National Taxpayer Advocate Erin Collins is urging the Internal Revenue Service to expand online services for taxpayers, tax practitioners and businesses while reducing its reliance on paper to improve service to taxpayers.
In a blog post On Thursday, Collins offered a number of recommendations for improving online taxpayer services, some of them taken from his most recent annual report to Congress. Collins pointed to problems the IRS had with processing paper correspondence and tax returns, frequently referring to paper as the IRS’ “Kryptonite.” These issues were magnified during the pandemic, when the IRS saw millions of pieces of correspondence piling up in trailers outside IRS facilities in 2020. The IRS is still catching up with the last year’s paper correspondence.
The IRS has offered online taxpayer accounts for several years, but their functionality is currently limited. Currently, they can view their account balances, make payments, view tax records, view certain notices and letters, and view authorizations for online requests from their tax preparer.
The IRS came under fire earlier this year for using a third-party contractor, ID.me, which began asking taxpayers to submit a selfie and a government document like a driver’s license for authentication to deter identity theft. Privacy advocates pushed the IRS to offer other options, and the IRS responded by offering a virtual interview option while seeking to switch to the federal government’s Login.gov service.
Collins offered several suggestions in his blog to improve taxpayer service, including the ability to send and receive messages with the IRS; upload or download documents or data; chat electronically with an IRS representative; receive pending action item emails; and electronically access notices or correspondence, as well as the ability to download responses. It also wants taxpayers to be able to obtain declaration or payment reminders and regular billing statements online; check the status of an original or amended tax return; receive notification of delays and instructions on how to clarify an issue; and contact an IRS revenue officer, revenue officer, or appeals officer.
“Imagine what the IRS can accomplish and how much time and effort it could save if taxpayers could easily access their tax information online,” Collins wrote. “I would like to stop just imagining this; the IRS should have robust online accounts available to all taxpayers and tax professionals that provide information, advice, and the ability to work and resolve issues online.
She noted that while the IRS offers some digital self-service options such as the IRS2Go app, the Where’s My Refund? and Where is my amended return? online tools and digital taxpayer communications, many of which are stand-alone applications that are not easily accessible from a central location or able to provide a holistic experience for taxpayers and tax professionals. Additionally, corporate taxpayers currently do not have the ability to access a business account online to retrieve a transcript or view payments, and tax practitioners do not have the ability to access their clients’ data in the TaxPro account.
“Tax professionals play a key role in tax administration,” Collins wrote. “Providing them with convenient access to their clients’ data and enabling them to communicate electronically with the IRS and take taxpayer-authorized action would be invaluable in helping tax professionals better assist taxpayers.”