September 2001

Brookhaven IRS Prepares for Major Changes

Reorganization and centralization of services throughout the country will alter how local accountants deal with the Internal Revenue Service in the coming months, agency officials said last month during a meeting with accountants.

The New York State Society of CPAs Relations with the IRS Committee met with agency representatives at the IRS for a day-long meeting covering everything from securing checks in local lock-boxes to changes in the Offer in Compromise process.

“We want to help you process things as quickly as possible,” Christine Hicks, an IRS communications specialist who moderated the conference, said. “We want to talk about all the hot topics you’ll be interested in.”

Officials characterized the changes as a work in progress as the IRS looks to add staff, upgrade technology and remove part of the bureaucratic hierarchy to make the service more efficient. The IRS will begin implementing the changes as early as October 1 and continue developing them through the next year and beyond.

“I think they were very forthright in describing what was going on and there was a lot of important information that was disseminated,” said Stephen Buschel, chairman of the Relations with the IRS Committee. “They talked quite candidly about the issues that were of great concern, and I think they’re working very diligently.”

The Brookhaven campus will be one of several in the United States to become a focal point in IRS services, requiring some changes to how the campus handled services in the past. Beginning in October, Brookhaven will only process personal tax returns and not business tax returns, which will be routed to other offices, according to Maureen Libera, chief of the Receipt and Control Branch in Holtsville. Business returns will be handled at the IRS’ Ogden, Utah, and Cincinnati, Ohio, branches.

The news raised concern over steps the IRS would take to safeguard payments in light of the loss of 40,000 checks by one of the IRS lock-box banks earlier this year.

“What happened at Mellon (Bank in Pittsburgh, Pa.) was unique,” said Patty Gonzales, a submission processing representative, who added that no incident like the Mellon Bank snafu had occurred on such a wide scale before. “Analysts are going out to a lot of sites and reviewing lock-box sites.”

Officials added that they try to monitor payment and transshipment of documents 24 hours a day during peak tax–filing periods, and that payments received at Brookhaven will be time-stamped to prevent the IRS from counting returns as late because they are shipped from one agency campus to another.

Shifting the burden of business tax returns away from Brookhaven will allow the campus to take on other large projects. Brookhaven has already geared up to become one of three sites nationwide that will process requests for employer identification numbers (EIN), and officials told the committee the campus would handle 50 percent of the estimated 4.1 million EIN requests the IRS receives annually.

Joyce Marto, chief of EIN centralization, said the IRS plans to hire 300 people to handle those requests by January 2002. Personnel will be on call from 9 a.m. to 6 p.m. local time, working in shifts, and officials assured the professionals that numbers could be issued within four days.

Committee members were at first skeptical that the changes would improve service at all. Accountants said the four-day turnaround for EINs frequently passed into weeks, delaying their clients’ business pursuits because such numbers are necessary to get basic services, such as a commercial checking account. The process is prolonged when clients use their CPA’s office for a C/O address, which requires submission of a power of authority form along with the EIN application.

Accountants suggested that in addition to increased staff, the IRS might consider taking the applications and power of authority forms by fax and contacting the professionals by phone to informally relay the EIN number. The EIN number would then be confirmed through the mail.

“I’m hoping that several executives in attendance will take that idea to the appropriate officials,” Buschel said. “We’ve had some experience where we were really frustrated to get an EIN number.”

Brookhaven will also become the home of a new Centralized Offer in Compromise (COIC) program, which was undertaken to clear a backlog of work, with some cases sitting on the shelf for as long as three years.

“A lot of offices were stuck on these cases and not able to do other services,” Dorothy Owens, chief of the Centralized Offer in Compromise program, said.

The Brookhaven COIC will determine if the request warrants an offer and, if so, assign the case a number. Officials said Brookhaven would handle all COIC files involving wage earners and self-employed individuals, while other cases will be passed on to the territories to be handled by local IRS representatives. A new toll-free number will be available for information on the status of a specific case.

Brookhaven will also become one of the five sites housing a toll-free customer service hotline beginning in January 2002. Customer service representatives will be available from 7:30 a.m. to 5:40 p.m., fielding questions from practitioners who have exhausted other means of resolving an issue.

Finally, the Estate and Gift program will be centralized in Cincinnati beginning in January 2002, where the office will assume the primary responsibility of classification of a case, while Brookhaven will continue to audit the original returns. The new general phone number for the service is (859) 669-5465 and the mailing address is IRS, PO Box 145574, Cincinnati, Ohio, 45350.

Buschel was somewhat optimistic about the plans announced at the meeting with the IRS.