IRS Commissioner Wants To Streamline Tax Process

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IRS Commissioner Douglas Shulman has laid out his vision for changes to the way the agency connects with taxpayers. He says it would streamline the tax-processing system and cut down on the number of times taxpayers have contacts with the IRS. Shulman talks to Renee Montagne about what he's proposing for the future of the IRS.


And individual Americans are also facing a looming deadline - this year's taxes, though that deadline has been extended from today, April 15th, the traditional deadline, to Monday, April 18th. That was made possible because today is the Emancipation Day holiday in Washington, D.C.

The tax filing process hasn't really changed in decades. When I spoke to the commissioner of the Internal Revenue Service, Doug Shulman, he expanded on a speech he gave this week about the agency's future.

Mr. DOUG SHULMAN (IRS Commissioner): Today, much like 50 years ago, you file your return. We, about six months later, actually match that return with information that we have on file, and if you get audited, it's usually going to be about 18 months later.

The vision I laid out is that we get your W-2, your wage information or your 1099, your interest information from a bank earlier, really, before you file your returns. When you file, if that information doesn't match the information we have, we ask you to fix it right there on the spot.

What this means is we actually fix problems upfront and reduce the chances of an audit on the back end. The important thing for people to know is I laid out that vision so we could have a discussion. This isn't something that's going to be implemented this year or next.

MONTAGNE: That vision, as you call it, that has the added charm of making sure that taxpayers don't neglect to pay taxes. Separately, the IRS has renewed a voluntary disclosure program to bring offshore money back to the U.S. Just describe that for us, and how much money has that brought back into federal coffers?

Mr. SHULMAN: We've had a multi-year effort to make sure that people who try to hide money offshore so they don't pay taxes get caught. We had a breakthrough agreement where the first time in history we got 4,000 names turned over to us from the Swiss government, which is a traditional bank secrecy jurisdiction. As we ramped up the pressure, we then said, if you've been hiding money, we're going to give you a last best chance to come in, pay a stiff penalty, but avoid going to jail. We had an overwhelming response to our first initiative. We had 15,000 people come in. Usually we get about a hundred people come in through voluntary disclosure programs.

MONTAGNE: So has this effort yielded hundreds of millions of dollars in tax payments?

Mr. SHULMAN: Oh yeah, we're well above that already. All of our efforts are going to bring in billions of dollars. The more important part of our multi-year campaign to crack down on offshore evasion is that long-term, we're changing the risk calculus and we're trying to get it so people don't even think about hiding assets offshore because the risk is so great.

MONTAGNE: Now, what do you say to Americans, to both individuals and business owners, who see headlines like the ones we've seen just recently that General Electric, huge corporation, did not pay taxes, or paid tiny amount of taxes.

Mr. SHULMAN: What I would say is the tax law is incredibly complex. There's lots of people who can use deductions in the code and complex tax planning to legally not pay taxes. I can't comment on an individual company and their interactions with the IRS, but I don't think the reporting was saying that they did things illegal. It's just that the tax law is riddled with loopholes which allows people to do planning and avoid paying taxes. And so I think everybody thinks that the tax law needs to get simpler and needs to be one that's fair to everybody.

MONTAGNE: This has been a concern for years and years and years. It goes back to the previous administration. Why is it so hard to simplify the tax law and make it, you know, as you say, fair to everyone?

Mr. SHULMAN: You know, I always tell people the reason it's hard to simplify or change tax law is because it's real money, and there's always winners and losers when you go through any kind of tax reform or simplification. My commitment and our agency's commitment is to try to understand taxpayers' individual situations and to apply the law that are on the books in a way that respects taxpayer rights and provides good service to the American people.

MONTAGNE: Doug Shulman is the commissioner of the Internal Revenue Service.

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