Got a complaint? File it online

The Office of Special Counsel, a small, independent investigative agency, wants to make filing complaints as easy as filing taxes online.

“The user should have a similar experience to using a product such as TurboTax, which walks the user through a series of screens until all the desired information is captured,” according to OSC’s Federal Business Opportunities notice published June 27.

OSC investigates claims of prohibited personnel practices and other violations of the federal merit system. The agency has received a lot of attention lately because of a leak to the media of a report finding General Services Administration Administrator Lurita Doan had violated the Hatch Act.

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Keeping modernization on track

The Internal Revenue Service must replace its aging tax processing systems, but the agency can’t stop running them while it builds replacements. So the IRS builds new systems while it operates the old systems, and it tries to make sure the new systems work with the old.

The job is “like trying to change the engines on a jumbo jet while it’s in flight, and you don’t have a complete set of blueprints to know how the original engine was put together,” said W. Todd Grams, the IRS’ chief information officer from 2003 to 2006.

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2008 budget would boost IRS modernization by $85M

The Bush administration is seeking $282 million to modernize the Internal Revenue Service in his fiscal 2008 proposed budget, an $85 million increase over the fiscal 2007 request.

Modernization is one piece of a three-part strategy for closing the gap between taxes owed and taxes paid. Congressional leaders have discussed how to bring in the taxes owed. Through modernization, the Treasury Department intends to emphasize the other two parts: better taxpayer services and enforcement to eliminate the gap, according to the budget proposal, which was released today.

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Free File opens for early birds

Free File, a tax-filing program, opened today for taxpayers wanting to get an early start on filing season.

The controversial program, in its fifth year, is a free tax preparation and electronic filing initiative between the Internal Revenue Service and the Free File Alliance, which is composed of 20 private-sector tax preparation companies.

Congress and the IRS’ inspector general have criticized the program for excluding taxpayers who once used the program by setting stricter income requirements. Those requirements caused a double-digit percentage drop in usage in 2006.

But the IRS and the alliance have made Free File more consumer-friendly this year, according to the IRS.

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Lawmakers urged to consider expanded mandate for e-filing

The Internal Revenue Service could sharply reduce its tax processing costs if paid tax preparers had to file returns electronically. But not all of them would welcome such a mandate, tax industry observers say.

The Government Accountability Office has recommended that lawmakers require paid tax preparers to file their clients’ tax returns electronically. If they electronically filed 90 percent of those returns, the government would save about $68 million a year on tax processing, according to a report GAO released in November. The “IRS is missing an opportunity to generate additional savings,” wrote GAO.

Cindy Hockenberry, a tax information analyst at the National Association of Tax Professionals, said she recognizes the benefits of mandatory e-filing, which include more accurate tax returns and faster tax refunds.

But she added that commercial tax preparers worry that the cost of upgrading their computer systems and business processes for e-filing would lower their profits and be too time-consuming.

To become authorized providers, tax preparers would need to submit formal applications and undergo fingerprint and background checks. “That’s a lot of hoops to jump through,” Hockenberry said.

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