Industry Panel Perspectives May 2012

Industry Panel Perspectives May 2012 Modernized eFile (MeF) Presented by Michele Geraci

Background  MeF Roadmap – 2010: Support for 23 Forms – 2011: Additional Forms and Focus on Infrastructure – 2012: Support for Remaining Forms/Schedules

Challenges  Slow Acknowledgements Lead to MeF Shutdown  Refund Delays  Return Processing Issues

Impact  Taxpayers – Delayed Refunds – Where’s My Refund  Industry – Significant Call Volume – Brand Image Impact

Recommendations  Support Legacy EF for Another Tax Season  Set Taxpayer Expectations for Refund Timing

Industry Panel Perspectives May 2012 Return Preparer Regulations Presented by Kathy Pickering 7

RTRP Requirements 8 New Registration $64.25 / Renewals - $63 Provisional PTINs available for another year PTIN Tax Compliance - Straightforward requirement Background Check – proposals pending Tax Compliance and Background check Beta test period ran Nov – March/ test is now fully live Initial results are very encouraging IRS Test 15 hours per year / Effective in hours of ethics, 3 hours of federal tax law updates, 10 hours of other federal tax law Last minute year end compression challenges Continuing Education

Upcoming Challenges  Tax Preparer Attrition  Test Schedule Compression  PTIN Information and the Freedom of Information Act  Compliance / Enforcement of Regulations  Preparer Penalties 9

Successes  IRS personally delivering first certificates  Recognition and celebration of accomplishment  IRS engagement and communication  Establishment of Return Preparer Program office  Willingness to review/revise plans – e.g. fingerprinting  Proactive problem solving for potential issues 10

Industry Panel Perspectives May 2012 Tax Armageddon Presented by John Sapp, CPA 11

Prophecy and Prognosticators December 2012 – The end of the World? 12 “…Ticking Time Bomb…” “…Total Confusion…” “…Real disaster in the filing season…” “…Very Very Concerned…”

Prophecy and Prognosticators December 2012 – The end of the World? 13 ? ? ?

14 “Ticking Time Bomb”  93 Expiring or Expired Tax Provisions  Federal Debt Limit  Election Year  BCA Spending Cuts  Medicare Payment Rate Reduction  Why not just extend?  Deficit from $3.0 Trillion to $11.0 Trillion

15 “Very Very Concerned”  AMT Exemption  Depreciation  Above the line Deductions  After AGI Deductions  Tax Rates  Taxable Income

“Total Confusion”  Taxpayers  Politicians  IRS  Financial Markets (ASC 740)  IRS  Tax Preparers  Industry 16

“Real Disaster”  Confusion  Inability to file  Delayed Season start  Support and Communication  Resource Allocation 17

Industry Panel Perspectives May 2012 Forward Framework Presented by Dave Olsen 18

Challenges 19 Removal of DI eroded taxpayer information Debt Indicator Reduction of previously reported details Daily Volume Information void confounds taxpayer / preparer service System / Return Status Early season filer impact Refund Status

Communication Framework  Real time MeF world of expectations  Key Principles  Transparency  Timeliness 20

Communication Framework  Proposed Definition of an Event Interruption of a process for over x minutes… 21

Communication Framework Communication Process Foundation  Leverage industry front-line with  Taxpayers  Preparers  Initial Alert / Hourly Updating  Internal / External Channel Consistency  Data Availability 22

Objectives  Build on planning process successes  Long term – “Dashboard”  Partner and move forward 23