Topics Include an Update on the New Tax Pro Account Release and a Spotlight on Criminal Investigation Programs
As reported by Tax Chair, Stephen Mankowski, CPA, CGMA, who recently attended the monthly IRS Meeting.
Tax Pro Account
Thanks to COVID, the IRS accelerated its release of the Tax Pro Account. While the first release was anticipated for Q3 2022, the IRS is now looking at Q3 2021. With the upcoming release, the forms will automatically be entered into the Centralized Authorization File (CAF), as long as the data matches the IRS’s records. Tax Pro Account features real-time processing while entering data—the system will identify information that needs to be corrected on the spot. The Tax Pro Account will logistically live behind the e-Services login.
Version 1 is a Minimal Viable Product (MVP) and was funded by budget money received in the spring of last year. The first step to implementation was the online authorization form—the ability to establish a Power of Attorney (POA) and Tax Information Authorization (TIA). Under this new release, only the tax pro will be able to initiate a request, although the taxpayer may be able to create one at a later date. This release applies to individual accounts (86% of requests). There are additional issues to address related to business accounts, including if the person is truly authorized to represent the company.
This release is only for representatives with codes of A, B, G & R, as they represent the largest portion of taxpayers. Other codes will be added in the future. Also, multiple representatives will be able to be added via the IRS’s Taxpayer Digital Communication (TDC) program, just in a slightly different manner.
Criminal Investigation (CI) Programs & Priorities
IRS Criminal Investigation serves the American public by investigating potential criminal violations of IRC and financial crimes, such as money laundering, perjury, and aiding & assisting. The CI serves a distinct role as a reminder of non-compliance to the tax codes. Working closely with the Department of Justice and U.S. Attorney’s Office, they are the only U.S. law organization to investigate tax crimes and financial crimes. While they rely upon collaboration inside of the tax arena, they also rely on referrals outside of the public arena. They are a significant law enforcement agency with the same authority as the FBI, just focused on financial cases. Their conviction rates remain among highest in law enforcement—92% historically—and even higher (95-96%) for tax cases.
The organization is comprised of about 3000 employees spread among 31 field offices. 2100 are sworn enforcement officers with the balance being analysts. They have a worldwide presence with 11 foreign posts—over 20 people are posted overseas at any time. As impressive as this is, they are only a small part of the overall IRS (2.5%). They initially train at a U.S. federal training academy and continue their education throughout their entire career. The first three months of training are very similar to a police academy; the next three are how they work through investigations.
Their number one priority is to pursue significant tax crime investigations within a wide range of programs. There are currently 11 different program types, including general fraud, cybersecurity crimes, and identification theft. 75% is tax related, 12% is narcotics, and the balance are other areas.
Hiring is also a major priority within CI. They have a mandatory retirement age of 57. They are on track to hire between 240 & 280 special agents. Their biggest challenge, with all of the data they collect and have legal access to, is making sure that they use it in the best fashion.
CI is also working on COVID-related fraud. To solve these cases, they conduct virtual interviews, as well as in-person ones with all of the necessary PPE. Timely prosecution of the cases is vital, even though it may take a considerable time to develop. There are hundreds of cases related to COVID fraud.IRS FY 2022-26 Strategic Plan
Each agency is required to submit a new strategic plan by the next February following a new President being inaugurated. The need for digitalization and addressing an aging workforce are some of the major issues to be included in the IRS’s Strategic Plan, so stay tuned for more on this at a later date.
Look for my next IRS Update Report toward the end of May.
The National Conference of CPA Practitioners (NCCPAP) is a professional organization comprised of Certified Public Accountants practicing in the United States. In addition to serving as a forum for education, networking, and community impact, NCCPAP also advocates for its clients. NCCPAP influences tax administration and tax policy by regularly meeting with Internal Revenue Service representatives, state taxing authorities, and elected officials. NCCPAP members represent over one million businesses and individual clients. The organization is headquartered in Woodbury, NY. For more information visit, www.NCCPAP.org.