AICPA speaks out on tax issues.

• Author: Trompeter, Jean E.
• Position: American Institute of Certified Public Accountants

In recent months, the AICPA Tax Division has voiced its opinions on a number of tax issues, including taxpayer rights, the Taxpayer Advocate's Annual Report to Congress, the IRS budget, and recommendations for restructuring the IRS.

Taxpayer Rights

The AICPA testified on taxpayer rights issues at the Feb. 26,1997 hearing of the National Commission on Restructuring the Internal Revenue Service. In its written testimony, the Institute discussed, and proposed solutions for, over 20 current taxpayer rights issues.

The AICPA recommended that the initial notification of an IRS examination be in writing, that the taxpayer be notified of his right to have a representative appear on his behalf, and that the site of the examination be the place requested by the taxpayer (provided it is reasonable under the circumstances). Further, it recommended that, before proposing an adjustment against a taxpayer, the IRS revenue agent must have determined that the Service has a realistic possibility of success on the issue.

The AICPA also proposed that, if a tax adviser is authorized to practice before the IRS, all information the adviser has regarding tax matters of taxpayers be accorded the same protection of privacy, regardless of the adviser's specific professional classification.

With respect to interest and penalties, the AICPA recommended that proposed regulations be issued to implement comprehensive interest netting in all situations in which the Service currently has the administrative capability to do so; it recommended that in all other situations (as an interim measure), comprehensive netting be required at the request of the taxpayer, provided the taxpayer furnishes the IRS with relevant information and interest computations. The Institute also proposed automatic penalty abatement rules and recommended that detailed interest computations be included with every notice that involves interest due the Service.

In discussing proposals for administrative improvements, the AICPA once again recommended that a third party be allowed to discuss a notice and its related account with the IRS, based on the third party's submission of a personal identification number (PIN) set forth on the notice sent to the taxpayer. Among the other proposals for administrative improvements was the recommendation that the Service strive to communicate its policies more uniformly throughout the organization, and provide specific consequences when an agent or appeals officer...