Bloomberg Law Quotes Niles Elber: TIGTA Calls on IRS to Modernize Offer-in-Compromise System

Bloomberg Law spoke with Niles A. Elber concerning the utility of the Internal Revenue Service creating a website to house redacted versions of offers in compromise, agreements between taxpayers and the agency to settle tax debts for less than what is owed.  To read the full article, please visit Bloomberg Law’s website (subscription required).

Excerpt taken from the article.

Worth It?

The IRS made some improvements over the course of TIGTA's review, which took place from July 2015 to March 2016. The agency updated written procedures and expanded automatic redaction, TIGTA said. The agency is considering “alternative and cost-effective delivery methods” to provide access to the files electronically, while ensuring proper redaction, in line with TIGTA's recommendation.

In the report the IRS also noted public viewing requests are “very rare.” The agency received no requests from Aug. 10, 2015, to Oct. 31, 2015. The agreements themselves are also fairly uncommon: There were 27,000 accepted offers and 68,000 requests in fiscal year 2014, TIGTA said.

Given the lack of interest in reviewing the documents, the process of converting paper files to electronic versions may not pay off, Niles Elber, a member at Caplin & Drysdale, told Bloomberg BNA.

“Is it really worth it given the sort of limited use?” he said. “I think, generally speaking, most people won't care.”

Moving Online

The SharePoint site the IRS is creating will be controlled by a “gatekeeper” who will review documents for proper redactions a second time. The electronic format will “allow us to better manage the retrieval, movement, retention and destruction of files,” Karen Schiller, commissioner of the IRS Small Business/Self-Employed Division, said in response to the report. The agency began using an automated redaction process in April and increased training for employees after previous TIGTA warnings, she said.

Elber said while posting the files online does open the agency up to some risk, the information available may not be of much use to identity thieves. Individuals whose offers in compromise are accepted are usually ill or “had no possibility of earning enough” to pay off their tax liability.