularly to consider and discuss issues related to global and national wcadmlnlStration;
regularlY to
and dtscuSs Issues related to global and national tax administration;
•
Developing a Joint Operations Center (JOC) for National fuel Tax Compliance in partnership
Developing a Joint OperatlVD, 'a 10-lessoo interactivev~deo:
3
Oirn
o
0
o
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Electronic n~wsletters1hcludlng e-news for Tax Pr:ofe.ssionals" and -e-neWs for Small
Businesses·;
=.
<,
6
,
Gffer.lng multiple educational products, such as;
Q
•
—.
Implementing Small Business Ferums with Industry representatives and smail business
owners.
(I)
•
o
Delivering informatien through Phone Forums to practitioners, Industry represenfatives t and
small bUsiness owners.
0
.
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Development of rel~tionships with over 1,500 small business industJly and tax professional
organizations to deliver expedltfously key tax-related messagea to small bUsiness aUc:flences.
—
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The IRS also has a robust oL;rtreach and,education program ~ccoriipl18hed throug,h ~Iationships
with national and I~I payroll, practitioner, small business, and indus!rY stakehokfer
, o~anizatIQns. Examples of accompUshments Include:
I
54
D070
Exh.2
I
I
R
Delivering an outreach campaign to i,ndustries that includ~s Auctit Technique Guides and Tax
'
Tips, whjch provide specific Information for -small businesses; and
•
Providing Ethics Seminars for P[actitioners addressing requirements from the Cireuiar 230.
p
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•
Establishing a system to track resolution of prol>lem Issues Identlflad by stakeholders (Issue
Management Resolution System);
•
•
0
Provide outreach and educStlon to unaffiliated tax professionals - those who provide ta~
preparation services but do n0t align themseJVes wlffi a professional organlzationj and
•
Increase outreach and 9$iucatton regarding ~omme~ ,issues, IrtCludjng taxability of sales
'transactions on auction sites.
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Initiatives include development of strategies to:
In addition the IRS works with partners to disseminate tax infarmation on subjects such as the
BTC, child tax credit. e-tile,. Jife..cycJe events, and compliance Issues anq to provide f~ income
tax. preparation to specifiC taxpayer populations (i.~., /ow income, elde~YJ limited ~nglish
proficiency. dlsablea). Relationships e)(ist With 60 national partners such a AARP, Armed
Forces Tax Council, United Way, Health & Human Services, AnnlllE. C~sey, ~nd the KellQgg
Foundation. In additiafl, 'the IRS supPorts more than 300 coalitions natiOriWide. COl11prised of
thousan(1s of community partners who educate or serve millions of taxpayers. This effort
facilitated the opening of over 12,000 VITA and Ta){'Counselingfur the Elderly sites with more
than 68,000 volunteers' ~urin9 the 2Q06 flUng season.
I
Engage all 50 states through the State Reverse File Match Initiative (SRFMI) - a process that
matches IRS extracts received through the Govemmentalliaison Data Exchange program
against state maSter 'files to identify Individuals and businesses who filed a state return but
not a federal retum and to Identify differenceS in federal and state income reporting. (Also
3
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C
ø-.
Further entlance the FedlFed program by facilitating aod expanding partnerships with other
federaJ agencies to improve tax administration. (Also supports CQmponent 4)
0 =
•
< z
.
Implement a Questionable Employment Tax Practices (ORP) initiative In partnership with
1he Department of'Labor, the National Associ~tion of State Workforce Agencies, the
Federation of Tax Administrators, and state workforce agencies, to provlqe a collaJ:>orative
n~tional approach lQ co01bat employment tax 'schemes. (Also sUPPQrts Companent 4)
(00
•
>
I
Further enhance the centralized process to maximize the 'utiUzation of State Audit RepOrts
(SARs) by IRS far federal assessments. (Also.supports Component 4)
I
•
•
a
nitiatives
"
"'"
..
,
-..
-
-
N
.~
--
-,
-_.,
..... "._ .. .....
--,.
55
01
(7’
-------
C
0
03
00
0
Determine -tax administration benefits of utiUzing state date warehouse eQncepl (Also
suPPOrts Components 3 and 4)
ts
•
I
I
supports Componeflf 4)
D071
Exh.2
i.
•
!
