During a public meeting held June 24, the Electronic Tax Administration Advisory Committee (ETAAC) presented its 2014 Annual Report to Congress, which detailed various observations and recommendations. Among these suggestions were five key areas that can be improved.
The 11-person committee was first created in 1998 as part of the IRS Restructuring and Reform Act of 1998. One of the members of ETAAC is Convey Compliance Systems Inc.’s Troy Thibodeau, executive vice president. Troy will serve as Vice Chair of ETAAC this next year.
Each year, ETAAC presents this report to provide an update on the IRS’s progress toward meeting goals related to electronic tax administration. One key indication of the agency’s success was that in 2014, more than 80 percent of individual returns were filed electronically, marking the third consecutive year that the IRS has exceeded its goal.
Other types of returns continue to post rates below the goal, particularly exempt organization forms and employment tax returns, the Form 94x series. The latter has had the slowest rate of e-file adoption over the past five years.
ETAAC noted that the IRS is experiencing setbacks resulting from budget cuts as well as strained resources due to the implementation of new tax reporting under the Affordable Care Act (ACA) and Foreign Account Tax Compliance Act (FATCA).
The committee’s recommendations
The first suggestion ETAAC gave for the IRS is to continue its success with the e-filing rate and work toward e-file growth and improvement. It also said that the agency should direct resources toward the ACA and FATCA. For the health care law, there was a call for easing the burden on taxpayers and tax professionals regarding the reporting of advance payment of premium tax credits and more accuracy of information provided. Related to FATCA legislation, ETAAC recommended that the registration portal for foreign financial institutions (FFIs) be improved for accuracy and efficiency.
“ETAAC commends the IRS on another successful filing season and recognizes the IRS’s continued efforts to achieve an 80 percent electronic tax return filing beyond individual returns,” said Cyrus Daftary, ETAAC chair. “As the IRS manages the various electronic administrative initiatives, ETAAC recommends the IRS continue its effort on the successful implementation of the Affordable Care Act and the Foreign Account Tax Compliance Act.”
To further encourage e-filing, the committee also said the IRS should have a single PIN for e-signatures while concurrently expanding usage and security around electronic signatures. It also suggested the availability of secure, personalized online accounts for tax professionals and individual and business taxpayers.
