Economy & Business: I.R.S. Set to Resolve Disputes Online:
"The I.R.S. is testing a system called Electronic Account Resolution with a handful of tax professionals. Lawyers, accountants and enrolled agents - a kind of preparer who is authorized to represent taxpayers before the I.R.S. - will be able to use the system; they can go online now to register. But individuals and other paid preparers will not have access.

James Leimbach, an enrolled agent in Panama City, Fla., who is one of the testers, is enthusiastic. 'Through a simple three-step process,' Mr. Leimbach said, 'I will be able to electronically access my client's tax records and then resolve problems.'

Under the present nonelectronic system, tax professionals must show the agency a power of attorney from the taxpayer before the I.R.S. will talk to them. While I.R.S. clerks will sometimes accept a faxed form, getting approval to represent a client can take days."

With the new system, a taxpayer fills out the power of attorney form and gives it to the tax adviser. Then the adviser logs on to an I.R.S. computer, using a secure Internet connection, punching in the client's adjusted gross income from any of the three previous years, the year of the return and the taxpayer's birth date. The taxpayer also gives a self-selected personal identification number.

"You get disclosure authorization almost instantly," Mr. Leimbach said. Immediately, a request can be made for the taxpayer's records, known as a transcript.

"Typically, getting a transcript took 5 to 10 days when ordered through the mail," he said. "With the new system, I will be able to pull transcripts up electronically."

Such speedy gathering of information and problem resolution - in contrast to hours or days of work - should hold down the fees taxpayers pay their advisers.

At first, the system can be used to resolve simple problems, like tracing payments, tracking refunds and entering into installment agreements to pay taxes.

The agency has not begun to work on more complex problems, like proposals to settle a tax debt for less than the full amount…

http://www.nytimes.com/2003/12/01/business/01taxx.html