NSA Member Update: IRS National Public Liaison (NPL) Monthly Practitioner Meeting

On behalf of NSA members, John Rice, CEO, and Jessica Jeane, director of public policy and communications, attended the IRS NPL Monthly Practitioner Meeting on September 24, 2020. Ahead of the meeting, NSA brought several member concerns to the IRS’s attention. NSA remains in regular contact with the IRS NPL Office; if members have general questions they would like NSA to present during the next NPL meeting on October 15, please contact Jessica Jeane at jjeane@nsacct.org.

Highlights of the September NPL Practitioner Meeting are as follows:

Services & Enforcement

• Backlogged Mail: The IRS has made progress on getting up-to-date with the backlog of over 20,000 pieces of mail sent to the IRS during the COVID-19 related shutdown, however, the backlog continues to be an issue. Progress, as well as delays, are reportedly dependent upon each campus’s geographical location and other potential factors outside the agency’s control.  * No projected timeline is currently available as for when the IRS will be fully caught up on the backlog of mail.
• Refunds: For taxpayers who are still waiting on refunds, NSA suggests checking the IRS’s Where’s My Refund tool. As the IRS notes on its website, do not file a duplicate return. In addition to the possibility that the IRS has not yet opened the mail containing the paper return, it is also possible that there are other issues that have occurred throughout processing of the return.
• Economic Impact Payments (EIP): The IRS is preparing to send out approximately 9 million letters to individuals who are considered non-filers for the last two years alerting them to the fact they are eligible for an EIP. A September step-by-step guide for using the IRS’s EIP tool can be located here. The online portal for non-filers to register their information with the IRS to receive an EIP is currently open until October 15.
• Collection: The IRS announced on August 21, 2020, that it would temporarily stop mailing balance-due notices, the CP501, the CP503and the CP504, all of which are follow-up notices typically sent to taxpayers who do not respond to the CP14. The IRS is aware the backlog of mail has caused certain issues involving these notices. The follow-up notices, many of which were sent out via an automatic process, will be temporarily stopped until the backlog of mail is reduced.

Taxpayer First Office

• The IRS’s Taxpayer First Act Office (TFAO) was created after the enactment of the Taxpayer First Act (TFA) (L. 116-25) in 2019. In February of this year, NSA submitted several recommendations to the IRS on how restructuring could benefit both the IRS and individual taxpayers, while also serving to facilitate and strengthen the relationships between the IRS and the tax practitioner community.
• Although the pandemic reportedly pushed back the original summer 2020 congressional report timeline, the TFAO is now expected to submit its report required under the TFA to Congress this December.
• Three overarching goals within the TFAO – enhance the taxpayer experience, enhance the employee experience (to give employees training and tools needed so they can deliver the better taxpayer experience), and to improve operational efficiency.
• Guiding TFAO principles: Listen, Learn, then Decide (TFAO team traveled to 25 locations across the country to gather insights on how to create and deliver on a better taxpayer experience.)
• The TFAO is still establishing the reorganization structure of the IRS, which is being developed by first evaluating strategies formed to evaluate how to enhance taxpayer and employee experiences.

Office of Professional Responsibility

• E-signatures: The IRS is continuing to implement and evaluate a means to accept more digital signatures. The interim solution, which is now looking to be a more of a permanent solution, would allow tax professionals to submit a Form 2848, Power of Attorney (POA) or Form 8821, Tax Information Authorization, reflecting the image of digital signatures beginning in January 2021. The anticipated long-term solution is the creation of the Tax Professional Account, where an online POA can be created.

Newly Created Fraud Enforcement Office (FEO)

• The new FEO office is housed under the IRS Small Business/Self Employed (SBSE) Division and works on agency-wide compliance issues.
• Fraud enforcement subject matter experts are stationed throughout the country to assist compliance officers and agents as cross-functional liaisons.
• FEO is increasing number of audits, while reportedly noting specific cases when aggressive tax planning crosses the line.

Return Preparer Office

• The Return Preparer Office has no enforcement authority; all issues are forwarded to appropriate IRS compliance-related division based upon referral criteria.
• Preparer tax identification number (PTIN) renewal season opens October 15, 2020, with certain early renewals permitted beginning October 9, 2020, to ensure the system is working correctly.
• The PTIN User Fee is being reinstituted this year.
• Beginning October 1, 2020, IRS will send letters to a few hundred enrolled agents (EA), who did not include their SSN on applications, notifying them that the IRS has added that information to their account, which will affect renewals cycle.
• Continuing education requirements must be completed by December 31, 2020.

Wage & Investment (W&I) Division

• Starting in January 2021, the IRS is expected to expand the Identity Protection (IP) PIN voluntary opt-in program nationwide. The six-digit IP PIN provides additional protection against tax-related identity theft.
• When prompted by tax preparation products, clients or their tax preparers must enter the IP PIN issued to the primary and/or secondary taxpayers or their dependents.
• An electronic return without a correct IP PIN will be rejected; paper returns are expected to be subject to greater scrutiny.
• Taxpayers with either an SSN or Individual Tax Identification Number (ITIN) who can verify their identities are eligible.
• An IP PIN is valid for one calendar year – must obtain a new IP PIN each year at the start of the filing season by accessing the account they created at irs.gov/ippin.
• Currently, there is no opt-out feature, however, the W&I Division is expected to look into adding this feature later for taxpayers with online access