Customer service at the Internal Revenue Service has gotten so poor that the agency could only answer six in 10 phone calls from taxpayers seeking help in the last fiscal year, an in-house watchdog reported Thursday.
The slow responses are just one of several declines in service that National Taxpayer Advocate Nina E. Olson cites in her annual report to Congress, which lays the blame on lawmakers for cutting the tax agency’s budget in recent years and intensifying the pain with the automatic cuts known as sequestration.
“Answering taxpayer telephone calls effectively is labor-intensive,” Olson wrote. “While some callers can be assisted through automation, tens of millions of taxpayers want to speak with an IRS customer service representatives each year.”
In the last fiscal year, “nearly 20 million calls..went unanswered because the IRS does not have enough employees to handle them,” her report said.
The IRS provided this comment from new Commissioner John Koskinen in a press briefing early this week
“The IRS needs to receive adequate resources. I’m extremely concerned about the deep budget cuts that our agency has had to absorb over the last few years. It’s critical that we find a solution to this problem, and I will do everything I can to make sure that we do. I hope that one of my legacies of my four years as IRS Commissioner will be that we put the agency’s funding on a more solid basis.”
Olson serves as an independent ombudsman within the IRS, advocating for the country’s 141.2 million taxpayers. Her staff also helps about 300,000 taxpayers a year resolve disputes over refunds or payments to the agency.
Her report repeats a call for a taxpayer “Bill of Rights,” particularly in the aftermath of a scandal last year, in which employees in the tax-exempt organizations division used appropriate criteria to screen applications from conservative groups.
It calls for better oversight over incompetent or unscrupulous tax preparers and presses for more carrot than stick approaches to delinquent taxpayers, stressing that better voluntary compliance strategies like installment plans can be more effective than liens and property seizures.
Olson also echoes calls from public employee unions and others for adequate funding to allow the IRS to robustly pursue enforcement, since a dollar spent by the agency generates about $255 in additional tax collections.
And she expresses alarm over cuts to the IRS training budget, which was reduced since fiscal 2010 to $22 million from $172 million.
But the revelations about declining customer service could alarm taxpayers.
With a workload that has grown over the past decade, due in past to a more complex tax code, IRS funding and staffing have been cut by 8 percent, the report says. As a result, employees answered just 61 percent of calls from taxpayers seeking help from customer service staffer in fiscal 2013 — although it is unclear whether the other callers did not get through, had their calls dropped or were unable to get their questions answered.
In the previous year the number of failed efforts was 39 percent; 10 years ago, just 13 percent of calls seeking help were not answered.
Other declines in service include:
— Taxpayers who did get through had to wait on hold for approximately 17.6 minutes, a jump from 2.6 minutes 10 years earlier, with nearly half the increase in wait time occuring since fiscal 2010.
— The IRS has announced that it will no longer prepare returns for low income, elderly, and disabled taxpayers. Ten years ago, the agency prepared 476,000 returns.
— The IRS is taking longer to respond to taxpayers about proposed adjustments in their tax liabilities. The agency received about 8.4 million letters from taxpayers in the fiscal year. At the end of the year just over half were more than 45 days old. Ten years ago, 12 percent were that old and 28 percent in fiscal 2010.
–The IRS recently announced it will only answer “basic” tax law questions on the phone and at walk-in sites during the upcoming filing season. And after April 15, it will not answer any tax law questions, including from taxpayers who get filing extensions until Oct. 15.
Colleen Kelley, president of the National Treasury Employees Union and a former IRS employee, called for more funding from Congress.
“All the numbers that should be going up—taxpayers helped, calls answered, tax issues resolved, training completed—are going down while all the numbers that should be decreasing are rising—identity theft cases, telephone wait times, delays in answering letters,” Kelley said in a statement.