IRS eyeing Tax Pro Account enhancements for practitioners

Tax professionals may soon be able to upload signed powers of attorney through the IRS Tax Pro Account, and broader access to client account information could follow, National Taxpayer Advocate Erin Collins said Tuesday at the AICPA National Tax Conference.

In a conversation with AICPA chair Jan Lewis, CPA, CGMA, Collins said the IRS is working toward allowing practitioners to submit fully executed paper Forms 2848, Power of Attorney and Declaration of Representative,through the Tax Pro Account and have them processed by the agency.

“One of the things that I believe will be coming soon, so I don’t have a date, is that you can take a paper version [of a power-of-attorney document] that’s filled out,” she said. “These are little things in life that I think will make our lives easier.”

Once everyone has signed it, the tax practitioner could upload it to the Tax Pro Account, she said.

Last week, the IRS announced enhancements to the account related to payments on behalf of business clients.

Practitioners already can obtain authorizations through the account, but the process requires taxpayers to have an IRS online account, limiting its usefulness in some cases. The enhanced functionality would eliminate the need for practitioners to fax or mail signed authorization forms to the IRS. 

Collins said her long-term vision is for practitioners to be able to access client information through a single portal.

“One of the things that I would like … is that as a practitioner, if I have 100 clients and I represent Jan, I could go in, click Jan, and now I can see your online account for the years that I have [power of attorney] for,” Collins said. “So, I can see your transcript, I can see your payments, I can see any letters, correspondence, whatever you’ve received. I should be able to view through Tax Pro. I think that will be huge.”

Amended returns

The IRS is close to significantly reducing processing times for electronically filed amended returns, which now generally take 12 to 14 weeks, Collins said.

“The good news is they’re now saying that they could process them under a week, three business days,” she said. “Yay! Not today, but very soon.”

The change would apply to newly filed amended returns and is part of the IRS’s broader effort to automate processing. Collins said the agency’s technology is largely ready, although existing backlogs remain a challenge.

She also discussed the IRS’s Zero Paper Initiative, under which paper returns are scanned into a digital format and processed as if they had been electronically filed. Collins said the approach is speeding processing but has also created a new challenge — more suspended returns.

In the past, IRS workers who manually transcribed the returns could fix certain problems before the return was filed. Scanning is faster, but it moves returns through the system without changing them.  

“So, it’s good on the front end; it’s happening quicker,” she said. “But now we have more suspended returns that we need to focus and fix on the back end.”

CP53E notices

Collins also addressed concerns about the IRS’s rollout of CP53E notices, which the IRS issued this year to taxpayers who were due refunds but had not provided direct deposit information.

The agency did not adequately prepare taxpayers for the change, leading to confusion when notices arrived before some taxpayers received explanations of adjustments made to their returns, she said.

“They didn’t produce enough information prior to the filing season to really educate people. They didn’t have enough information online, and it just generated a lot of confusion,” Collins said.  

Taxpayers eventually will be able to opt out through their IRS online accounts. Collins said she continues to advocate for a checkbox on the tax return that would allow taxpayers to choose to receive a paper check.

Soft notices

Earlier on Tuesday, Amalia Colbert, commissioner of the IRS Small Business/Self-Employed Division, said the agency plans to expand its use of “soft notices” after seeing strong taxpayer response to the compliance tool.

That’s because taxpayers generally have opened and understood the notices and, in many cases, corrected their accounts after learning they had misunderstood a provision of tax law, she said.

Colbert also said the IRS expects to make greater use of what agency officials now call “superintelligence” to identify noncompliance and direct enforcement resources toward higher-risk cases.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.