IRS expects to answer only 71% of phone calls this tax season

By David S. Hilzenrath
Thursday, January 7, 2010

If you call the Internal Revenue Service for help this tax season and someone actually picks up the phone, consider yourself lucky.

The agency has set a goal of answering only 71 percent of calls to its toll-free help line this year, and those fortunate enough to get through are expected to spend an average of 12 minutes on hold, according to a report released Wednesday by an IRS ombudsman.

"This level of service is unacceptable," National Taxpayer Advocate Nina E. Olson said, calling it the "number one most serious problem for taxpayers."

IRS spokeswoman Michelle Eldridge said the agency "is committed to providing the best possible service to every taxpayer," and she said the agency has been dealing with a rising volume of calls. "The bottom line is we have answered millions more phone calls in the last two years than ever before," Eldridge said.

While crediting the agency with progress on some fronts, such as confronting identity theft, the report accused the IRS of pursuing collection strategies that harm delinquent taxpayers and actually make it harder for the government to collect unpaid taxes.

The report identified a potentially major loophole in an IRS plan announced this week to regulate people who charge money to prepare tax returns, saying the plan applies only to those preparers who must sign the returns. Olson said workers who collect information from taxpayers and draft returns should be regulated even if they are not the ones who ultimately sign the returns on behalf of their firms.

And, in her annual evaluation of the IRS, Olson said that the agency appears to have overstated its success collecting delinquent taxes, a key measure of its performance. In a 2008 report, with no explanation, the IRS said it had collected $32 billion less for the three previous years than it originally had reported -- off by 27 percent. The new numbers were simply marked with an "r" -- "which, as the footnote helpfully explains, means 'revised,' " Wednesday's report to Congress said.

"This failure to highlight and explain revisions of such magnitude is inexcusable and erodes confidence in any data reporting by the IRS," Olson wrote.

A list of problems

The Taxpayer Advocate Service, which Olson heads, is a unit within the IRS that is supposed to help taxpayers resolve problems with the agency and recommend improvements in the way the IRS operates.

IRS spokesman Terry Lemons said the agency should have been clearer when it revised the collection numbers, which originally double-counted some collections. The agency is considering expanding its new regulatory plan along the lines Olson suggested, he added. The IRS also took exception to the criticism of its collection strategies.

Listing some of the agency's biggest problems, Olson said the IRS undermines its own cause by automatically filing liens against delinquent taxpayers without finding out whether the taxpayers have any property that could be attached.

The tax liens do little good if the taxpayer has no assets, Olson wrote, and they can damage the taxpayer's credit score and employment prospects. That can make it harder for the taxpayer to earn an income and pay the IRS. It can also increase the odds that the taxpayer will become a drain on the Treasury by ending up on food stamps or unemployment benefits, Olson wrote.

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