THE WHITE HOUSE
Office of the Press Secretary
| | | President Clinton and Vice President Gore | | | | Delivering an IRS for the 21st Century | | | | July 22, 1998 | | | | |
| | | In 1997, the President directed Vice President Gore and Treasury |
| Secretary Rubin to conduct a top-to-bottom review of customer service| | at the IRS. The result is a complete revamping of customer service | | at the IRS under the leadership of a new IRS Commissioner, Charles | | Rossotti. The common thread is putting the customer, the taxpayer, |
| first. Reforms include: | | | | Expanded and improved phone service -- 24 hours-a-day/seven | | day-a-week starting in January. | | | | Successful institution of Problem Solving and Problem Prevention | | days. | | | | Launching of the first Citizen Advocacy Panel to give taxpayers | | an independent voice. | | | | Development of a helpful and user-friendly Web site. | | | | Expanded innovative electronic filing programs -- one in five | | returns was filed electronically this year, a 28 percent | | increase over last year. | | | | The bipartisan bill that President Clinton signs today will | | build on these reform efforts to deliver an IRS for the 21st century.| | The bill: | | | | Includes nearly 70 provisions to strengthen taxpayer rights. | | | | Improves customer service through greater accountability. | | | | Strengthens and makes the Taxpayer Advocate more independent. | | | | Advances structural change to improve customer service. | | |
Highlights of the IRS Restructuring and Reform Act of 1998:
Strengthens Taxpayer Rights -- The nearly 70 provisions strengthening taxpayer rights include:
Innocent Spouse Relief -- The bill expands protection for innocent spouses who, for legitimate reasons, were unaware of the total tax responsibility when they filed joint returns and later find themselves liable for substantial additional taxes. Specifically, the new law will:
Allow for a separate liability election for taxpayers who are divorced or legally separated, or have been living apart for at least 12 months. Expand the authority of the IRS to consider "equitable relief" where it is inappropriate to hold an innocent spouse liable for all or part of any unpaid tax or deficiency arising from a joint return.
Tolling the Statute of Limitation for Disabled Taxpayers -- The bill allows the time limit for claiming a refund to be extended for the period of time taxpayers are subject to a disability that prevents them from managing their affairs.
Due Process in Collection Efforts -- Taxpayers facing certain types of IRS collection actions will be given 30-day advance notice. During this period, the taxpayer can demand a hearing before an appeals officer, at which the taxpayer may raise any relevant issue, if the taxpayer had not previously been able to challenge the issue in another forum. Taxpayers may appeal the decision to Tax Court.
Reduced Penalties on Installment Agreements -- The IRS has 2.5 million active installment agreements with taxpayers. For taxpayers who are trying to pay what they owe, this bill will cut penalties in half.
Shifting the Burden of Proof -- For most taxpayers, the burden of proof will shift to the IRS in court proceedings if certain requirements are met. The taxpayer must introduce credible evidence regarding the dispute, have maintained adequate records, and met substantiation requirements, and have cooperated with the IRS.
Improves Customer Service through Greater Accountability -- The bill requires IRS employees to identify themselves in certain letters and phone calls with taxpayers.
For the 59 million taxpayers who call the IRS each year, the IRS employee taking the call will provide the taxpayer with his or her name and a unique identifying number.
On all of the ten million plus manually generated letters issued by IRS each year, the IRS will include the name, telephone number, and unique identifying number of the IRS employee whom the taxpayer may contact regarding the correspondence.
Expands Electronic Filing -- The bill mandates a number of improvements in the ability to electronically access IRS for filings, information and material:
The bill sets a goal that 80 percent of all returns should be filed electronically by year 2007.
After 1998, the IRS is required to make all forms available on the Internet in a searchable format.
Strengthens the Taxpayer Advocate -- The bill makes the National Taxpayer Advocate more independent to serve taxpayers better:
Makes the local taxpayer advocates report directly to the National Taxpayer Advocate and thereby independent from the IRS examination, collection, and appeals functions.
Expands the circumstances under which the Taxpayer Advocate can provide relief if a taxpayer is suffering hardship.
Authorizes the National Taxpayer Advocate to identify taxpayer problem areas and propose administrative changes to fix them.
