TEI-IRS Mid-States Region liaison meeting.

• Position: January 23, 1997 meeting

On January 23, 1997, representatives of TEI's Region VII and Region VIII, plus TEI Executive Michael J. Murphy, held the Institute's annual liaison meeting with officials from the Internal Revenue Service's Mid-States Region. The minutes of the meeting, which were prepared by David L. Bernard (TEI's Vice President-Region VII), are reprinted below.

Welcoming Remarks

On behalf of the Internal Revenue Service, Regional Commissioner Gary Booth welcomed TEI to Dallas. He said that TEI liaison meetings afforded the region a good opportunity for both TEI and the IRS to take stock of their relationship and to discuss many issues of common concern. He then commented briefly on the impending resignation of Margaret M. Richardson as Commissioner at the end of filing season. He noted that Treasury Secretary Rubin has suggested that the Commissioner's replacement may be an individual with broad business management skills as opposed to being a tax lawyer or accountant (as traditionally been the case.)

Mr. Booth also discussed the following: (1) tax simplification; (2) the IRS's Tele-File service, pursuant to which 26 million individuals are eligible to file returns by phone (he encouraged major corporations to support this initiative); (3) the National Commission on Restructuring the IRS, which is studying the practices and procedures of the IRS (Mr. Booth said the IRS hopes to achieve funding stability as a result of the Commission's report, which is due this summer): (4) the effect of budget constraints on the IRS, including a hiring freeze, restricted travel, outsourcing, early retirements, "buyouts," and outplacement services (the IRS is making contingency plans for a reduction in force, which -- if it occurs -- will be the first in agency's history).

With respect to the recent realignment of the Appeals organization, Mr. Booth reported that Thomas Kuntz, Regional Director of Appeals, will report to National Director of Appeals who will report to Deputy Commissioner. (Previously, Mr. Kuntz reported to the Regional Commissioner.) Mr. Booth explained that the realignment was effected to formally separate of Appeals from the Compliance function and, hence, to underscore Appeals' independence.

Mr. Booth concluded his opening remarks by thanking TEI for the excellent support and cooperation the chapters, regions, and national organization had given to the Mid-States Region.

On behalf of TEI, Michael Murphy thanked Mr. Booth and the other IRS officials for meeting with the Institute. He emphasized the importance of regional liaison meetings to TEI's mission of improving tax administration (a goal TEI shares with the IRS) and serving its members by raising issues of common concern and keeping them informed important developments.

Mr. Murphy next reported that the Institute's President, James R. Murray of PacifiCorp, has testified recently before the National Commission on Restructuring the IRS. He said that the testimony expressed not only the Institute's views on the causes of tax law complexity (and its recommendations for improvement), but also supportive comments on the IRS's Coordinated Examination Program. Mr. Murphy added that the Institute had decried the unprecedented "IRS bashing" that had occurred in recent years. He concluded by noting that TEI had supported the centralization of Appeals and recognized that enhancing communication between the IRS and taxpayers is "a two-way street."

Dale F. Hart, the region's Chief Compliance Officer, reported on the status of the IRS's realignment and consolidation. He stated that transition had gone well and is nearly complete at all levels. He also comments on the effect of recent resource cutbacks, observing that the reductions had been difficult to absorb, but said the IRS remains committed to devoting sufficient resources to the CEP program. Indeed, engineers and economists are being hired, he said.

Mr. Hart said that the IRS wants to encourage joint planning of examinations. He said that bringing taxpayers into the planning process will enable the IRS to complete audits on a more timely basis and thereby enhance currency. Finally, he reported on several management initiatives to resolve issues, including Accelerated Issue Resolution (AIR), pre-filing determinations, early referrals to Appeals, advanced pricing agreements, and expansion of Examination settlement authority. He said that TEI and the IRS share a common goal: resolution of issues at the earliest possible stage.

Thomas T. Kuntz, Regional Director of Appeals, also discussed the recent decision to centralize Appeals. He stated that the change is expected to have "little impact" managerially on the region. Appeals will continue to interact with the regional Compliance personnel, seeking improvements. He made reference to "Case Quality of Process Review" reports, which set forth...