May 16, 2016

Senator Warren Urges IRS to Select Balanced Representation for Electronic Tax Advisory Committee

Committee now is dominated by representatives of tax preparation & software industries; should better represent interests of taxpayers

Text of Sen. Warren's letter to the IRS available here (PDF)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) today sent a letter urging the Internal Revenue Service (IRS) to select consumer advocates, as well other members representing the needs of low-income, elderly, disabled, and non-English speaking taxpayers, to serve on its Electronic Tax Administration Advisory Committee (ETAAC). The ETAAC, which was established to "provide an organized public support of the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns," currently is dominated by representatives of the tax preparation and software industries, who make up six of the committee's nine members.

Noting that the IRS for the first time explicitly sought applicants with consumer advocacy experience during this year's ETAAC nominations process, Senator Warren stated in her letter, "I urge you to follow through on your interest in ensuring that ETAAC appropriately represents American taxpayers and to name a substantial number of consumer and public advocates as new ETAAC members."

"Instead of a committee that reflects the diversity of consumer interests, ETAAC membership has been heavily loaded with representatives of the paid tax preparation industry," she wrote.  "The overwhelming representation of the tax preparation industry on the committee has rendered it more of an industry mouthpiece than a true public forum."

In her letter, Senator Warren explained that although the ETAAC is supposed to maintain a "balanced membership," it has since its inception consisted substantially of private sector representatives. These industries benefit from IRS policies that keep electronic filing services in private hands, as taxpayers spend an average of $200 a year for tax preparation services. Additionally, the IRS, working with the ETAAC, currently has plans to expand the role of tax practitioners and tax software companies in providing direct assistance to taxpayers as part of its "Future State Initiative." This approach would substantially increase compliance costs for taxpayers, and could have a particularly significant effect on low-income taxpayers, taxpayers not proficient in English, the disabled, and the elderly - groups that historically have not been well-represented on the ETAAC.

"Insight from private industry-including tax software providers and tax preparers-is valuable to the IRS as it plans its electronic tax initiatives," Senator Warren wrote. "But this committee, which is responsible for advising the IRS on electronic tax filing, should not be dominated by private interests that profit from the tax filing system it seeks to shape and whose voices come at the expense of broad public perspectives."  

Read a PDF copy of Senator Warren's letter to the IRS here.