TAS Not Happy with IRS Future Plan

TAS Not Happy with IRS "Future Plan"

The IRS is devising nefarious plans behind our backs. According to the National Taxpayer Advocate’s (TAS) annual report to Congress, for the past year and a half the IRS has been developing a “future state” plan whereby it will drastically cut back on the face-to-face and telephone assistance it provides to taxpayers. This isn’t really new; the IRS has for some time now been trying to redirect taxpayers and point them towards irs.gov to find answers to their questions because they don’t have sufficient funding and they don’t have sufficient personnel to provide one-on-one help to everyone who seeks it. The only difference now is that they appear to be doing something about it, albeit secretively.

Implicit in the plan — and explicit in internal discussion — is an intention on the part of the IRS to substantially reduce telephone and face-to-face interaction with taxpayers.

~ TAS 2016 Annual Report to Congress

Nina Olsen, head of TAS, stated that these plans should be made public so that taxpayers and tax professionals can have their voices heard and so they can be prepared for whatever changes come their way. Also, she says, the IRS needs to be specific about how much it will be cutting back on personal service. So far the IRS has done nothing to make their “future state” plan public or to solicit comments and input from stakeholders.

The IRS contends that TAS is misjudging their “future state” plan. According to the IRS, as they beef up alternative “self-service interactions,” it frees up phone lines for those who are not comfortable with online resources. The problem with this line of thinking is it assumes that those who call the IRS are not comfortable with researching their issue on the IRS website. I think the number of people who avoid the IRS website because they don’t have a computer or they don’t know how to research an issue online is relatively small. If people have specific questions and they think they can find the answer online, they’ll look online. But if they need a dialogue or if they have a series of question, or if they have a unique set of fact (which is very common), or if they need something more than a cookie cutter black & white answer, then they turn to the phone. I have been involved in the tax industry, and more specifically tax resolution, for about 10 years, and can confidently say that if there is any chance I can find the help I need on the IRS website, I will definitely go there before dedicating an entire afternoon to the IRS telephonic abyss.

Taxpayer Advocate Says IRS Needs to Shift Focus Away from Collections

National Taxpayer Advocate, Nina Olson, recently submitted her mid-year report to Congress.  It is nothing incredibly new, I suppose, except that IRS’ 2015 tax season numbers are completely off the charts (and not in a good way).  Here are some key points:

  • 8.8 million dropped calls due to switchboard overload
  • only 37% of customer service calls were actually answered
  • average hold time was 23 minutes
  • less than 10% of customer service calls answered during peak of tax season

Olson’s preface is a pleasure to read.  Its brilliant, and yet so simple.  She acknowledges the lack of funding that the IRS has had to deal with over the past few years, and she astutely points out that, while difficult, periods of famine (so to speak) can be healthy if they cause you (or an organization such as the IRS) to rethink its priorities and to rethink the way funds are allocated.  The operative phrase here is that it can be healthy.  In her own words:

But from a taxpayer perspective, I am concerned its long-term approach is headed in the wrong direction. First, the IRS continues to view itself as an enforcement agency first and a service agency second. Enforcement is important, of course, but it is a question of emphasis and self-definition. Second, the IRS’s vision of the future rests on a mistaken assumption that it can save dollars and maintain voluntary compliance by automating taxpayer service and issue resolution and getting out of the business of dealing with taxpayers directly in person or by phone.

What the IRS should do during this period of congressional distrust and resulting inadequate funding is examine every one of its underlying principles. In my view, it should transform itself as a tax agency from one that is designed around nabbing the small percentage of the population that actively evades tax to one that aims first and foremost to meet the needs of the overwhelming majority of taxpayers who are trying to comply with the tax laws.

The truth is, most people pay their taxes voluntarily, but the IRS has always been laser focused on collection and enforcement.  Olson is right.  As the IRS continues to put taxpayer service on the back burner, the whole idea of voluntary compliance becomes more tenuous.  And I don’t think Olson is saying that enforcement has no place in our tax system.  There will always be a need for enforcement.  But the focus needs to shift so that it is not the top priority.

One of my mentors taught me how to operate a well-balanced law practice.  He taught me to see it as both a service and a business, and to never lose sight of both.  If you focus too much on the business, then you do your clients a disservice.  And if you fail to give attention to the business aspects, then you won’t earn a decent living.

The IRS is really no different.  As Nina Olson said, they are too focused on the “business” of enforcement and the service side is suffering.  But the great thing about both a law practice and the IRS is, when you give enough attention to the service aspect so that the clients/taxpayers are satisfied, the revenue will come.

