The Taxpayer Advocate released their mid-year report on how the tax season went. “Likening the 2015 filing season to ‘A Tale of Two Cities,’ however, the report says: ‘For the majority of taxpayers who filed their returns and did not require IRS assistance, the filing season was generally successful. For the segment of taxpayers who required help from the IRS, the filing season was by far the worst in memory.’” This is even worse than last year’s report detailed in this post – IRS doing more with less?
- IRS processed 126.1 million individual returns versus 125.6 million the prior year.
- The average refund was up slightly to $2,711 from $2,686 the prior year but about 3 million taxpayers received a refund this year.
- Hold times for taxpayers were 23 minutes versus 14 minutes the prior year.
- Sadly, only 37% of taxpayer calls were answered versus 71% the prior year. Answered means the taxpayer talked to a human and does not mean the taxpayer was actually helped.
- Supposedly the IRS Taxpayer Advocate is a taxpayer’s last hope at IRS. With hold times of 19 minutes and only 39% of calls answered taxpayers seem to have little hope.
- Tax practitioners have their own hotline to speed up service to them. Apparently 45 minutes on hold is faster than the 23 minutes non-tax practitioners received. Must be the newer “new math.” The IRS did answer 45% of tax practitioners calls which is better than for individuals but that may be because they held longer.
- IRS is trying to introduce a new term to the average American – “courtesy disconnect.” It means the IRS hung up on us. What a polite way to say “we do not care.” About 8.8 million of use were shown this “courtesy” this year versus only 544,000 last year. If you get hung up on by the IRS you can no longer even consider yourself special.
Incentivizing taxpayers to cheat?
The news release says:
Olson wrote that the decline in taxpayer service imposes increased compliance burdens on taxpayers and may lead to erosion in taxpayer trust. “For a tax system that relies on voluntary self-assessment by its taxpayers, none of this bodes well,” she wrote. “In fact, there is a real risk that the inability of taxpayers to obtain assistance from the government, and their consequent frustration, will lead to less voluntary compliance and more enforced compliance.
I read that to mean the Taxpayer Advocate would not be surprised if people throw up their hands and do what they think is best for them instead of trying to figure out the law and the forms.
Long-term plan concerns
According to the report, IRS’ long-term plan is too heavy on enforcement and too light on customer service. Additionally, the IRS’ is pushing too much online taxpayer service and cutting back on human assistance. For a hint on a better way to search the IRS website see the Website section of this post – Get IRS help by appointment.
Identity theft protection
OK your identity has been stolen and someone is using your information to get a tax refund. From my experience, this is an extremely stressful situation for most people. So how does IRS help?
If someone else uses your Social Security Number before you file, expect to wait an average of six months for a refund. If you owe, do not worry they will promptly take your payment. If an IRS’ fraud filter incorrectly flags your return, IRS makes you wait an average of 28 minutes to speak to someone and “courtesy disconnects” 83% of callers. The good news is IRS is catching more fraudulent returns before sending refunds. The bad news is IRS’ fraud filters are flagging more legitimate returns – over 600,000 this year.
Not surprisingly, there were quite a few problems caused by the new Affordable Care Act (ACA) provisions. Interestingly, the Taxpayer Advocate attributes many of them to other parties. For example, the Center for Medicare and Medicaid Services sent out about 800,000 erroneous Forms 1095-A regarding health care acquired through the ACA exchange.
Considering the 17% inflation adjusted budget cut IRS has experienced since 2010, the problems with answering the phone are not surprising. I discussed the IRS budget earlier in this post. Of course, if IRS would stop shooting themselves in the foot they could do a better job with their existing budget. A bit more money to customer service and less to enforcement might actually be profitable.