Last week, Kathy Petronchak, alliantgroup’s Director of IRS Practice and Procedure and the former IRS Commissioner of the Small Business/Self-Employed Division (SB/SE), testified before the House Ways and Means Oversight Subcommittee regarding potential reforms to the IRS’ dispute resolution process.
During the hearing, Petronchak discussed various challenges facing taxpayers with respect to IRS examinations and the broader Appeals process. Petronchak focused on the difficulties that have hit small and mid-size businesses the hardest, including a decrease in the use of alternative dispute resolution, emerging problems in the independent Appeals process, an overall lack of transparency from the IRS during examinations and third party contact procedures that are often prejudicial to the taxpayer.
In her testimony, Petronchak provided potential solutions that could ease the compliance burdens on small and middle market companies. She encouraged the IRS to follow auditing procedures applied in large business audits on small and mid-size companies to promote added transparency and bring greater fairness to the process. By adopting more standardized procedures, the IRS can ensure that all taxpayers are treated equally.
Petronchak offered her support for other commonsense reforms that would benefit small and middle market businesses. Such reforms included increasing access to the IRS Fast Track Settlement (FTS) program to small and mid-size companies to quickly settle disputes and separating IRS compliance employees from Appeals to create a more independent process. She also stressed the need for the IRS to improve education and outreach efforts as well as hold IRS employees more accountable to the Taxpayer Bill of Rights (TBOR).
“During her testimony, Kathy eloquently described many of the frustrations that our clients and CPA partners have voiced to us over the years,” said alliantgroup CEO Dhaval Jadav. “It is my hope that this hearing will lead to a better and more productive relationship between taxpayers and the IRS. All we want is a fairer and more efficient process for all parties involved and Kathy has provided an excellent roadmap to the committee on how to get us there.”