IRS’ updates could backfire, report warns
But tax agency defends high-tech plan, which hasn’t been finalized
NEW YORK The Internal Revenue Service is quietly moving toward a high-tech future that could end up hurting taxpayers and costing them more money, a new report warns.
Since 2014, the IRS has invested millions of dollars on a plan to make better use of its limited re- sources, including adoption of online taxpayer accounts.
But the plan, which has yet to be made fully public, could add to people’s costs come tax season — and discourage them from paying their dues, warned the National Taxpayer Advocate in its annual report to Congress, released Wednesday.
“I have significant concerns that the IRS is embarking on a path that will unintentionally undermine taxpayer rights rather than enhance them, thereby eroding taxpayer trust further,” wrote Nina Olson in her report to Congress.
Olson said she is not against the IRS becoming more technologically savvy. But she is worried that the IRS is creating a “pay-toplay” system, wherein only people who can afford professional help will receive assistance filing their taxes.
Olson called for the IRS to “immediately publish its plan and solicit public comments.”
She also asked that Congress hold hearings in the next few months on the IRS’ plans to move more activity online. “Congress needs to assert its oversight authority and insist that the IRS come now, sooner not later, to explain the specifics of its future state vision,” Olson said.
In an emailed statement, the IRS defended its plan, saying it will allow the agency to remain “fully committed to personal service to taxpayers.”
“These efforts are ongoing and have not been finalized, and the IRS emphasizes feedback from outside parties has been and will continue to be an important part of the process,” the agency statement said.
“The National Taxpayer Advocate’s report does not paint a full picture of these evolving Future State efforts. The Advocate seems to want the IRS to continue to do business the way we did 10 years ago.”