IRS Fails Taxpayers Again in 2015

Based on the interim report published by the Treasury Inspector General for Tax Administration (TIGTA), the IRS achieved a 38.5 percent Level of Service and a 24.6 average hold time on IRS phone lines during the 2015 filing season.  I don’t really know what Level of Service entails, but I know that 38 percent is really only good if we’re talking batting average.  You may be wondering, “How do you get such a low score?  I could probably score higher than 38 percent on a test by guessing.”  Well, this is how: you get 45.6 million phone calls and you answer only 4.2 million of them.  BAM.  Done.

Read the report.  It will make you cringe.

FTB Call-Back Service

There are many things that the California Franchise Tax Board (FTB) does that I would hope the IRS never adopts.  But some might appreciate it if the IRS would follow the example of the FTB when it comes to their customer service phone lines.

Clearly the IRS could never deliver the same level of customer service as a state taxing entity, due to the insanely large number of calls that IRS gets each day.  I don’t think anybody really expects them to compete on that level.  Likewise, it is naive to think that the state should be able to answer every call as it comes in without leaving taxpayers on hold.  However, FTB has figured out a way to make it much more convenient for the caller.  The FTB phone system has a feature that allows the taxpayer to request a call-back during times of heavy call volume.  The system estimates about how long you’ll have to wait on hold if you choose to hold, and then gives you the option of leaving your name and number and having a customer service rep call you back during that same time frame.

This call-back feature is handy for tax attorneys and tax practitioners, but it is especially useful for unrepresented taxpayers.  I have used the call-back feature a few times, but I typically do not mind holding either.  I often have a handful of cases that are queued up and ready to go once they pick up, and while I wait there’s always Instagram and TIGTA reports, but mostly Instagram.  But taxpayers calling in on their own case can be really discouraged by a 30+ minute wait, and it is nice to have the option of saving your place in line without actually waiting on the line.

I understand the administrative burden this feature would cause though.  It’s not a huge amount of extra work, but even a little extra work on such a large scale can be reason enough to just maintain the status quo.  IRS customer service has really gone down the toilet in the last few years, so really status quo wouldn’t seem too awful right about now compared to any additional slippage in service.

Short Hold Times at IRS Today

Modesto, CA

I only spent about two minutes on the phone with the IRS today.  That’s a first.

I was on and off just like that, and then I went on with my day.  The reason why it was so quick is because THEY DIDN’T TAKE MY CALL.  You know things are bad when they won’t even allow you to wait on hold.  Last week we were experiencing two hour hold times.  Actually, it could have been longer, but the longest I waited (and still didn’t get help) was two hours.  But this week they don’t even want you to bother holding.  After selecting my topic (“discuss a client’s tax account”) the recording on the Practitioner Priority Line states something like “We’re sorry, but due to extremely high call volumes and the topic you requested, we are unable to take your call at this time.  Please try again later, or on the following business day.”

It has always bothered me when I am in a store asking for help or waiting to make a purchase (almost any type of store; they’re all basically the same) and then the phone rings, and the worker immediately picks up the phone and helps the caller despite the fact that I am present in the store.  I have noticed that they will normally give preference to the caller over the person who is there in person.  Not so with the IRS.

Well, to be fair, I don’t think they get foot traffic at the IRS call centers.  I’m pretty sure that the call centers are just for calls and the walk-in centers are just for walk-ins and appointments.  But realizing this only makes me madder that they can’t answer my call.  They don’t have to divide their attention between callers and walk-ins.  There’s no excuse!  HOWEVER, as much as I love to complain about the IRS and the pathetic state of their call centers, I like my chances on the phone even better than at our local office.

If anyone near Modesto wants to take their chances at the IRS local office, be my guest.  They are at 1700 Standiford Ave. and they are open Monday through Friday from 8:30 to 4:30.  And the Sacramento office is still at 4330 Watt Ave.  Same hours of operation.

The IRS is Confused Enough on their Own; Don't Make it Worse

Modesto, CA

Good thing I have this blog as a place to vent my frustrations with the IRS.  It has been like my therapist over the years.

I can really identify with Robert Wood’s article today about 1099 forms.  It was obviously written from the perspective of a seasoned (and perhaps a bit jaded) tax veteran who doesn’t really trust the IRS to get things right.  Basically Mr. Wood is of the opinion that if you do not receive a 1099 that you expect to receive, you might want to think twice before calling and asking for it.  Why?  Because you don’t need the actual form in order to file your taxes, as long as you were conscientious enough to track all of your income independently.  You just need the figures.  And if you happen to request a copy of something that was already issued, or is already queued up to be issued, there is a real chance that the 1099 could be sent out twice.  Of course if you get a duplicate 1099, you are smart enough to recognize it as a duplicate, but the same cannot necessarily be said for the IRS.  And if the IRS counts double the income, then there’s a problem.

