Manhattan District Director Discusses IRS Improvements

Offers Updates on E-Filing, Y2K, and Other Issues

By Tara Oolie

Internal Revenue Service Manhattan District Director Charles R. Baugh provided updates on the IRS's electronic filing program and other improvements the agency has made since its restructuring.

Speaking at a January 6 breakfast meeting sponsored by the NYSSCPA Cooperation with Bankers and Other Credit Grantors Committee, Baugh discussed improvements to the IRS's website, the ability for taxpayers to complete their returns more efficiently online, and overall sophisticated technological enhancements that offer opportunities to file by computer, fax, or telephone.

In speaking about the agency's mission, Baugh quoted IRS Commissioner Charles O. Rossotti, who has said, "Our goal is to provide first-class worldwide service."

Baugh predicts that this year alone the IRS will see a 25 percent increase in returns filed electronically by CPAs and other tax professionals on behalf of their clients, and he praised the system.

"Even with 11 million businesses using electronic filing, error rates are at their lowest--less than one half of one percent," he said.

He pointed out that an advantage to filing electronically is the ability for taxpayers to pay their tax bills in installments without penalty as long as they submit the entire amount owed by April 15. For example, if individuals who filed in February still owe additional money, they can have the balance debited from their bank accounts in partial payments through April 15.

Electronic filing also provides benefits to taxpayers due refunds, as they can expect payment from the IRS within 10 days of the receipt of their return.

Baugh said the IRS looks forward to filers now having the option to pay by credit card--American Express, MasterCard, and Discover. The agency will not charge its own user fee but cannot absorb the typical transaction fee usually covered by merchants for accepting credit cards.

Baugh also spoke about the IRS's efforts to address the Y2K problem, and he foresees no imminent disaster. He stressed that for the past year, the IRS has completed many tests to ensure user safety.

"Our tax system will be ready," he said. "We have no other choice, since 1.7 trillion dollars must be collected."

In discussing the IRS's restructuring, Baugh explained that the new organizational structure features four business units: wage and investment income; small businesses and the self-employed; middle market and large corporations; and employee plan, exempt organization, and state and local government. The IRS also now has five industrial teams: financial services; technology and media; food and retail; energy, chemical, and national resources; and manufacturing, construction, and real estate. Each subgroup will have an expert on hand to assist with processing returns, payments, audits, and collection.

Both bankers and CPAs attended the breakfast meeting, one of several events that the Cooperation with Bankers and Other Credit Grantors Committee, chaired by George Kuzma, sponsors to foster the relationship between the banking and accounting communities. For more information, or to be placed on the committee's mailing list, contact NYSSCPA Communications Specialist Tara Oolie at (212) 719-8405, (800) 633-6320, or toolie@nysscpa.org . *