The IRS fails miserably at providing adequate taxpayer services, according to the National Taxpayer Advocate’s 2022’s Annual Report to Congress. NTA’s report details numerous problems with the IRS’s taxpayer services including that taxpayers face significant challenges reaching the IRS and that the IRS’s digital communications tools are too limited.
Importantly, these problems pre-dated the coronavirus pandemic.
As the report notes, taxpayers face significant challenges reaching IRS employees. The NTA notes that only 11 percent of calls were answered by a real person. In March of 2020, only 4 percent of calls were answered:
“During fiscal year (FY) 2021, the IRS received a record 282 million calls. Of those calls, 32 million, or 11 percent, were answered by CSRs…
The Level of Service (LOS) for the Accounts Management (AM) phone lines fell as low as four percent in March when Congress enacted sweeping legislation favorably impacting taxpayers’ 2020 taxes. Calls were not answered, leaving taxpayers wondering how the new legislation impacted their tax returns. In 2021, taxpayers experienced significant challenges while LOS fell to an all-time low.”
The IRS has been incapable of keeping up with phone calls for decades.
In 2013, NTA’s Nina Olson said that IRS customer service had not improved since 1998. “No, we don’t have improved customer service,” she said. Olsen was a community tax law project organizer during the IRS reform efforts, and was even invited to testify before the House Ways and Means Oversight Subcommittee in 1997 and before the Finance Committee in 1998.
In 2015, the IRS “courtesy disconnected” 8.8 million taxpayers, according to the National Taxpayer Advocate. “Courtesy disconnects,” is a term used by the IRS itself, a practice in which the agency hangs up on taxpayers when wait times are long.
The report also notes that IRS digital tools are limited, making communication with the agency unnecessarily difficult. As report notes:
“Despite its progress, the IRS has yet to develop and adopt a one-stop solution for online and digital offerings that combines communications and interactions with individual and business taxpayers as well as with tax professionals who represent these taxpayers… Imagine what the IRS can accomplish and how much time and effort it could save if taxpayers could easily access their tax information online. The National Taxpayer Advocate wants to stop imagining this; the IRS needs to have robust online accounts available for all taxpayers and their representatives.”
Advancement in digital tools, the report suggests, could be done with the IRS’s existing resources:
“The IRS needs to balance budget restrictions, use of existing resources, and taxpayer needs for each implementation.”
Again, these are not new issues. In past years, the IRS failed to improve communication issues. Congress passed the IRS Restructuring and Reform Act of 1998 (RRA 98), which sought to solve these issues. As the 2021 NTA report notes, “However, more than 20 years later, the IRS still has not meaningfully implemented this provision regarding its correspondence audit programs.”
Unfortunately, the agency has little regard for improving taxpayers’ experience working with the IRS. In fact, many IRS employees prefer to be hard to reach. One 2012 NTA blog outlines how Tax Examiners can simply disregard taxpayer cases because they know taxpayers may not be able to follow up on promised actions:
“No one employee must follow up on his or her actions or decisions with respect to a case or speak with the taxpayer about those decisions. Thus, it becomes easier for Tax Examiners to reduce taxpayers to mere paper to be processed or calls to be answered. In turn, it is easier to be careless or to succumb to the pressure to move on to the next case because Tax Examiners know the taxpayers will not be able to reach them again to follow up on promised actions.”
While the IRS insists all these problems are a result of a lack of funding, it is evident that each problem existed well-before any IRS budget cuts or COVID complications. The problem is not funding, but the way the agency is organized and run.
In the Democrats socialist spending bill, $44.9 billion would have gone directly towards enforcement. The agency would have received a comparatively meager $1.93 billion in funding for taxpayer services, which would be spread thin between pre-filing assistance and education, filing and account services, and taxpayer advocacy services.
The NTA’s Annual Report to Congress reiterates what most Americans already know: the IRS is woefully inadequate at doing its job, even when it has all the resources it needs.