June 29, 2022
Oregon Practitioner Liaison Meeting
Virtual Meeting (MS Teams)

9:00 AM-11:00 AM

Attendees: 

Internal Revenue Service

• John Blakeman, Stakeholder Liaison 
• Cathye Mason, Stakeholder Liaison
• Kristen Hoiby, Stakeholder Liaison
• Frank Tisby, Collection - ACS
• Nick Warner, Criminal Investigation

State of Oregon

• Robert Oakes, Oregon Department of Revenue

Practitioner Representatives

• Daniel Stearns, ORSEA
• Carol Wild, OATC
• Michael Davidson, ORSEA
• Dale Marino, OATC
• Doug Henne, OSCPA
• Heather Jackson, OSCPA
• Harriet Strothers, OSCPA

Meeting Summary

Frank Tisby, Program Manager, Collection – ACS,

Frank is the Program Manager for the Denver ACS Call Site, and Frank understands that long wait times on the phone are frustrating! In fact, he shared a personal ‘had to wait all day on hold’ story of his own with Housing and Urban Development (HUD). In order to help mitigate wait times Collection has developed some online alternatives in the form of Text Chat and Voice and Chat Bots.

Text Chat was the first of these options, and has been around since 2017. Text chat uses a live assistor to communicate with the taxpayer. Text chat is offered to a sample of people while searching IRS.gov. The assistor will use their computer to communicate via text chat with the caller. The average time to connect was about 32 seconds, and the average ‘handle’ time [how much time spent with taxpayer on the questions] was about 6 ½ minutes for Unauthenticated participants, and 24 ½ minutes for Authenticated participants. Authenticated participants have verified their identity with the assistor, and account related questions can be answered. Unauthenticated participants have not verified their identity with the assistor, and only questions of a more general nature will be answered [where to mail things, etc.].  There have been about 1.4 million interactions using Text Chat since it went live in 2017.

Voice Bots are software powered by AI [Artificial Intelligence]. Unauthenticated [i.e. the taxpayer has not verified their identity] Chat Bots started up in December of 2021 and Unauthenticated Voice Bots in January of 2022. The Bots are designed to handle the most basic of Collection concerns, which will allow assistors to handle more complex questions. Both Chat and Voice Bots communicate in English and Spanish, to help ensure continued services to taxpayers who speak limited English.

Unauthenticated Voice Bots are available now on Accounts Management and ACS toll free help lines, and will answer things such as notice clarification, FAQs, one-time payments, etc. Later in 2022 we plan to launch Authenticated Voice Bots. Authenticated Voice Bots will initially only be available to individual taxpayers, and will be able to assist with setting up payment plans, payment and payoff information, request transcripts, etc.

Here's a few Chat Bot stats that you may find interesting:

348,800 interactions since January 2022, of those 21,000 were just last week. Of that 21,000…42% resolved their questions via self service alone, 43% chose to escalate the question to a live person, and about 15-16% chose to end the session [hung up, so to speak]. These are very encouraging numbers.

The Chat and Voice Bots aim to really help free up the live telephone assistors to work more complex Collection questions. The fact is that the two largest ‘buckets’ of questions that come in to IRS involve either questions about refunds, or people trying to negotiate a payment. Voice and Chat Bots are ideally suited for this task, acting as a customer service ‘first responder’, quickly filling requests and answering questions for general information. This helps customers quickly get their questions answered and avoid long wait times, and lets our phone assistors focus on more complex interactions.

Nick Warner, Supervisory Special Agent, Criminal Investigation,

CI is hiring! Their employee ranks have also been experiencing a lot of attrition. A full complement of agents nationwide would run about 3000 people, and they are down to about 1800. There is a big push to hire around 500 new Agents this year, and hopefully about 700 next year. You can go to USAJobs.gov and see the job posting as it will be there until the end of the year. Anyone under 37 with accounting experience is encouraged to at least consider applying!