•
a
ed~~~~~:;' targeted
perso~n~~-rp eparing
Develop
military
Develop an educational targeted outreach DVD for military personnel preparing for
~)
(Also
retirement. (Also supports Component 5)
Enhance
industry audiences about
Guides and
Enhance outreach efforts to industry audiences about available Audit Technique Guides and
Tax Tips.
Tax
•
Develop and widely distribute educational fact sheets on areas of high noncompliance.
Oevelop
distribute
•
Develop a strategy to reach practitioners without affiliation to a professional organization
organization.
•
..i
IRS.gov
Industry. practitioner, educational.
Establish links to lRSgov on industry practitioner. educational and governmental
stakeholders"
stakeholders’ websites.
a
•
.. j.
Leverage key partners such as the SBA and Its SCORE program and SBDCs to deliver small
its
SBOCs
business workshops to the new business community.
l.
a
Deliver educational messages through existing relationships with universities and colleges.
college~.
•
wait
Develop audio educational messages for toll-free wait times.
•
I.
Customize outreach to specific industries to encourage voluntary compliance.
!•
.
Request feedback from internal and external stakeholders on existing outreach and
int~rnal
educational programs to identify best practices and enhancements.
I.
•
I
•
f, •
filers.
Develop strategies to educate first-time business filers,
,
.
With foreign
admlnlstratfons
Expand relationships and collaboration with 'foreign tax administrations to increase the
informal and formal communications on international tax administration matters.
administratien
Return to Table of Contents
56
D072
Exh.2
SUMMARY
To implement the steps outlined in this report successfully, it is imperative for the IRS to have a
highly trained and engaged workforce. While not addressed in detail in this report, the IRS is
committed to employee engagement, ongoing training assessments and delivery, ongoing
agency-wide communications, employee and managerial burden reduction, leadership
empowerment, and succession planning. The IRS has extensive action plans and strategies in
each of these areas. For example, in the area of succession planning, the IRS has established
a Leadership Succession Planning office and is implementing a Leadership Succession Review
(LSR) process in FY 2007. The LSR process involves leadership assessments of all senior
managers, executive review of the assessments, and one-on-one feedback and discussion of
executive potential.
The actions outlined in this report address improving compliance through a balanced approach.
This report describes steps currently being taken, and those under development, by the IRS to
reduce opportunities for tax evasion, details how the IRS will leverage technology, recognizes
the critical need for a strong taxpayer service program, discusses development of taxpayer
service initiatives, and describes legislative proposals that, when implemented, will improve
compliance. At the same time, the initiatives maintain respect for taxpayer rights, limit burden
on compliant taxpayers, and present an outreach approach to ensure all taxpayers understand
their tax obligations. This report also details the importance of having a multi-year research
program that will assist both in understanding the scope and reasons for noncompliance.
It is important to take all reasonable steps to improve voluntary compliance. As more is learned
about the causes of noncompliance and ways to improve voluntary compliance, strategies will
be modified to reflect the latest information.
It is clear that consistent efforts to keep the complexity and unnecessary burden of the tax
system to a minimum, to provide the level of service that the taxpaying public deserves, and to
maintain a strong and well-targeted enforcement presence are necessary to improve
compliance rates. The IRS is committed to applying its resources where they are of most value
in reducing noncompliance while ensuring fairness, observing taxpayer rights, and reducing the
burden on taxpayers who comply.
Return to Table of Contents
57
D073
Exh.2
APPENDIX
APPENDI
Timeframes for Initiative Implementation
Initiative Implementation
Related Tr:easury
Initiatives
I
a
FY2009
Milestones
Strategy
COmponent(s)t
(Bold = Prin,ary)
Work with Congress
to enact remaining
legislative proposals
included in the
Administration’s FY
Administration's
2008 Budget.
1,6
Ongoing
IRS will continue to identify
legislative proposals in
partnership with Treasury
2/09
IRS will continue to identify
legislative proposals in
partnership with Treasury
q
~
t 1. Reduce Opportunities for Evasion; 2. Make a Multi-Year Commitment to Research; 3. Continue Improvements in Information Technology; 4.
1. Reduce Opportunities for Evasion; 2. Make a Multi-Year Commitment to Research; 3. Continue Improvements in Information Technology; 4.
Improve Compliance Activities; 5, Enhance Taxpayer Service; 6. Reform and Simplify the Tax Law; and 7. Coordinate with Partners and
Improve Compliance Activities; 5. Enhance Taxpayer Service; 6. Reform and Simplify the Tax Law; and 7. Coordinate with Partners and
Stakeholders.
