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Enthusiasm for Web Chat, Text Services Outpaces Resources at IRS

Posted on Dec. 9, 2019

After years of talking about it, the IRS in 2020 appears to be taking its first big steps toward text messaging and web chat services for tax professionals who are, if not excited, at least way past ready.

“Any way that improves communications with the tax professional community is something that will be welcomed,” enrolled agent Roger Nemeth, president of Tax Help Software, told Tax Notes.

Tax practitioners are eager to have clearer IRS communications and faster resolutions for their clients, Nemeth said. “We’re clamoring for a solution, but maybe most of us don’t know that [IRS digital communications] is an option,” he added.

While the IRS still doesn’t have any text or chat capabilities for taxpayers generally, Scott Irick, deputy director (examinations), IRS Small Business/Self-Employed Division, said some individuals may be getting the opportunity to use them in 2020. A pilot program, begun with some Schedule A audits a couple of years ago at the IRS’s Philadelphia campus, will expand to all Philadelphia campus operations, offering taxpayers a digital communication option in 2020, Irick said.

In its public report released in November, the IRS Advisory Council placed artificial-intelligence-powered transactional and informational chat tools, along with an employee-powered chat tool, on its priority list for the Wage and Investment Division’s first-year rollout of its customer experience/service delivery plan.

“Taxpayer digital communication for us is secured messaging,” Irick explained at the American Institute of CPAs National Tax Conference in Washington in November. “We don’t like to say it’s an email, but that’s really kind of what it is. It’s an internal message, wherein we will invite taxpayers to conduct their audit from start to finish through secured messaging.”

“The [pilot program] results have been very positive,” Irick said. IRS “employees love it. Taxpayers . . . give it high marks” on customer satisfaction surveys, he noted. The agency’s commitment to expanding digital communications goes all the way to the top of the organizational chart, he added. However, “we would like to expand it much more quickly than we’re going to be able to, from a dollars-and-cents and IT standpoint,” Irick added.

Can You Hear Me Now?

Dollars-and-cents issues are high on the list of concerns that some practitioners have with IRS digital communications.

Irick said the IRS sees great potential in secured messaging for both authenticated and unauthenticated but limited communications with practitioners and taxpayers, and for some specialty tax subjects. Disappointingly, he added, “They’re not progressing as quick as we’d like.”

Nemeth said web chatting “is a good tool. You just to have to make sure there’s someone on the other end of it. . . . It’s got its place, as long as you can staff your response.”

Stephen F. Mankowski, immediate past president of the National Conference of CPA Practitioners (NCCPAP), said the IRS already has a reputation for robbing Peter to pay Paul when it comes to agency staffing. He wondered whether its plans mean there will be fewer assistants available on the phone because staff are diverted to digital communications, saying, “Is the juice worth the squeeze?”

“Text messages seem to get a quicker response than just plain emails,” Mankowski noted. But web chats might involve one IRS employee helping 10 taxpayers simultaneously, he said. “If I don’t have someone’s undivided attention, you increase the chance that they will respond to something in the wrong box,” he said.

Neil Fishman, co-owner of Fishman Associates CPAs, worried that three decades of brain drain and attrition at the IRS might put at risk the quality of advice offered in digital communications. “There is now a lack of experience, a lack of more than just the general knowledge” practitioners need, although training is an addressable concern, he said.

Fishman added, “The primary concern of all of this, especially anything electronic . . . is ‘Am I really dealing with the IRS?’”

But Mankowski said, “That may be the one given in life, that security is going to be paramount in anything [the IRS] does” in digital communications.

Tax Talk Tech

If the IRS is going to implement digital communications in earnest, practitioners told Tax Notes they should be at the head of the line.

Fishman, president of NCCPAP, and Cheri H. Freeh of Hutchinson, Gillahan & Freeh PC recalled hearing talk about IRS text messaging and web chat ideas before their memberships at IRSAC ended in 2017 and 2016, respectively. Nothing was implemented, they said.

“If the IRS wants to get the biggest bang for its buck, it would start with the paid practitioner community,” Freeh said.

Fishman seconded: “The IRS would get more from chatting with tax professionals and knocking out the wrinkles than going to John Q. Public.”

Freeh said an IRS public digital communications program should start small, and learn from similar state outreach programs. Questions and information requests can often be answered without exposing personal identifying or financial information, she noted.

Web chat and secured text messaging could serve as the foundation for an IRS practitioner services division, long a goal of tax professionals, Freeh said. A practitioner services division “could be a logical first point to apply this technology,” she said.

Nemeth said the IRS could also restore applications that once served goals similar to digital communications, such as the electronic account resolution service, which was discontinued in 2013.

“I do think [digital communications] would be useful,” Fishman said, although “anytime we can do something that can expedite resolving a situation for a client would be helpful.”

Clarification, December 10, 2019: Irick’s comments about the IRS’s digital communication pilot program have been updated.

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