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Tax Info Is Confusing, Can Civic-Minded Technologists Help the IRS?

The federal agency is hosting a contest to encourage citizens and businesses to suggest ways to improve the design, organization and presentation of its website.

(TNS) — Tax information can baffle most consumers.

So says the Internal Revenue Service itself.

That's where "civic-minded technologists, designers and innovative thinkers" come in.

The IRS announced last week that it's putting on a contest, complete with six cash prizes of up to $10,000, and inviting citizens and businesses to suggest ways to improve the design, organization and presentation of its website. The goal of the agency's first "tax design challenge" is to make information on the site more understandable to taxpayers.

Although a wealth of information is currently available, many taxpayers might not know where to find it, or how to use it, because much of it "can be incomprehensible to those who are not financial professionals," the federal agency admits.

The challenge comes as the IRS continues to try to migrate taxpayers to electronic filing and as the agency faces pressure to better protect filers' data.

In fiscal 2013, 83 percent of individual taxpayers filed electronically, up from 71 percent in 2010, according to a September report from the Treasury inspector general for tax administration.

Taxpayers also go online to download forms, view content and check refund status. In fiscal 2012, the Where's My Refund? application was used 132 million times.

"While these trends demonstrate substantial progress toward full online tax administration, there are unmet taxpayer needs that provide opportunities for the IRS to introduce more online self-service options," the watchdog said. "The IRS reports there is a compelling case to refine web content and search capabilities that will lead to an improved user experience."

The IRS said it has a "long history" of trying to make tax information more understandable. Efforts include redesigning taxpayer notices, soliciting feedback on forms and trying to adhere to the 2010 Plain Writing Act.

Aside from design, the IRS also needs to better secure taxpayer data. About 720,000 accounts have been "inappropriately accessed" by criminals in recent years, the Government Accountability Office said in a Monday report titled "IRS Needs to Further Improve Controls over Financial and Taxpayer Data."

The IRS isn't the only U.S. agency looking to the public for technological help. Since 2010, more than 90 federal agencies have run public-sector prize competitions, the IRS said.

Earlier this month, the Defense Department said it would invite hackers to test its cybersecurity. Hack the Pentagon is "the first cyber bug bounty program in the history of the federal government," it said.

The IRS said its contest will help it to "begin reimagining the taxpayer experience."

"The challenge is an opportunity for talented individuals to touch the lives of Americans across the country through design," its contest description says.

Chicago tech worker Marty Malone said a $10,000 first prize is "most likely not enough to garner the attention of many talented folks."

"I'm sure this would take a team to build — not just one person — so at the end of the day it regrettably probably wouldn't be worth it for many people," Malone said. "To build something truly valuable, the IRS should be collaborating with multiple different government organizations to share best practices."

Derek Eder, a founder of Chi Hack Night and founder of civic technology company DataMade, said that, while it's laudable for governments and agencies to try to generate public interest in website or app ideas, he expects little substance to come out of the IRS challenge.

"The concept of a challenge rarely leads to useful tools or products," he said. "Good design is something you don't do once; it has many iterations."

The government doesn't have a great track record of picking vendors either, Eder points out, citing early Healthcare.gov website problems.

The government would likely be better off continuing to invest in 18F, a tech startup within the U.S. General Services Administration, he said.

Daniel O'Neil, Smart Chicago Collaborative executive director, said the IRS might get some takers. "It's not an immense amount of money, but it's certainly a great amount for people who are doing a nights-and-weekends project," he said.

Criteria used to judge IRS entries include: visual hierarchy, or making the most important information easy to find; density, or how easy it is to digest material; and accessibility, such as whether a diverse population can make sense of the information.

More information can be found at www.taxdesignchallenge.com. Participating businesses must be incorporated in the United States. Individuals must be U.S. citizens or permanent residents. Participants can't work for the Mortgage Bankers Association, which is funding the awards.

Contest winners will be cut no slack: The awards, which total $21,000, "may be subject to federal income taxes," rules say.

©2016 the Chicago Tribune Distributed by Tribune Content Agency, LLC.