Criminal Investigation is also exploring partnering with outside stakeholders in certain cash-intensive businesses. This ‘Human Source Development’ looks to develop sources that may have knowledge about potentially suspicious financial operations or fraud across a variety of industries, including cash intensive operations, return preparation, or contract labor, to name a few. The idea is to stay on top of trends and new developments or other shenanigans that could lead to trouble down the road.

Scams are always an issue, as fraudsters never seem to take a break. The top scams are all COVID related, and there are ERC [Employee Retention Credit] scams now too. If you spot something untoward, both Nick and his cohort Adam Jobes would appreciate hearing from you: Adam Jobes, Adam.Jobes@ci.irs.gov and Nick Warner, Nicholas.Warner@ci.irs.gov

Criminal Investigation will do recruiting events, if you know someone with the need for that, and they will also do outreach, especially on the topics of tax fraud and cryptocurrency.

From Laura Kardokus and OBTP

Laura and Howard could not be here today, but we do have some information to include here.

The number of licenses issued did drop from about this time last year, so as of May 31, 2022 we are down 87 LTP licenses and 88 Consultant Licenses from April 30, 2021.

The following is from Howard, who will be moving out of his position as Director and onto new challenges;

It has been a tremendous honor and highlight of my career to serve as the Board’s executive director the past seven years. Everyone, from Board members and staff to practitioners and the general public, has been supportive and open to new ideas since my first day. I will definitely miss working with and for all of you as I transition to new challenges and new opportunities.

The operational side of the Board has changed (and I hope improved) significantly since June 2015. With the leadership and guidance of the Board, we accomplished the following:

• Deployed online license renewals
• Transitioned to computer-based licensing exams
• Implemented a modern, web-based licensing database for less than $10,000
• Eliminated a two-year backlog of compliance cases
• Increased pass rates on all three licensing exams
• Reduced annual operating costs by more than 20 percent
• Processed paper applications within two days of receipt
• Collected more than $747,000 in civil penalties
• Waived and modified rules to extend license expirations and permit practitioners to work remotely during COVID
• Operated as a model for other boards and state agencies
• Provided excellent customer service

Yet, there is always more than can be done. Some of the challenges the Board will likely face over the next few years include:

• Declining number of licensees (which translates into less revenue)
• Increasing costs due to rising inflation
• Adopting permanent rules to address remote tax preparation and supervision
• Identifying and preventing unlicensed preparers
• Serving and protecting non-English-speaking individuals
• Maintaining productive relationships with external stakeholders and strategic partners, such as the IRS and Department of Revenue.

The Board will celebrate its 50^th year of protecting Oregon consumers in 2023. That is an achievement that no other state even comes close to matching. You can be proud of the Board’s legacy and its commitment to build on this success over the next 50 years.

Thank you for a wonderful seven years,

Howard

John Blakeman and Cathye Mason, Stakeholder Liaisons

Monitoring EFIN, PTIN, and CAF numbers

One of the things we do in SL is monitor a public facing phone line and email box. We get all manner of questions in there, but they are also where the data breaches come in. There were a handful of data breaches in our area in May, so now would be a good time to remind folks that it is important to keep an eye on the activity of your professional numbers, and what to do when you spot fraud.

But before we get started, I just want to say it is important to get multi-factor authentication going in your office…where you need both a password and the text code sent to a cell phone to sign into your work computer/applications. I have yet to hear of a data breach happening in an office that genuinely used multi-factor authentication.

Today’s cybercriminals are very knowledgeable about the tax administration process as well as adept at using sophisticated tactics to steal the identities of both tax preparers and tax professionals. So they are not just looking for SSNs…they want ALL YOUR INFO. Because the more they have, the more it looks like that fraudulent return actually came from a bona fide preparer’s office.

Identity thieves will use a stolen CAF number to obtain transcripts, and is one of the reasons we now ask for additional identity verification on Practitioner Priority Service.

Similarly, the rise in data thefts and stolen CAF numbers is why we moved to redact tax transcripts. Using stolen CAF numbers and attempting to get tax transcripts is the latest trend we’re seeing. Stolen transcripts help thieves create fraudulent tax returns that might bypass our filters so this is especially dangerous.

