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DJ IRS Launches Secure E-Mail Pilot Program
Dow Jones Newswires -- November 29, 1999
By Fowler W. Martin
WASHINGTON (Dow Jones)--The U.S. Internal Revenue Service said Monday it will
shortly begin exchanging confidential taxpayer information by encrypted, secure e-mail
with a select group of tax professionals.
The pilot project, scheduled to run through September 2000, is a major stride in the
agency's plans to improve service to taxpayers, boost its own productivity and meet
certain congressionally mandated performance targets.
"This is an important step toward our goal of providing electronic access to account
information for taxpayers as well as tax professionals," said Bob Barr, assistant IRS
commissioner for electronic tax administration.
The new e-mail service was requested by the National Association of Enrolled Agents
(NAEA), a group representing tax professionals licensed to represent taxpayers in their
dealings with the IRS.
Such practitioners currently spend a lot of time communicating with the IRS by telephone
and conventional mail, a time-consuming and often frustrating process.
Switching to e-mail should short-circuit a major part of the work, NAEA executive vice
president Janet Bray said.
Several hundred NAEA members volunteered to take part in the experiment and the IRS
will select 100 of them for the pilot project. Initially, e-mail exchanges will be restricted
mainly to questions, answers and other routine exchanges, but Bray said her
organization hopes the IRS will soon accept powers of attorney by e-mail and supply
transcripts of taxpayer accounts by that method as well.
Tax professionals generally must obtain a power of attorney from a taxpayer and present
it to the IRS before they can act on a taxpayer's behalf. At present, such documents are
usually faxed to the agency and often have to be located before an IRS employee can
begin responding to a particular problem. Attaching electronic versions of such
documents to e-mail could greatly speed up the process, the NAEA believes.
Congress Seeks Increase In Electronic Filings
With respect to transcripts, Barr recently said the IRS is working on a system that would
deliver partial or complete electronic transcripts of taxpayer accounts to authorized
parties within 24 hours. At present, it takes six to eight weeks to get such documents.
The IRS plans on using the new e-mail service and related initiatives currently on the
drawing boards as a means of encouraging taxpayers and their representatives to file
more returns electronically. A significant shift in that direction promises to drastically cuts
the IRS's return processing workload, permitting it to redeploy scarce personnel to other
tasks - better service, or stiffer enforcement, for instance.
At present, taxpayers expecting refunds have a strong incentive to have their returns filed
electronically because they get their money faster that way. Balance-due taxpayers, and
the professionals who often prepare their returns, need different incentives to encourage
them to switch to electronic filing, however.
The incentives are important because Congress wants to see 80% of all returns filed
electronically by 2007. Even more difficult to hit, Barr said, is an interim goal requiring the
IRS to receive electronically 60% of all returns prepared on a computer by 2002.
In order to be selected for the e-mail pilot, NAEA members must be deemed by the IRS
to be "established electronic return filers with a record of high quality performance and
the required system components," an agency press release said. To use the system,
participants must also obtain permission and powers of attorney from clients, the IRS
said.
Test participants can use secure e-mail to request help on notices, account issues or
transcripts for either individual or business taxpayers, the IRS said. E-mail can also be
used to set up installment agreements for taxpayers who can't immediately pay all the tax
they owe, the agency said.
Bray said many NAEA members want to participate in the pilot project because it will
help them quickly adapt to leading edge technologies and because it will help them
market their services. Those participating will presumably be able to promise their
clients quicker resolution of tax problems.
The new service will use a secure communications technology known as Public Key
Infrastructure (PKI) in a system developed for the IRS by VeriSign Inc., of Mountain View,
Calif. Participants will be issued passwords that will allow them to obtain the digital
certificates needed to gain access to a secure IRS web site.
Both questions and answers will take the form of encrypted messages using S/MIME
protocol technology supplied by RSA Security Inc., of San Mateo, Calif., the IRS said.
"It's an incredible advance," said NAEA's Bray.
-By Fowler W. Martin; (202) 862-6616 E-mail skip.martin@dowjones.com |
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