Stakeholders.
t Check indicates initiative will continue beyond FY09 depending on budget availability.
Check indicates initiative will continue beyond FY09 depending on budget availability.
D074
58
58
Exh.2
Relate4 Treasury
Related Treasury
I nlua yes
Initiatives
Strategy
Strategy
FY 2008
FY2008
FY2009
FY 2009
Component(s)
Componant(s) t
Milestones
Milestones
Milestones
(Bo’d Ptknary)
(Bold :; Primary.)
6/30/08
7/30/08
Identify approximately 250
items for which guidance is a
priority
7/30/09
Identify approximately 250
items for which guidance is a
priority
8/30/08
Release the 2008-2009 Priority
Guidance Plan (PGP)
8/30/09
Release the 2009-2010 PGP
9/30/09
Release at least 80% of the
items appearing on the 20072008 PGP
I
Request recommendations
from stakeholders for topics on
which guidance should be a
priority
9/30/08
Develop regulations
and other published
guidance clarifying
ambiguous areas of
the law, targeting
specific areas of
noncompliance and
preventing abusive
behavior.
6/30/09
Request recommendations
from stakeholders for topics on
which guidance should be a
priority
Beyond
FY 2009
Release at least 85% of the
items appearing on the 20082009 PGP
D075
59
59
Exh.2
1
\'
" ,'Ii .,.y:; ~~"';f- ,~,
r:
~l~
[.
Initlatlv.es
Initiatives
':.~
0-
1
•.;11
'·I·~.~"III
R~aied Treasury
Related Treasuty
~~' Strategy
Component(s)J
Cp)t
-.r
'...,.~ .'l ~
(BOld Primary)
çd = Primary)
"
'
I
- -..:,~, '~-....", . I
•
~
'I
.
'i,"'
-.-"'j.:~
: r,.~·
J~
Pt’
'.FY 2008
MII~nes
Milestones
-
:;': ....... :~:./:~
'/ _ ::__ ' ,,~"
.~I
•
'-'~ ~'l ~
(·:r;
1 0/1/07
10/1/07
Undertake additional
compliance studies,
including S
corporations and
individuals.
Update tax gap
estimates using new
and existing data.
Research the effect of
service on taxpayer
compliance.
.. \
ti..l~ • ~
Begin reporting compliance
study for TY 2006 individual
income tax returns
',.
FY 2009
Milestones
Beyond
FY 20O9
FY2009*
Io['f:-/
10/1/08
Begin reporting compliance
study for TY 2007 individual
income tax returns
2
q
~
6/30/08
Corn plete
Complete S corporation
compliance study
6/30/08
Release S corporation reporting
compliance study tabulations
2
2
6/30/09
Update payment and filing
compliance estimates
6/30/08
Update payment compliance
estimates
9/30/08
Undertake at least three
significant research projects
linking service to compliance
(e.g., study relationship
between taxpayer attitudes and
compliance)
‘I
~
9/30/09
Undertake at least three
significant research projects
linking service to compliance
(e.g., study how particular types
of service delivery affect
individual compliance)
D076
60
Exh.2
~ '.~i!.~:~ ~~~_:~..rt!:~~ l~:;'
Treasury
Related TreasurY
!iJ,I
, , ,
Strategy
Stmtegy
:,),~ InWatives :
lnlti8ttvCornponent(s)t
'" Component(s)t
:Jo~
I~
Ii
('..
'
'
'T1
_
_.
_.~~ ~ :~';4i~ ~
I
):
Research the
relationship between
complexity, burden,
and compliance.
Improve high income
and non-EITC exam
workload selection
and method of
delivery and assess
the effectiveness of
the exam treatment
stream on selected
nonfifer
nonfiler cases.
(Bold = Primary)
(BGld
.lL
FY2008
FY 2G08
,MllestonEts
MUestories
"
~
"
0,"
,.
,
~
..
<
~
"
"
-,
..
... ,/1
I ';
II,
"r
, ft;
,-,.,-j",
,
~
"
-.
~.I~
,ft. ".
.
-,
,
•
-,
"
'FY2009
FY 2009
Milestones
I
c
,
'
~
'1
,Beyond
BeYond
FY 200
FY2009*
"
I
"
,.r.' =',
.,.A, . . . . . :
,
~
...... - .
