Accepting electronic signatures, improving online accounts and providing more videoconferencing for tax matters are three areas the Internal Revenue Service should consider, Collins wrote.
"As the IRS takes stock of lessons learned from this experience, one lesson is obvious: improvement of the technology capabilities of the IRS is critical," Collins said. "It is not a small or inexpensive task, but it is imperative for proper tax administration."
The pandemic forced the IRS to curtail customer services by closing call centers, Taxpayer Assistance Centers and paper processing centers, Collins wrote. To adapt, the IRS encouraged taxpayers to use digital options such as videoconferencing, she said.
But "[t]he closures required by the COVID-19 pandemic and the subsequent challenges exposed critical shortcomings in IRS technology impacting many functions within the IRS," she wrote.
A representative of the House Ways and Means Committee told Law360 that IRS modernization is a priority for the committee. Ways and Means, the representative said, will build on the Taxpayer First Act
, which was enacted last year and was intended to make a host of administrative IRS changes to improve customer service and technology and overhaul the agency's appeals process.The IRS can improve its digital delivery of services by boosting its technology in three areas, Collins said. The agency should accept more documents digitally, as well as digital signatures, she said. The IRS worked around office closures by issuing temporary guidance in March to electronically accept some documents through 2020, she said. It also accepted digital signatures, she said.
The new policies were well-received by practitioners and placed the IRS in line with private financial institutions, Collins said. Going forward, the IRS should accept electronic signatures on "virtually every document that requires a signature" and expand its use of digital communications on a permanent basis, she said.
The IRS also should expand online accounts for taxpayers and professionals, Collins said. Some taxpayers cannot satisfy the authentication requirements of online accounts, she said. In July, only half of the users who tried to register for an online account passed the agency's e-authentication requirements, she said. The IRS should find ways to make the accounts easier for taxpayers to use while maintaining its standards for keeping them secure, she said.
The IRS is developing an online tool for practitioners, TaxPro, Collins said, but it will not have its full complement of features for "many years" due to lack of funding. The program will allow tax professionals to file documents such as power of attorney forms by the next fiscal year, but will not allow online review of a client's tax returns until a later date, she told Law360 on Tuesday. Congress should appropriate more money to fully develop TaxPro, she said.
Lastly, the IRS should expand its videoconferencing options for as many taxpayer functions as possible, Collins said. Videoconferencing fills gaps in services for rural taxpayers who cannot travel for a face-to-face meeting, she said. Even urban taxpayers may find a video meeting more convenient than a sit-down, she added. The IRS could expand videoconferencing to local post offices, community centers, or Volunteer Income Tax Assistance sites, she said. The IRS is exploring these options and should continue, she said.
"It is incumbent upon Congress to fund the technological upgrades the IRS requires to provide an enhanced level of service and improve its overall operations," Collins said.
Collins told Law360 that she does not know how much Congress should specifically allot for the IRS to make digital upgrades. "I suspect it is big," she said in a telephone interview Tuesday. "It is truly a commitment."
The IRS did not respond to requests for comment.
The Senate Finance Committee did not respond to requests for comment.
--Editing by Joyce Laskowski.
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