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IRS Considers Online Filing Of Offers In Compromise

by Mike Godfrey,, Washington

13 September 2016

The Treasury Inspector General for Tax Administration (TIGTA), in a recently released report, has disclosed that the US Internal Revenue Service (IRS) has agreed to consider "alternative and cost-effective delivery methods that would provide electronic access to Offer in Compromise (OIC) files."

The US tax code requires the IRS to provide public access to information about accepted OICs. TIGTA noted that, although the IRS now accepts 20 times more OICs than it did when the offers first became subject to public inspection in the 1950s, the program continues to rely on labor-intensive procedures to store the files in a decentralized, paper-based system.

Once an OIC is accepted, the IRS creates a hard-copy public inspection file that is shipped to one of seven locations around the country based on the taxpayer's geographical residence. To view the files, individuals must call the IRS in advance and request an appointment.

The files need to be properly redacted or there is a risk that sensitive taxpayer information could be the subject of unauthorized disclosure and taxpayers could suffer identity theft. However, during its initial review, TIGTA said that "the OIC public inspection program did not have adequate management oversight or sufficient internal controls to ensure that the IRS complied with federal regulations, achieved program objectives, or adequately protected sensitive taxpayer information from potential disclosure."

In addition, it added that "the IRS had not evaluated options to modernize its delivery method to meet shifting taxpayer preferences, improve access to information, and better protect sensitive information. We have identified several improvements that could enhance the efficiency and effectiveness of the program."

In particular, it was suggested that "the IRS should consider the feasibility of creating an online public website that provides access to all accepted OIC files while ensuring that sensitive information is properly redacted." The IRS accepted TIGTA's recommendation.

During the course of TIGTA's review, the IRS immediately began to "update written procedures related to the public inspection files, expand the use of automated redaction tools, and evaluate alternative file storage methods."

TAGS: individuals | compliance | tax | tax compliance | law | Internal Revenue Service (IRS) | tax authority | internet | United States | regulation | individual income tax | Tax

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