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IRS Providing Record-Low Taxpayer Service

by Mike Godfrey, Tax-News.com, Washington

27 February 2015


National Taxpayer Advocate Nina Olson testified that United States taxpayers are receiving "the worst levels of taxpayer service" from the Internal Revenue Service (IRS) since records began in 2001, at a February 25 hearing of the House Subcommittee on Financial Services and General Government.

At an IRS Oversight Hearing, Olson said inadequate taxpayer service is the most serious problem facing taxpayers in 2015. "Simply put, the IRS has to do a better job of meeting taxpayer needs," she said.

She pointed out that, during the period January 1 to February 14, "the IRS answered only 43 percent of the calls it received from taxpayers, and those who managed to get through waited on hold for an average of about 28 minutes. By comparison, 77 percent of taxpayers got through and waited on hold an average of about 10 minutes during the same period last year."

She put the agency's service failings down to insufficient funding from US Congress. Until it receives adequate funding, it will not be able "to hire more customer service employees to answer taxpayers' telephone calls, process taxpayers' correspondence in a timely manner, and assist taxpayers who seek assistance at its walk-in sites."

However, she also noted that "the IRS will need to show Congress that it is a responsible steward of its resources before it receives additional funding." Currently, "the IRS is making resource-allocation decisions without hard data to show that its decisions are the best ones to drive voluntary compliance and collect revenue in an effective and efficient manner," she said.

In short, Olson said that "the IRS must conduct a comprehensive audit of itself and all of its activities. … IRS compliance initiatives are often based on outdated or unproven assumptions and can generate significant volumes of rework for the IRS and tremendous burden for taxpayers."

In his opening statement, the Subcommittee's Chairman, Ander Crenshaw (R – Florida), also pointed out that, "after five years of budget cuts or freezes, I would hope that the IRS would have turned a new leaf by now – studying its budget line-by-line, identifying its highest priorities, reengineering its business practices, and concentrating its resources – both people and money – on what matters the most."

For example, he said that instead of just complaining about its audit rate going down, the IRS could do a better job of selecting which cases to audit. He asked whether the agency has refined its selection criteria to reduce cases that are selected for audit but do not result in a change in tax liability.

TAGS: compliance | tax | business | tax compliance | budget | Internal Revenue Service (IRS) | tax authority | United States | Tax

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