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Taxpayer Advocate

IRS Customer Service Suffers Sharp Decline

By July 18, 2015No Comments

The National Taxpayer Advocate Nina Olsen recently released a report which says that years of budget cuts have caused diminished customer service.  

I’m not surprised with the Taxpayer Advocate’s findings as our professionals often encounter the same poor service as taxpayers.

The report said “For the segment of taxpayers who required help from the IRS, the filing season was by far the worst in memory.” To be fair the report did indicate the 2015 tax season was successful for most taxpayers who filed their tax returns without the need for IRS assistance.

However, a significant segment of taxpayers requiring direct contact with the IRS did not receive acceptable levels of service. The report said “The IRS’s shortcomings were apparent across the full range of taxpayer services, including telephone service, walk-in assistance, and correspondence. At the same time, taxpayers who were victims of identity theft continued to encounter significant frustration and delay in resolving their problems.”

Only 37 percent of callers wanting to speak with an IRS representative were successful and they had an average wait time of about 23 minutes. This was a dramatic decline in calls answered from last year when the IRS answered 71 percent of calls and the average hold time was about 14 minutes. Approximately 50 million callers attempted to reach the IRS during tax season. The IRS help line was so overloaded that it hung up on 8.8 million taxpayers. The IRS calls these hang-ups “courtesy disconnects” as the hang-ups occur early in the call, rather than keeping the caller on hold for an extended period of time, and eventually disconnecting the caller.

The IRS answered just 17 percent of calls from taxpayers who called after being notified that their tax returns had been blocked by the Taxpayer Protection Program on suspicion of identity theft with an average wait time of 28 minutes.

The 2015 tax filing season was also impacted by the first time reporting requirements of the Affordable Care Act which required taxpayers to notify the IRS whether they had health insurance coverage in 2014, report any subsidies received and calculate penalties for failing to have health insurance.

The IRS responded in a statement “It is important to note that the IRS must carefully balance limited resources to meet its dual mission of providing taxpayer service and enforcing the tax laws.”

Each year the IRS receives millions of letters from taxpayers responding to proposed adjustments and other notices. At the end of the 2015 filing season the IRS had failed to process 25 percent of taxpayer correspondence within normal timeframes.  We can certainly attest to this problem as we regularly receive correspondence from the IRS indicating they need an additional 30-60 days to respond to our letters regarding our client’s tax issues.

The Taxpayer Advocate stated that “There is no doubt that the deficiencies in taxpayer service are substantially attributable to a lack of resources. With funding down about 17 percent on an inflation-adjusted basis since FY 2010 and with the IRS having had to implement large portions of the Patient Protection and Affordable Care Act and the Foreign Account Tax Compliance Act this year without any supplemental funding, sharp declines in taxpayer service were inevitable.”

If and when Congress decides to increase IRS funding we hope to see improved service. However, the IRS must use any additional funding efficiently and realize that an extremely important part of its mission is to maintain the high level of voluntary compliance by taxpayers. This can only be accomplished by providing outstanding customer service to the overwhelming majority of taxpayers who want to comply with their tax obligations.

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