The IRS has taken a number of steps. But we need your help. We are asking that you enhance your monitoring of these numbers to help look for signs of identity theft. Check your numbers, and if they seem out of whack, call the e-Help desk at 800-255-0654. And tell your SL too!

Spotting tax avoidance schemes:

There are also preparers out there willing to skirt the rules for a few extra bucks. For example, some unscrupulous tax professionals will “share” one taxpayer’s qualifying child or children with another taxpayer in order to allow both to claim the Earned Income Tax Credit (EITC). For example, if one client has six children, that client only needs the first three children for EITC purposes to get the maximum credit. The preparer will list the first three children on the first taxpayer’s return, and list the other three children on another return. The preparer and the client “selling” the dependents split a fee. The IRS prosecutes the preparers of these fraudulent claims, and the participating taxpayers could be subject to civil and/or criminal penalties as well. If you are hearing anything like this it would be a good time to send an email to Nick or Adam in CI [see above].

We have a publication on IRS.gov that helps explain illegal tax avoidance schemes. It is Publication 3995, and is available for download on IRS.gov.

Emerging issues mailbox:

There are a few places to report fraud and abuse at the IRS, and one of them is the Emerging Issues mailbox…it is worth mentioning because we have a Service-Wide Team for Emerging Issues that would appreciate help in identifying possible schemes and scams. The team wants to hear from you. If something raises your suspicion, or you hear a conversation about a tax credit that doesn’t exist, whatever the case may be, please send an email to the SB/SE Emerging Issues mailbox: SBSEemergingissue@irs.gov

Report tax fraud webpage:

We also have a ‘go-to’ page on irs.gov just for this titled “How Do You Report Suspected Tax Fraud Activity”. This slide shows the top portion of the webpage – it contains a quick reference chart outlining how to report suspected tax fraud activity in different situations and the various forms used depending on the situation.

For example, Form 3949-A (“Information Referral”) may be submitted if you have evidence that an individual is claiming dependents they are not entitled to, claiming false or exaggerated deductions to reduce their income OR perhaps you have direct knowledge of someone receiving cash or untraceable payments that they did not report on their return.  This is the form you would use to report it to us.

Here is the link: Report Suspected Tax Fraud Activity

Updates from SL:

Of course we know that there are many, many payment options available to help meet our tax obligations…direct pay, electronic funds withdrawal, same day wire, and if you can’t pay it all now, there’s always the payment plan. As our friend Frank has shared today, folks who call ACS may now use the voice bot to set up or modify a payment plan. We do not recommend payment by check as that may take a lengthy time to process to the taxpayer account. To view the many payment options and make a payment online: Payments | Internal Revenue Service (irs.gov)

ITINs:

You must have a need to file a tax return to renew the ITIN, with few exceptions. All Form W-7 applications, including renewals, must include a U.S. federal tax return unless you meet an exception to the filing requirement.  Partners in a partnership and S-Corp shareholders who are resident aliens will meet the exception and must obtain verification from the entity to submit with the ITIN application.

An ITIN may be assigned to an alien dependent from Canada or Mexico if that dependent qualifies a taxpayer for a child or dependent care credit (claimed on Form 2441). The Form 2441 must be attached to Form W-7 along with the U.S. federal tax return. For more information on ITINs please see the following link: Individual Taxpayer Identification Number | Internal Revenue Service (irs.gov)

E-Services Migration to ID.Me:

Sometime this summer or fall (no firm date yet), the IRS plans to migrate the e-Services suite of tax professional online applications and products behind ID.me. These products and applications will be impacted:

• Affordable Care Act (ACA) for Transmitter Control Code (TCC)
• Application Program Interface (API) Client ID Application
• e-File Application
• Information Returns (IR) for TCC
• Income Verification Express Service (IVES) Application
• State Applications (State EFIN and TDS State)
• TIN Matching, including Bulk and Interactive TIN Matching
• Transcript Delivery System (TDS)
• Secure Object Repository (SOR)
• Modernized e-File (MeF)
• ACA Information Returns (AIR)

While e-Services applications won’t use ID.me until this summer or perhaps later, you can get ready for the migration and set up an ID.me account now using Tax Pro Account, Online Account or Get an IP PIN. Remember, ID.Me is independent of any account you have with IRS. It is a “credential” that you have that allows you access to our applications as well as applications at other agencies or institutions that use ID.Me for verification purposes.

