Land Grant University Tax Education Foundation 2017 National Income Tax Workbook Chapter 7, IRS Issues Communication & Liaison Presenters:LaTanya Bacon/Dennis Bell/John Linstead Fall/Winter 2017-2018

Learning Objectives Understand IRS private debt collection Understand NRP Audits Uses of IRS audit technique guide Recognize and protect against ID theft Use IRS e-Services tools Discuss current status of IRS Understand current-status of PTIN system (Page 205)

Issue 1: Private Debt Collection Private Collection Agencies: CBE Group ConServe Performant Pioneer (Page 207)

Private Collection Agencies Assign initial cases to agencies in the spring of 2017 Covers tax debts owed that are currently not being worked by the IRS Agencies will work with the taxpayer and the representative to resolve the unpaid account (Pages 207 & 208)

Efforts to Mitigate Scams IRS will send taxpayer and rep written notice that it’s transferring their accounts Agency will send separate letter to taxpayer and rep confirming transfer Agency employees must follow Fair Debt Collection Practices Act Visit IRS.gov, “Tax Scams and Consumer Alerts” page (Page 208)

Fair Debt Collection Practices Act Act created guidelines for debt collectors Defines rights of consumers Prescribes penalties and remedies of violations (Page 210)

Reporting Misconduct Information on PDC found on IRS.gov Report complaints and misconduct to TIGTA (Pages 211 & 212)

ISSUE 2: NATIONAL RESEARCH PROGRAM (NRP) AUDITS Replaced Taxpayer Compliance Measurement Program (TCMP) in 2002 Measures compliance Provides data to aid strategic planning Uses case building data to determine return accuracy Streamlines electronic data collection I.R.M. § 4.22.1.4 (Page 214)

Benefits of NRP Minimize taxpayer burden Collects data to meet business objectives Update discriminant function (DIF) formulas Update workload selection models yearly Effective use of limited IRS resources Pre-filing activities enhance compliance Redesigned forms, improve communications, and suggest law changes (Pages 214 & 215)

Issue 3: Audit Technique Guides Provides IRS examiners insight into issues and accounting methods unique to specific industries (Page xxx) (Page 216)

Issue 4 : ID Theft, Scams and Safeguards Three Warning Signs - Individuals Taxpayer learns of a duplicate SSN either from an IRS notice or e-file return rejects IRS notice about additional tax owed, refund offset or collection action when no return filed Taxpayer receives information from an employer unknown to them (Page 218)

Warning Signs - Business Your client receives IRS notices about fictitious employees Your client notices activity related to or receives IRS notices regarding a defunct, closed or dormant business after all account balances have been paid Your client’s return is accepted as an amended return, but the taxpayer has not filed a return for that year (Page 218)

Steps for Victims of Tax-Related Identity Theft Complete and file IRS Form 14039 Respond to any IRS letters or notices Continue to pay taxes, even if by paper Place a “fraud alert” on credit accounts by contacting one of the three main credit bureaus Close any accounts opened by criminals File a complaint with the FTC (Page 218)

Security Summit Initiatives Shared data elements from return Required stronger password protocols Agreed on ISAC Agreed on stronger cybersecurity framework Two-factor authentication protections for certain IRS.gov tools (Page 219)

Initiative Results for 2016 More returns stopped before entering processing pipeline Confirmed identity theft returns dropped 30 percent Fraudulent refunds identified by banks fell 50 percent People identifying themselves as IDT victims fell 46 percent (Page 219)

Security Summit Initiatives - 2017 Shared data elements expanded to business tax returns W-2 Verification Code test expanded to 50 million forms Additional data elements identified States partnering with banks Summit partners working to identify “ultimate bank accounts” (Page 219)

Tax Practitioner Awareness Protect Your Clients, Protect Yourself Register for e-News for Tax Professionals Follow the IRS Twitter for tax professionals (Pages 222 & 223)

Responding to a Data Breach Contact your local Stakeholder Liaison www.irs.gov keyword search “stakeholder liaison” to find contact for your state IRS may be able to help protect your clients if notified quickly Review “Data Loss Information for Tax Professionals” at IRS.gov/identitytheft for additional steps (Page 224)

Issue 5: E-Services & Online Tools (Pages 226 & 227)

Staying Current Tools for Tax Professionals (IRS.gov) Quick Alerts e-News for Tax Professionals Other Subscriptions (Page 229)

Issue 6: Current IRS State (Pages 230 & 231)

Issue 7: PTIN Issuance and Renewals On June 1, 2017, the United States District Court for the District of Columbia upheld the IRS’ authority to require the use of a Preparer Tax Identification Number (PTIN), but enjoined the IRS from charging a user fee for the issuance and renewal of PTINs. As a result of this order, PTIN registration and renewal was suspended on June 2. (Page 246) (Page 233)

PTIN Issuance and Renewals PTIN issuance resumed, without charge, on June 21, 2017 The IRS, working with DOJ, is still considering how to address the court order Additional information will be posted on the IRS.gov Tax Pros page when it becomes available (Page 246) (Page 233)

Contact Information LaTanya Bacon 216-415-3507 LaTanya.J.Bacon@irs.gov Dennis Bell 614-621-7536 Dennis.C.Bell@irs.gov John Linstead 513-975-6429 John.H.Linstead@irs.gov