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IRS Digital Communication

The IRS is moving into electronic communication with taxpayers through Taxpayer Digital Communication (TDC). This program will allow IRS employees to resolve taxpayer issues through email, chat, and other electronic functions. The project is currently in beta testing and is only available for those going through a correspondence audit on the Schedule A. The Taxpayer Advocate Service is also testing the TDC project in four locations; Nashville, New Orleans, Dallas, and Cleveland.
All taxpayers subject to a Schedule A correspondence audit will receive a flyer with their notice from the IRS giving them the instructions on how to access the TDC system. The IRS is anticipating that they will test the program with approximately 4,200 audits. The letters started going out to taxpayers before Christmas and they continue to issue 150 audit letters per week.
You are able to represent your client through the TDC program but you must first submit the power of attorney to the CAF unit before you will be able to access your client’s account. The power of attorney system is still through fax so allow 10 business days for the Form 2848 to be posted before accessing the TDC system. The IRS says that it will be a minimum of 6 months or more before the power of attorney can be electronically submitted.
The benefits of TDC are that information can be transmitted immediately, you will be working with one auditor and all documents can be uploaded to the taxpayer account. The down side is that you will not be able to see what your client emails to the IRS. While it is unlikely that a client will draft and send a letter to the IRS it is not inconceivable that they will be more likely to send an email.
This is a significant step by the IRS to set up communication with taxpayers through electronic methods. A roadblock to this process will be the cell phone number. Each time you access TDC an access code will be sent to the cell phone number under your social security number. If you have a family plan or your cell phone is under your business EIN then the system will not work. The IRS is working on this issue, but they have no alternate solution at this point.
In order to communicate with the IRS your editor had to sign up for a basic cell phone plan under my social security number as my cell phone account has been under my business EIN for many years. Depending on how much representation you provide for your clients you may have to adopt the same strategy.

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