W7

Discussions # 1

Why might it usually be desirable to settle a tax dispute with an agent, rather than appealing to a higher level within the IRS?  Also .. why might it sometimes be in your clients best interest to seek resolution at the higher level within the IRS?

Comment #1 (SD)

The tax dispute could be of benefit to the client if he/she get it settled through an agent rather than appealing at a higher level within the IRS because the agent is an expert tax advocate. Tax dispute resolution is an integral part of the operation in any modern tax system (Tran-Nam & Walpole, 2016). The availability of a fair, impartial and independent mechanism for resolving tax disputes between taxpayers and the central collection agency can be viewed as an indicator of how well-developed or advanced is the tax system under study (Tran-Nam & Walpole, 2016). By settling with the agent expedites the ending of such dispute and saves time and money in litigation. When going to court to collect money that is owed to the IRS will cost more money than it’s worth. 

     The experts deal with tax controversies that arise between tax collection entities such as the IRS and taxpayers. These tax disputes are typically the result of a tax audit. Dispute systems design involves the design and implementation of a dispute resolution system, which is most commonly conceptualized as a series of procedures for dealing with the stream of disputes connected to an organization or institution, rather than for an individual dispute or an individual procedure (Mookhey, 2013). The appeal can often reduce previously assessed taxes and penalties. Tax dispute resolution systems internationally generally have not been evaluated extensively from a DSD perspective (June 2018). One reason for this may be because tax disputes have traditionally not been regarded as interests-based disputes (June, 2018). If an individual loses their appeals case, then he/she will end up paying even more than before. A tax professional will know how the IRS thinks and what angles they are going to work. I think that going through an expert will be a less expensive process than going directly to a higher level within the IRS. Clients might seek interest at a higher level within the IRS because they may not trust the process of an agent's appeal or advice to the client.

Comment #2 (KC)

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision (Taxpayer Advocate, 2020). To ensure fairness, the IRS provides individuals with the opportunity to request appeals, where taxpayers can submit their tax disputes. The Appeals mission is to resolve tax controversies without litigation on a basis which is fair and impartial to both the Government and the taxpayer, promotes a consistent application and interpretation of, and voluntary compliance with, the federal tax laws, and enhances public confidence in the integrity and efficiency of the IRS (IRS, 2020). 

Deciding what is the best option to settle a tax dispute can be challenging. Individuals have different options from settling the tax dispute with an agent to appealing to a higher level of the IRS. In my opinion choosing how to settle a tax dispute depends on factors such as the specific situation and/or transaction and the amount of money involved in the dispute, among others.

Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice right; this means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before (IRS, 2020). Enrolled agents are professionals who specialize in tax knowledge and this can be one of the reasons in some cases individual’s select tax dispute agent, due to their expertise in the area. In some instances, I will say mainly based on the specific circumstances and the amount of money involved in the tax dispute, individuals then select to seek resolution at a higher level in the IRS.

Discussion # 2

Now that you have completed most of the class, what are some of biggest challenges that you think tax researchers are faced with and what are some ways to overcome those challenges?

Comment # 1

COLLAPSE

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     Technology development is slowly becoming an issue for some preparers. Technology today is constantly improving and is becoming expensive. Improving technology would prevent hacking and compromised documents. It is important to keep client information protective. Auditors experiencing greater client affinity and facing explicit client pressure suggest lower adjustments to clients’ aggressive accounting, consistent with motivated reasoning's goal-related predictions (Koch & Salterio, 2017). 

     Changing relationships with clients is another challenge with tax researchers. It takes a lot of research and hard work to please clients. For example, what has worked with one client may not work with another. Talent acquisition is a major concern as well. Tax researchers require a significant level of expertise. One way to solve this issue is to relate to individuals to the brand those who relate can foresee growth in professional and financial terms People analytics uses data to inform management decisions, be it in talent acquisition, retention, placement, promotion, compensation or workforce and succession planning (Walford-Wright & Scott-Jackson, 2018).

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Comment # 2

Some people may think is simple to answer tax questions and provide advice but there are many challenges that tax professionals must overcome. Pressure on professional fees, increased complexity in tax laws and business operations, and information overload all add significant difficulty to providing tax planning and tax compliance advice today (Thomson Reuters, 2020). It's difficult to predict what the regulatory future may have in store for CPAs over the next 10 years, particularly in an election year. But one thing is absolutely certain: Technology is going to bring huge changes in the 2020s (Drew, Tysiac, 2020). It is certain that changes will continue to occur, and new challenges will arise.

Among of the biggest challenges I think tax researchers face nowadays include ensuring having the correct tools and resources to be able to provide clients the best tax advice. Nowadays due to emerging technologies there are numerous resources online, many free and it can be challenging for tax professionals to select the best resources to ensure having the most up to date and accurate information. I will suggest ensuring only reliable sources such as IRS, Checkpoint, among others to be utilized is important for tax professionals because they rely on them not only for compliance and to protect their reputation as well.

Another challenge that tax professionals face during the tax research process is making sure the most up to date information is provided to the client. Tax laws changes constantly, for that reason tax professionals should conduct research based on the client’s situation to ensure the correct tax advice is provided to the client. Providing accurate information is part of complying with the accounting standards. Tax practitioners provide tax advice to clients and should be familiar with the applicable standards for providing such advice, including Circular 230, the AICPA’s Code of Professional Conduct, and the AICPA’s Statements on Standards for Tax Services (SSTSs) (AICPA, 2020).