Don't Mess With Taxes

If you can come up with a way to make taxpayers' online interaction with the Internal Revenue Service easier, the agency wants to know.

In fact, the IRS is so eager for real-life input on a prospective taxpayer Web option that it's offering a $10,000 cash grand prize to the person who can "reimagine … and design the taxpayer experience of the future."

Even better, it's not a winner-take-all contest. In addition to the $10K top prize, the challenge is awarding other cash awards ranging from $1,000 to $5,000, with a total of $21,000 in prizes to be paid this summer.

Calm down IRS bashers now shouting at their screens, "Where in the #@$% is the IRS coming up with this kind of money?" Although the tens of thousands being offered are in connection with an IRS project, the prize money will be paid by the Mortgage Bankers Association (MBA).

IRS and private industry: With the challenge, the IRS is looking for guidance in developing a key component of its Future State plan, an outline of agency activities in five years and beyond. One of its key components is online taxpayer accounts.

The IRS thinking is that by letting folks access their personal tax accounts directly online, they won't have to wait for help via the much (and correctly) maligned IRS telephone lines and walk-in Taxpayer Assistance Centers.

As for mortgage bankers, David Stevens, MBA president and chief executive officer, told the Wall Street Journal that his group's members are looking for a streamlined way for potential borrowers to get past tax returns to lenders.

To those combined ends, the IRS and MBA are going right to the source -- potential users.

Viva la public-private partnerships!

Crowdsourcing future taxpayers' experience: The hopes, dreams and rules for the IRS' first crowdsourcing effort are laid out at the Tax Design Challenge page at Challenge.gov.

Here's some of what the agency wants:

Taxpayers have the right to be informed, which includes access to their personal taxpayer data. Many taxpayers, however, might not know where to find this information or how to use it, as much of this information reads like a receipt and can be hard to understand for those who are not finance professionals.

The goal of this challenge is to reimagine the taxpayer experience and design the taxpayer experience of the future. With over 200 data fields at play, how might we design, organize, and present tax information in a way that makes it easier for taxpayers to manage their taxpayer responsibilities, and to use their own taxpayer data to make informed and effective decisions about their personal finances?

The agency also is looking for a design that:

• Improves the visual layout and style of the information for the taxpayer.
• Makes it easier for a taxpayer to manage their taxpayer responsibilities.
• Empowers a taxpayer to make informed and effective decisions about their personal finances.

And in developing the site, the IRS encourages designers to consider the variety of taxpayers to be served. "Our tax system includes people from many different socioeconomic backgrounds, with different needs and responsibilities," notes the IRS in issuing its design challenge.

April 17 kick-off: Yeah, it's kind of wishful and vague, but the contest hasn't started yet. It officially kicks off on April 17, the Sunday before most 2015 tax returns are due.

On 4/17, says the challenge website, more information -- including the data fields found in the Tax Data Document (TDD), upon which the designs must be built -- will be posted.

Also that day, interested Web designers will be able to arrange meetings with around two dozen challenge mentors. These folks are strategists and designers who have built products for such sites as Betterment, Google, HelloWallet, Social Behavioral Sciences Team and United States Digital Service.

IRS product managers who have digital and tax expertise also will be available to serve as mentors on the project.

Tax designer meet-up: And if you'll be in Washington, D.C., on April 17, you can get the contest specifics firsthand.

A Tax Design Challenge kickoff event will be held from 11 a.m. to 3 p.m. EDT at 1776, the National Capital's venture capital incubator. There you can talk with policy experts about financial capability challenges that could be addressed in a design, network with some of the challenge mentors and meet some of your competitors.

Plus, there'll be free beverages and snacks! Again, provided by private partners, not the IRS.

You can register now for the April 17 D.C. event.

If you can't make the kick-off party, head back to the Tax Design Challenge website (and the ol' blog, too!) that day for more details.

Also mark May 3 on your calendar. That's when your design submission is due. Judges will examine the entrants and make their decisions between May 23 and June 3.

Remember to pay your prize taxes: And, oh yeah, all those cash awards? They all are taxable income.

So in addition to planning a new online taxpayer experience for the Future IRS, make tax plans today (estimated taxes, perhaps?) to pay the current IRS its share of your 2016 added income!

You also might find these items of interest:

• IRS' electronic future, c. 2009
• Securing taxpayer data is the IRS' biggest challenge
• IRS emphasizes its commitment to taxpayer privacy