IMRS Industry Issues Quarterly Report - September 2011
Issue Management Resolution System - Turning issues into answers
The Issue Management Resolution System (IMRS) was designed to capture, develop, and respond to stakeholder issues and to identify nationwide trends in the reporting, filing, and paying requirements that may indicate a need to change IRS processes or procedures.
This report provides quick synopses of some of the issues raised by or of interest to our industry stakeholders. Stakeholders should forward significant issues regarding IRS policies, practices and issues to their Stakeholder Liaison (SL) Local Contacts
IMRS Issue 10-0001303 – Incorrect processing of Form 943 deposit record
Issue: The taxpayer is a Form 943 depositor, with a tax liability below $50,000 every year. Although he completes Form 943 listing the monthly record of tax liability as instructed, he has consistently received notices to file F 943-A, Agricultural Employer's Record of Federal Tax Liability. When he calls the IRS, he is advised that there is no record of a tax liability in the system. He is concerned that the monthly record of tax liability as shown on the return is being overlooked when the return is processed.
Response: We have reviewed the returns in question and determined that an error was made during processing. The information on line 17 was overlooked during transcription and this resulted in issuance of Notice 207. This notice instructs taxpayers to submit a completed Form 943-A if they wish to appeal the proposed penalty amount. This instruction is the same for monthly schedule depositors or semi-weekly schedule depositors. The notice asks monthly schedule depositors to complete the F 943-A rather than the monthly schedule on line 17 because the campus may interpret the receipt of a completed monthly schedule as an amended return.
We apologize for the inconvenience caused and have taken corrective actions to minimize future processing errors of Form 943.
IMRS Issue 10-0001316 – Request for listing of active servicewide surveys
Issue: An internal stakeholder recommended a new landing page on IRS.gov for all active Servicewide customer satisfaction surveys. A single point of control identifying surveys for both internal and external stakeholders will provide a resource to verify the authenticity of the survey.
Response: The IRS conducts customer satisfaction surveys by telephone, by mail and online to capture taxpayer and tax practitioner opinions and suggestions for improving our products and services. The surveys are administered by contractors who have passed a rigid security screening process to maintain respondent confidentiality. An IRS survey will never ask for personal information like a Social Security number, taxpayer identification number or any credit card or bank information, but respondents still question whether surveys are phishing schemes.
As a result of the IMRS issue, a new page that provides a listing of current and recent IRS sponsored surveys was created on IRS.gov and there is a process to make sure the page is maintained. Respondents can now search “ customer satisfaction surveys” if they question the authenticity of a survey. Future survey letters will direct respondents to the new page on IRS.gov.
IMRS Issue 11-0001465 – Collection action in Trust Fund Recovery Penalty cases
Issue: When the Trust Fund Recovery penalty is assessed against an individual for unpaid corporate payroll taxes, the IRS should make it easier for the corporation to enter into an installment agreement to address both the corporate and individual taxpayers. The IRS representative handling the corporate case should be able to suspend collection on the individual while the corporation is resolving the matter. In addition, when an installment agreement is entered into with the corporation, there should be an automatic hold on collection against the individual – unless the company defaults.
Response: The IRS does have procedures in place and can withhold collection of the assessed Trust Fund Recovery penalty while the business is paying via an installment agreement. The IRS may decide to withhold the assertion or collection of the TFRP while the business is attempting to resolve the liability through another method, such as an installment agreement. The specific facts and circumstances surrounding each case (both the business and the individual officer(s)) would determine the actions that the IRS takes.
IMRS Issue 11-0001484 – Erroneous Making Work Pay Credit refunds
Issue: Schedule C and F filers incorrectly received math error notices (CP11 or CP11M). The IRS changed the original returns and issued erroneous refunds for the Making Work Pay Credit. The specific situations reported involved taxpayers who filed Schedule C or F, reported a loss and used the optional method of calculating self-employment tax.
Response: The computation of earned income for the Making Work Pay Credit is done manually by tax examiners when a loss is present on Schedule C or F. Submission Processing procedures require tax examiners to manually determine the Making Work Pay Credit by using the Earned Income Worksheet (Line 1a on page M-2 of the 2010 Instructions for Schedule M) to compute the amount for line 1a and enter the manually computed Making Work Pay Credit amount in the field designated for line 63. Tax examiners in the Error Resolution program did not follow the procedures in IRM 3.12.3, resulting in the erroneous math error notices. We apologize for the inconvenience to the taxpayers.