New Revenue commissioner answers MNCPA questions
Advocacy
| April/May 2023 Footnote
Editor's note: Updated March 29, 2023
As the new revenue commissioner, I’d like to introduce myself to the MNCPA and its members. I’ve met many of you in my 18 years on the Minnesota House Taxes Committee, and always appreciated the knowledge and ideas CPAs bring to the table.
In my time as a legislator, I also got to know various policy and leadership staff from the Department of Revenue. I was always impressed by their dedication and professionalism. My time as commissioner has only reinforced my admiration for the department’s top-notch team and the work they do.
The Revenue-MNCPA partnership works for Minnesotans and exemplifies the department’s mission:
Working together to fund the future for all of Minnesota.
I appreciate the chance to continue Revenue’s regular contributions to Footnote, starting with this column by asking questions provided by the MNCPA.
You spent 22 years in the Minnesota House of Representatives, much of that on the Tax Committee, including time as the chair. How will that experience and familiarity with the state’s tax system — and processes — benefit you in your role on the administrative side?
I served on the House Taxes Committee, Property Tax Division, and Education Finance Committee, among other assignments. I learned how our tax code can impact Minnesotans in different ways depending on someone’s income level and where they live, work or have a business.
Incomes, property values and local tax bases — among other things — vary considerably between (and within) urban, rural and suburban communities across our state. It’s crucial to keep this in mind when thinking about our tax laws and potential changes to them.
As a legislator, and now as revenue commissioner, my top priority has been to ensure all Minnesotans have opportunities to succeed. No matter who or where they are in our state!
Public investments — through our tax code and education system, among others — are key to providing those opportunities. For example, refundable income tax credits can help people and families with low and middle incomes in our state move up the ladder, find educational and economic opportunities, and build a prosperous future.
With our current budget surplus, we’re in a unique historical position to increase tax credits and other supports to help them. I’m thrilled to be working with Gov. Tim Walz and Lt. Gov. Peggy Flanagan to make that happen as part of their One Minnesota initiative.
You bring an educator’s perspective to leadership at Revenue. How does that background help you in your role working with CPAs and their clients?
One thing I learned in 40 years as a teacher is the importance of trying to keep things as understandable as possible. I think that’s what we try to do at Revenue — and what you as CPAs try to do with your clients.
Tax laws can be complex at times. A key part of our job is to help taxpayers understand what’s expected of them, and the tax benefits for which they may qualify. Making the laws easier to understand makes it easier for taxpayers — and for you as tax professionals — to comply with those laws.
Another lesson I bring from my teaching days is the importance of getting involved. When I taught high school government, I made sure my students knew who represented them — whether at student council, local government or the Legislature — and that they watched those representatives in action by following civic news and attending public meetings.
I also encouraged students to take the next step and get involved to work for the things that matter to them. The MNCPA and other professional organizations help tax professionals do that — and we welcome your input.
CPAs still report some frustrations working with Revenue audit staff who are not as experienced and who are developing skills to be successful auditors. Can you share what steps CPAs can take to make the audit process more effective and efficient for everyone?
During an audit, the most important thing you can do is to promptly respond to our notices, letters and requests for information. Contact the auditor and share any requested records and information by the dates we list in the letter.
It’s also important to reach out immediately if you have any questions or concerns:
- If you have questions about the audit or records being requested, contact the auditor for clarification.
- If you have concerns about the audit process or auditor, contact their supervisor to discuss them.
I also encourage you to complete our post-audit surveys to help identify areas for improvement. In recent years, we expanded these surveys to more business taxes, and they continue to be an important source of feedback for us.
The MNCPA and its members have a strong working relationship with the Department of Revenue. Are there things the society and its members should focus on to facilitate meaningful discussions and continue a successful partnership, while still advocating for clients and businesses?
I think the MNCPA and Revenue want the same thing — a tax code that works for everyone and that people and businesses can understand. And, speaking for myself and for the department, we’re always willing to listen. If you see areas where we can improve, please reach out.
I also encourage you to watch for, and participate in, our expanding roster of public engagement events and other efforts. These are important opportunities to identify and address areas where our tax code or policies can be more equitable. CPAs represent a wide range of clients, and your experience can also help in this regard.
So, like my students, I’m asking you to be involved!
Are there trends that Revenue is seeing when working with CPAs? Are there steps CPAs can take to eliminate the negative trends or expand on the positive trends?
We really appreciate working with CPAs when there are concerns or opportunities to update state tax laws. I was very pleased Minnesota could enact an early federal conformity package this year, before opening our individual income tax filing season. And I appreciated MNCPA’s support to help get it done.
Even as partners, there may be times when Revenue and MNCPA do not agree on an issue or how the law applies. In many ways, that’s when our relationship really shines. These discussions are an opportunity to better understand each other — something that does not always happen these days.
Respecting and discussing our differences can strengthen our partnership. Open and frank dialogue is a cornerstone of our democratic system. These debates lead to better tax laws and help the department publish more useful administrative rules and revenue notices.
Are there new or improved internal processes coming that could impact the customer (CPA and client) interactions with Revenue?
Revenue is always looking for ways to improve our processes and customer service. We are working to provide more digital and self-service options wherever possible — part of a broader trend across Minnesota government. For example:
- We continue to refine and improve our Audit Room application that allows Revenue and taxpayers or CPAs to electronically share audit data. This online file exchange helps streamline audits and reduce the amount of time required for taxpayers.
- We’re exploring new virtual meeting options to serve customers more quickly when they come to the Revenue offices in St. Paul.
Is there anything else you want share or that our members should know about the Department of Revenue?
It’s important that our state tax code values equity, integrity, fairness and transparency. CPAs have an important role by helping your clients understand the tax code, meet their obligations and get tax benefits they are due.
I like to think about another aspect of our work, too. On a deeper level, when people interact with Revenue or their CPA about taxes, it can affect their view of government and even our democracy.
When we provide information, tools and service that work for customers and clients, it builds their confidence that our government is working. Our Revenue team takes this responsibility seriously.
Many people experience our tax system by working with a CPA. You provide a crucial link between Revenue and those taxpayers. In this way, your work serves both your clients and the state — making CPAs both key partners and important customers for Revenue.
We work hard to serve you and your clients and realize there are going to be things we can do better. Let us know when that happens, and if you have thoughts on how we can improve.
I look forward to meeting more of you at upcoming Revenue-MNCPA (and other) events. Thank you for your input, and for being a great partner!
Paul Marquart is the commissioner of the Minnesota Department of Revenue. You can find more about tax laws and the department’s mission and strategies at www.revenue.state.mn.us.
