A recent Accounting Today article covered the announcement from the Government Accountability Office this past week that the IRS would begin instituting video conferencing to meet with tax preparers.
The conferences are not set to cover audits of client records yet, but right now to start taking the place of in-person compliance visits with tax professionals. Historically, the IRS has set up in-personal compliance visits to help better educate tax preparers. The goal of the visits was to reduce inaccuracies in returns.
With all the changes to tax credits in recent years, there is an increase in credits being incorrectly filed, costing millions in inaccurate refunds being paid out.
The article cites that roughly 23% of refundable tax credits paid out for 2021 tax filings were inaccurate, costing over $25 million in taxpayer dollars. Staffing shortages at the IRS have slowed down the traditional in-person visits and as a result, compliance has suffered too.
Most of this is presumably inadvertent as either preparers, or clients providing information, do not necessarily understand the compliance involved with each specific credit. The advanced child tax credits alone caused massive headaches for everyone involved especially amongst inaccurate reporting letters from the IRS that went out to taxpayers.
A visit from the IRS might not always seem like something that’s exciting to those of us in the field as preparers but welcoming an invitation for more education and clarity is always an opportunity to help you and your team improve. Improved accuracy also helps cut down on the number of notices you may end up receiving, which always helps cut down on frustrating amounts of time that could have been avoided.
Video conferencing is a viable and efficient solution for the IRS to address compliance issues without having to continue to rely on in-person meetings.