Drake Software blog for tax pros, covering tax, IRS news, and more

IRS Welcomes Feedback Concerning New Real-Time Tax System

IRS Welcomes Feedback Concerning New Real-Time Tax System

The IRS is hoping to implement a new real-time tax system (RTTS) they believe, according to IRS Commissioner Doug Shulman, will help improve the tax filing process in such a way that it will not only reduce burden for taxpayers but improve overall compliance as well.  And though this new system will require a series of long-term changes, the IRS is currently welcoming feedback they believe will help make the new system a success. 

Currently, the IRS follows a “look back” model of compliance.  With this method, the IRS compares third-party information it receives with that submitted on a tax return, often after the return has already been accepted.  And because of this “look back” process, it’s not uncommon for a taxpayer to receive a notice of discrepancy from the IRS 12 to 18 months after their return has been filed and accepted.  This after-the-fact compliance approach creates frustration for both taxpayers and the IRS.  A new RTTS, however, will allow the IRS to match records upfront, when a return is originally filed, and therefore provide taxpayers the opportunity to correct the tax return so that it matches IRS records before it’s accepted.

In order to provide a medium for stakeholders such as consumer groups, software developers, government representatives, and many others to provide comments and insight about a new RTTS, the IRS is hosting a series of public meetings.  The first meeting was held on December 8, with a second meeting planned for early next year.  Specifics about the date, time, and location for the next meeting will be available at www.IRS.gov once details are finalized.

Drake Software Blog Team

The Drake Software Blog Team is proud to cover the latest in tax-industry-related news, from tax law and IRS updates to technology and business strategies. If you have questions about an article or just want to reach out to our staff, email comments@taxingsubjects.com.