9/30/09
Undertake survey of individual
taxpayers to improve burden
estimates (e.g., conduct a new
survey of individual taxpayer
burden)
2
3,4
3 4
9/30/09
Begin at least three research
projects focusing on the
relationships between
complexity, burden, and
compliance
10/1/07
Begin selecting, classifying,
and auditing individual returns
based on updated selection
scores derived from NRP TY
2001 results
10/1/08
Begin evaluating the
productivity of high-income
taxpayer cases identified using
the revised scores and activity
codes
1/30/08
Implement initial phase of an
automated case screening and
selection process
~
9/30/09
Complete implementation of the
automated case screening and
selection process
D077
61
Exh.2
--
j',,';
-
Related'Treasury -~.,i'. <'oi\~": ~.
,
. :.
Related Treasury , ( .. -.. "",,p
Strategy
....·~--',,:': FY 2008
$Y
Strategy
'..r; Component(s)t ,: J". -, ~:.~ Milestones
Component(,s)l
I
_,
'.-
'
ath,es
Initla~!.ves
fli
~
'" .,
_.~ ,:~.-
I
~
=
(Bold Prlmsll)
(Bold__Primary)
Expand AUR Auto
Notice Generation to
include additional
3 4
A
all
income types and a l l '
Form 1040 family
returns.
Evaluate the AUR
matching process,
and implement an
improved case
scoring and selection
concept to select the
most productive
cases.
to,,-'" ..~
.,
<_.::-/' . . _
...
4
,',
.... -.';','
f-"';;'
..;.,
..
'r..
":·. ).,I~
~
•
I
9/30/08
Expand the volume of auto
notices bypassing the
screening phase on 1040
series returns
."'"
'I
-
-
.
..
;'" . FY 2009 - .~- .. '~: Beyond
fY
J~~
Milestones
FY 2009
Mlletones ... _~'. :,FY 2009*
~
•
_ --~',:.. - ,:. ' .
1
9/30/09
Expand the volume of auto
notices bypassing the
screening phase by including
the entire ELF Form 1040
series and add cases from
SB/SE inventories
~
Add withholding to the auto
notice income issues in an
effort to work the most
productive cases
12/31/07
Reengineer the AUR matching
process to improve coverage
and maximize resource
utilization resulting in increased
AUR closures
3, 4
•.•. "
9/30/08
Streamline overhead costs by
reducing manual screening
9/30/09
Implement additional
improvements to workload
(eg.,
selection tools (e.g.,
incorporating results as
feedback to validate
rules/score, and adding the
capability to select cases for
different treatments)
9/30/08
Complete studies and
implement an enhanced
workload selection system
L -_ _ _ _ _ _ _ ' - - -
D078
62
Exh.2
.
~~ :-=t~~~. _.• ~~ ~~~.. ~~': : _-: ~ .;-#J
~
,,"
Initiatives
: If.; • ..1,=:
,;
'(.
r~'."
I
.~
l
Ui;.!1...
: Related Treasury
'Freasury
,
Strategy
.
Stmtegy
.. ,;
Component(s)t
'Component(s)t
Develop system
requirements for
expanding the AUR
Soft Notice Test,
which involves asking
taxpayers to
voluntarily self-correct
for future years.
Develop
enhancements to the
Compliance Data
Warehouse to
improve workload
identification and
prioritization
algorithms, allowing
better evaluation of
alternative treatment
streams and ensuring
Collection cases
receive the most
efficient and effective
treatments.
(Bold
=Primary)
"~
FY200B
FY 2008
Milestones
'--::!
w~·~ '" '.
'
~
'·.r-r·~
.,.,,"' ...... ' .. ,
.
I
,
....
]..,.
"
9/30/08
9130108
Develop and complete
programming requirements
A
3,4
L
.'Or
i
_;.
,;1.
-,
I'
,
;'>,.
.
~
' r
1-'~"'tr
I
.,/:,: 'r
.'
,
-.
.
'
,
:
',""
j ~
~"I'
.~l
~:.'-~.
~
j
FY 2009
FY2009
Milestones
,
9/30109
9/30/09
Implement initiative for
approximately 250,000
taxpayers
‘
1/1/08
1
Release Phase 1
"
. Beyond
Beyond
FY 2009
FY2009*
~
1/1/09
Release Phase 2
3, 4
3,4
D079
63
Exh.2
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