Increased funding will bring long-denied and long-needed "modernized, resilient and secure" operations to the Internal Revenue Service, according to the
"The bar for IRS performance is continually being raised as taxpayers experience new technologies in their personal lives that deliver on-demand, seamless customer experiences," the report reads. Still, "besides fluctuations in the timing or amount of funding, the implementation of the IRS modernization plan and projects can be affected by other factors … The Inflation Reduction Act was largely partisan legislation, which may foreshadow a lack of broader long-term bipartisan support necessary to sustain the IRS's objectives."
"Congressional understanding of and confidence in IRS modernization plans seems spotty," the report adds.
The 2022 report includes recommendations on 21 issues, including:
- IRS business and information technology modernization.
- Reduction in the electronic filing threshold for information return filers. IRSAC recommends safe harbor relief for 2022 returns for businesses that demonstrate a good faith effort to comply with the electronic filing requirements and encourages the IRS to approve filers that request a waiver from e-filing.
- Alignment of electronic signature requirements on withholding certificates.
- Accelerated issuance of IRS
Form 6166 , "Certification of U.S. Residency." - • The redesign and updating of Form Series 8038, including consolidation of the 8038 and the 8038-G into one information return and increasing the threshold amount for the 8038-GC.
- Business Master File Transcript Delivery Service. The key barrier to any expansion seems to be the lack of stable, multi-year funding, but the IRSAC believes the expansion of the TDS's ability to deliver BMF transcripts should be considered part of the IRS modernization plans and funded accordingly.
The IRSAC is a federal advisory committee that provides a public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. Members come from the public, the tax professional community, representatives of the low-income community, business, tax-exempt and government entities, the payroll industry and academia.