Advances Structural Change to Serve Taxpayers Better -- To improve service the bill authorizes the IRS to move forward with Commissioner Rossotti's plan to organize the IRS by customer group, such as small businesses.
Establishes a New Oversight Board -- The bill creates a nine member oversight board. Six private sector members will provide expertise in areas such as management of large organizations, customer service, and information technology. The bill ensures institutional oversight by including the Secretary of the Treasury, the IRS Commissioner, and an employee representative on the IRS Oversight Board.
The Bill Builds on Ongoing Efforts to Reform the IRS
In 1997, the President directed Vice President Gore and Treasury Secretary Rubin to conduct a top-to-bottom review of customer service at the IRS. The result is a complete revamping of customer service at the IRS under the leadership of a new kind of IRS Commissioner, Charles Rossotti -- who has a background in business, customer service and information technology. The changes include:
Expanded and Improved Telephone Service -- Taxpayers are experiencing more convenient and reliable telephone service than ever before:
Expanded Hours -- The phones are now open 16 hours a day/six days a week. In January, phone service will be available 24 hours a day/seven days a week.
Improved Phone Service -- This year nine in ten calls are being answered on the first try, compared to six in ten last year.
A Helpful IRS Homepage (www.irs.ustreas.gov) -- Taxpayers can go to the IRS Homepage to get forms, information, and instructions:
Web site use is skyrocketing -- 345 million IRS Homepage hits during the 1998 filing, nearly triple the 117 million hits during the 1997 filing season.
Taxpayers can now ask tax law questions and other questions via E-mail.
Expanded Electronic Filing -- The IRS is making it easier for people to file their taxes electronically:
E-File -- This filing season as 18.5 million taxpayers filed by computer, up 29 percent over last year.
Filing by phone through TeleFile -- Six million taxpayers filed by telephone this filing season, an increase of 27 percent compared to last year. The typical call takes ten minutes.
Electronic Payments -- Nearly two million businesses choose electronic payment. Seventy cents of every federal tax dollar now arrives electronically through the Electronic Federal Tax Payment System (EFTPS).
Expanded Walk-In Hours -- The IRS has now instituted Saturday morning hours during tax season to make it more convenient for taxpayers to get their questions answered.
Expanded Efforts to Solve Taxpayer Problems -- The IRS has instituted special days at convenient times for people to get their problems solved.
Problem Solving Days -- 27,000 taxpayers have taken advantage of the this innovative program since it began in November, 1997. IRS representatives sit down face-to-face with taxpayers and help them with their particular problem.
Problem Prevention Days -- A new program of one-on-one service provided to taxpayers while they are preparing their returns helps to prevent problems.
A new toll-free number -- Starting in the 1999 filing season, IRS will have a special toll-free 800-number, the Problem Resolution Program, which taxpayers can call when problems become too complicated and time-consuming.
Citizen Advocacy Panels -- To provide taxpayers with an independent voice, the President called for the creation of Citizen Advocacy Panels throughout the country. The first panel was launched in South Florida last month, and consists of 11 citizens, including a police officer, a small businessman, a teacher, and a retired Fortune 500 executive. The panel will provide area citizens with an independent monitoring of the quality of IRS customer service and make recommendations to improve that service. In 1999, the Administration will expand this program to include three additional Citizen Advocacy Panels.
Increased Support for Small Businesses -- A series of initiatives are ongoing to improve service to small businesses:
Special Small Business Problem Solving Days began on May 16, 1998.
Small businesses will file 700,000 quarterly employment tax returns by phone this year using TeleFile.
Next year, small businesses will be able to file their employment taxes by computer.
A new "Small Business Lab" has been created in Seattle to develop better ways to serve small businesses. For 1999, the Lab's work will include testing a full-service "Small Business Phone Center" and educating small business owners regarding employment tax filing requirements and how to avoid potential fines and penalties.
Putting Notices in Simple and Understandable Language -- The IRS has begun an effort to rewrite the notices most frequently received by taxpayers, like those for late payments, missing information, or mathematical errors. Drafts of these rewritten notices are being tested with focus groups of individuals and small business owners. Millions of taxpayers will reap the benefits of this effort in 1999.