IRS Restructuring, Backlogs and Changes Ring in Challenges to the New Year
The year 2001 marks a significant change at the IRS. Massive restructuring coupled with a huge backlog of Offers in Compromise present unique challenges as tax season begins. IRS representatives met Nov. 15, 2000 with CalCPA Committee on Taxation members at their annual liaison meeting to explain these changes and to describe the new face of the IRS.
Offers in compromise
A hot topic at the meeting concerned the length of time it takes the IRS to complete an OIC. IRS representatives noted that there is a huge backlog in processing QICs, due partly to incomplete requests being sent in as well as the program's popularity.
"We are looking into streamlining the procedure in order to close some of the cases," said Terry Franklin, area manager of the Small Business/Self-Employed Compliance Area 16. "This is an extremely popular program and in the future these operations will be centralized at a few locations within the U.S."
IRS representatives noted that California lays claim to 20 percent of the national inventory of OICs adding that, until recently, 70 percent were completed by practitioners. Now, many more OICs are submitted by individual taxpayers and small business bookkeepers, which results in more errors, requiring more processing time.
Peggy Rule, area manager of the SB/SE Compliance Area 13, said that the IRS is analyzing the process to see what steps can be eliminated, adding that presently a simple offer should be completed within one year.
The IRS encourages anyone with questions about OICs, particularly non-practitioners, to attend an IRS OIC workshop.
The IRS is now structured around four new operating divisions. The largest, Wage and Investment, represents about 88 million taxpayers. Small Business/Self-Employed is second, representing about 45 million. The Tax-Exempt/Government Entities Division represents about 2.4 million and the smallest new division is Large and Mid-size Business, representing about 210,000.
The IRS has assigned new management titles as part of the restructuring. Starting in October 2000, the district director function, which used to receive certain elections or forms filed by taxpayers, has been replaced. Now, for the SB/SE Division, the area director is equivalent to the district director. In the Large and Mid-size Business Division, the field director of operations for a specific industry will be equivalent to the...