A couple of hints-it will work better if your photo ID is “photogenic”-the current version of OR drivers license is not photogenic, but passports generally are. If you don’t have an I-phone, make sure your phone opens links you receive in text messages in a browser, not the message app. That one took Cathye 20 minutes to figure out. The video chat (no selfie required) is probably more straightforward but there could be a significant wait time based on available staffing at ID.Me. From their help site information, it appears they tell you your expected wait time when you select that option. You will also need two forms of ID for the video chat option. The ID.Me help pages are pretty thorough, and we will include the links in your minutes for the meeting.

• Verifying identities using facial recognition -https://help.id.me/hc/en-us/articles/4402761436823-IRS-How-do-I-verify-for-the-IRS-with-self-service-  
• Verifying identities using live chat with ID.me agent https://help.id.me/hc/en-us/articles/4457297927575-IRS-How-do-I-verify-with-a-Video-Chat-Agent-  

Hot off the presses- you can now submit Form 1040NR amended returns electronically, for 2019, 2020 and 2021. You can also, of course, submit amended 1040 and 1040SR returns for 2019, 2020 and 2021.  Best of all, superseding returns can now be submitted electronically using a checkbox option-we are assuming here that the software you use has been or will be updated for the checkbox.  Have fun!

ETAAC report for 2022: https://www.irs.gov/pub/irs-pdf/p3415.pdf

Talk about hot off the presses-this was just issued this morning and I am excited to read through it-sneak preview of recommendations:

• A national campaign to encourage voluntary sign up for IP PIN’s
• Working with the industry (practitioners, software providers, etc.) to improve electronic payroll and 1099 reporting

Robert Oakes, Oregon Department of Revenue,

AG Worker Overtime:

HB 4002 (2022) creates a refundable income or corporate tax credit for eligible agricultural employers who pay overtime wages to their agricultural workers. The tax credit can be taken for six consecutive tax years starting with tax year 2023 and continuing through 2028. The total credit for all taxpayers for any calendar year may not exceed $55 million.

The bill also phases in a 40-hour regular workweek for agricultural workers by 2027. An employer may not require an agricultural worker more hours than the workweek caps for the following time periods without paying overtime:

•        2023 and 2024 – 55 hours in one workweek

•        2025 and 2026 – 48 hours in one workweek

•        2027 and thereafter – 40 hours in one workweek

The bill specifies credit as equal to a percentage of the actual incremental overtime compensation paid to agricultural workers during the calendar year. Specifies varied credit percentages depending on year, number of full-time equivalent employees employed by taxpayer and if employer is engaged in the business of dairying.

Prohibits licensed labor contractors from claiming the credit but allows an eligible employer to claim credit for wages paid to workers by a labor contractor on behalf of the eligible employer.

Requires taxpayer to receive notice of acknowledgement from Department of Revenue prior to claiming the credit. Limits total amount of tax credits allowed as acknowledged in notices to $55 million for all taxpayers for any calendar year. Requires Department of Revenue to proportionately reduce the amount of credits among all taxpayers if necessary due to exceeding annual credit limit.

Requires report on identified economic impacts of the overtime compensation requirements to be submitted to Legislative Assembly no later than November 20, 2026 and every six years thereafter. Specifies contents of report. Requires Department of Agriculture and the Oregon Business Development Department to make recommendations for legislation related to establishing agriculture grant, loan, or lending program.

Both federal and state law establish a maximum hour requirement of 40 hours per week and require employers to pay one and one-half times the worker’s regular rate of pay for all hours worked in excess of the weekly maximum.

