The Collaboration Process
This collaboration represented all new territory for the IRS, and as mentioned earlier, territory that had a high potential for profit, and thus, was very sensitive to the vendor community. The IRS adopted the private sector concept of exchange values, without the actual exchange of monetary value to the IRS.
There was further, a clash between commercial and public sector values. The IRS wanted to reach out to the low income population, enabling them to file at the lowest cost with the quickest return; a value not embraced by the private sector partners who are in the business to make a profit. This issue was ultimately resolved with the development of the Quicken Tax Freedom application, free filing for low income tax payers (gross income less than $25,000). Today, there are eight approved partners offering free Internet filing of taxes for qualifying tax payers.
In developing the project, there was a range of issues that the partners needed to collaborate on and resolve. First was the delivery method, whether to go with e-file software or use the third party tax vendors. Convenience and efficiency were also problems; each transaction required three separate processes, with paper still being required for a legal signature. The IRS ETA and legal counsel staff had to negotiate for the development of a secure autnentication process that could be used by the tax submitters to eliminate the need for a paper signature. Security of the personally identifiable information also presented concerns. It was important for the IRS to be sure that on its part, the data submitted by the taxpayer was protected under the Privacy Act. Finally, fraud was a major potential problem with an electronic system. The tax preparers were solicited for suggestions for remediating these problems. The IRS saw it as a benefit that the tax preparers teamed together to bring propositions to IRS to solve these problems. This type of collaboration was seen as successful by the IRS staff. The tax preparers were able to make a number of recommendations to enhance the program as well. One suggestion they came up with, which was put in to practice, was enabling credit card payments over the Internet as a value-added to the program.
The IRS realized that as a federal government agency, it could not officially endorse specific tax preparer businesses. What they were able to offer were "privileges" to certified partners, such as having their name, services, and a web address link to the business home page included on the Digital Daily web site. Thus, the IRS was able to say, we cannot endorse these vendors, but we suggest you go to their websites and see how they can help you e-file.