IRS Chief Counsel William Wilkins visits UF Law
Adaptation to one’s environment is key to survival, and while that may have first been observed in the animal world, it holds true in many circumstances. The IRS faces the same challenge, and on Thursday, Oct. 7, IRS Chief Counsel William Wilkins described to students what the service is doing to adapt to the changing circumstances of today’s world.
One of the themes of current practice that Wilkins described was how to best leverage the staff of his office into favorable results. Many people might be surprised to learn that the Office of Chief Counsel has around 2,500 employees, which is no small number. But when that number is compared with the approximately 300 million Americans in this country, not to mention the millions of businesses, it becomes apparent that Wilkins must use his staff wisely to get the necessary results.
He described one successful use of leverage that emerged from the fallout of the UBS scandal.
“You may remember,” Wilkins said, “that UBS was caught promoting tax evasion as a business model, and that was leading to the disclosure of a lot of secret accounts within that organization.” Afterward, the IRS decided to let others who had stashed income in overseas accounts fess up, under what the service termed the Voluntary Disclosure Program. Those who came clean could settle their tax matters, and would not have to face the harsher penalties that would be waiting for them if they kept silent.
“The outcome exceeded all the hopes,” Wilkins said. Instead of spending years or decades trying to catch and punish these tax cheats, the Office of Chief Counsel was able to use their resources efficiently and recover the unpaid tax dollars that were due. “We were able to leverage a few hundred practitioners into 15,000 disclosures,” Wilkins said.
The average middle-class taxpayer knows a couple things about filing taxes: tax forms are difficult to decipher, and private accountants don’t come cheap. With this in mind, it’s not surprising that tax preparation offices that cater to the middle-class have become widespread and successful. However, taxpayers have recently come to also understand that the person behind the desk may not know much more about taxes than the customer.
One of the service’s future goals is to regulate those who are paid to prepare anyone’s tax return. “Later on,” Wilkins said, “preparers will need to pass a test and do continuing education to maintain their eligibility to be a paid preparer. The goal there is to try to elevate the quality of the tax preparer.”
He also detailed that the IRS has become much more than a tax collector. With the economy in a slump, the government has notably used the service to implement strategies to improve the economy. One that just about everybody has heard of is the first-time house-buyer credit, which gave the public a tempting financial incentive to buy a house. While filling out one tax return may seem cumbersome, handling hundreds of millions of them, while trying to correctly implement new and creative measures like the home-buyer credit, is quite a difficult task.
Nevertheless, the IRS was up to the task. Wilkins was proud of how well it was handled, and also thought it was a good demonstration of the breadth of the current service. “The IRS really did a remarkable job in rolling that out,” he said, “and it shows the robustness of the organization in terms of its ability to interact, at the retail level, with lots and lots of people.”