Previously, workers in the agriculture industry were exempt from both the state and federal maximum hour and overtime requirements, meaning there was no maximum weekly hour threshold for Oregon's agriculture industry and workers were not entitled to overtime pay. Dairies with not more than 25 full time workers are allowed a credit equal to 100% of overtime paid for 2023-2028.

There are a few other states that have adopted maximum hour and overtime requirements for agricultural workers. Like Oregon, the laws are phased in over time.

California enacted a 2016 measure phasing in maximum daily and weekly overtime requirements for agricultural workers that establish a 40-hour maximum hour requirement in 2022 for employers with 26 or more employees and 2025 for smaller operations.

In a 2020 decision, the Washington Supreme Court ruled a state law exempting agricultural industry employers from paying overtime violated the State Constitution. A law enacted last year will phase in a 40-hour maximum hour and overtime requirement for Washington agricultural workers by 2024.

The measure directs the Department of Administrative Services to include in its biennial economic forecasts any available relevant economic and wage data relating to the agricultural sector in the state. The measure directs the Oregon Employment Department, in consultation with the Bureau of Labor and Industries (BOLI), DOR, and the Oregon Department of Agriculture (ODA), to submit a report, by November 30, 2026 and every six years thereafter, to interim committees of the Legislative Assembly related to agriculture, on the economic impacts of the measure’s overtime compensation requirements.

Here is how the law will work:

DOR to review applications for this credit

DOR provides acknowledgement of the tax credit amount.

If applications are denied, a new appeals process will be created – separate from other DOR appeals.

New forms

New Oregon Administrative Rules – stakeholder outreach

If the total applications for credits exceed $55 million a year, DOR will prorate the credit amounts among applicants.

This would be a new responsibility for DOR, as tax credits are currently approved by the agency with subject matter expertise or access to verifying data (in this case, the Oregon Employment Department). DOR anticipates will create a new unit in PTAC to administer the tax credit.

DOR will also develop a comprehensive communication plan to conduct outreach and provide information to taxpayers subject to the new requirements and tax professionals.

One time assistance payments:

House Bill 4157 directs the Oregon Department of Revenue (DOR) to address negative economic impacts of the COVID-19 public health emergency by providing one-time assistance payments to low-income households who received the Oregon Earned Income Tax Credit (EITC) for the 2020 tax year

If you filed your return by December 31, 2021, you can file an amended return for 2020 by April 15, 2022 to claim the EITC. You will also need to file an amended federal return if you qualified but didn’t claim the federal credit. Taxpayers who miss this deadline will not receive a payment. Information about how to file your amended return is available beginning on Page 35 of the 2021 DOR Publication OR-17 .

Typically, you'll receive this payment using the refund option you selected on your tax return. If you received an advanced refund through your tax service provider, or paid your tax preparation fees using your refund, you'll receive your payment by check in the mail. 

The payments are expected to amount to nearly $150 million, paid from federal pandemic aid approved by Congress in 2021. 

Part-year and nonresident filers will receive a payment if at least one member of the household listed on the return resided in Oregon for at least half of 2020 and continued to reside in Oregon when the 2020 return was filed in 2021. 

And finally, some changes to email addresses..the old ones still work, but here are some new ones:

• Personal and partnership income tax: prac.revenue@dor.oregon.gov .
• Corporate income or excise tax: corp.help.dor@dor.oregon.gov .
• Payroll and business tax: payroll.help.dor@dor.oregon.gov .
• Fiduciary/estate/inheritance tax: estate.help.dor@dor.oregon.gov .
• Special programs: spa.help@dor.oregon.gov .
• Marijuana tax: marijuanatax.dor@dor.oregon.gov .
• Corporate Activity Tax: cattax.questions@dor.oregon.gov .

Question:

Will the One-Time Assistance Payment be reconciled on the 2022 tax return?

Answer:

That is the plan…we intend for it to be on the 2022 tax return so that all who are entitled to it, may take advantage of it.

Next Scheduled Meeting

The next meeting will most likely be January 11, 2023 or thereabouts 😉