Yes, it can be very frustrating dealing with the IRS.  All that hype about how difficult the 2015 tax season will be — I don’t think it’s hype.  When calling IRS service centers, I am witnessing hold times that are longer than I can ever remember.  I recently spent an hour and a half on hold with three different phone reps trying to get through to the Collections Department (ACS).  I dialed ACS directly, but each time I was told that I had not reached collections.  I think what happens is, if the phone lines are extra busy, callers are automatically re-routed to non-ACS service centers.  But the system doesn’t alert you when it is doing this, so you are forced to wait until somebody picks up.  In my experience, the Practitioner Priority Service line is not any better.

I’m done venting now, thanks for listening.   See you next week my therapist-blog.

2015 Filing Season Won't be Pretty

Those who would know best are saying that we need to be prepared for one of the worst filing seasons on record during the first quarter of 2015. What makes one filing season worse than another?  It has to do with the level of service that the IRS can provide to taxpayers.  How fast can they answer the phone when taxpayers call?  How fast and accurately can the IRS respond to taxpayer correspondence?  How efficiently will the IRS be able to process tax returns and refunds?

The IRS had a goal of answering 80% of incoming calls last season, but only managed to answer 72%.  This filing season it is predicted that the IRS may only be able to pick up 53% of the time with a 34 minute average hold time.

The IRS Commissioner, John Koskinen has identified a few main reasons why things look so bleak:

  1. The IRS doesn’t have enough money to operate the way it should.  Funding levels are lower than they have been in years.
  2. The IRS has been tasked with administering new programs such as the Affordable Care Act and the Foreign Account Tax Compliance Act with no additional funding from Congress.
  3. Implementation of a new voluntary return preparer oversight program will also increase work load for IRS employees.
  4. There are 50 or so “tax extenders” — laws that Congress needs to vote on and determine if they will be extended or not.  The uncertainty could delay the start of the 2014 tax season.

National Taxpayer Advocate, Nina Olson, has a way of stating things in the plainest terms.  She has generated some great sound bites over the years.  Here’s her take on the upcoming tax season:

The filing season is going to be the worst filing season since I’ve been the National Taxpayer Advocate {in 2001}; I’d love to be proved wrong, but I think it will rival the 1985 filing season when returns disappeared.

I think these viewpoints have been colored by a recent TIGTA report that highlights “unfavorable trends” with the Automated Collection System (ACS).  Because the IRS does not have the resources to work cases properly, they have been “punting” many of them into Currently Not Collectible status or into the “queue” where cases can sit idle for months or years.  Consider yourself fortunate if you don’t have to interact with the IRS this tax season other than to file your return and wait for a refund check.

IRS Worker Suspended for Violation of Hatch Act

You know the statistic about what percentage of your life is spent sleeping?  Does it shock you just a little bit and make you want to sleep less?  That’s the way I feel when I think about what percentage of my life is spent talking (or waiting on hold) with the IRS.  I could probably figure it out, but I would rather remain ignorant of those details.  Well, even after having logged hundreds or thousands of hours with them, I can honestly say that I have never been asked to support any particular political candidate.

Recently an IRS call center employee was suspended for 100 days after the US Office of Special Counsel (OSC) determined that he/she had violated the Hatch Act by engaging in partisan political activity while on the clock.  This particular worker encouraged callers to vote for Obama on taxpayers’ dime.  This “encouragement” came in the form of some kind of chant based on the spelling of the employee’s last name.  I would love to know what this sounded like, but exact details were not given.  In fact, IF ANYBODY CAN PRODUCE AUDIO OF THE IRS EMPLOYEE WHO PROMOTED OBAMA’S CANDIDACY BY RECITING A CUTE LITTLE CHANT AT THE END OF EACH CALL, PLEASE CONTACT ME IMMEDIATELY.

There have been plenty of times when I thought that the IRS representative was getting a bit too chummy with me.  I really don’t mind that; I like to see that they are enjoying their job.  But I wouldn’t want to see them get in trouble.  The worst I’ve heard is when they start bashing the IRS and complaining about their job, their equipment, other IRS departments, their flawed internal processes.  That actually happens fairly regularly.  As far as I know there is nothing illegal about this kind of behavior, but I don’t imagine a supervisor would appreciate hearing it.

The real controversy in this story is that the OSC investigation actually resulted in the termination of a postal worker who violated the Hatch Act, whereas the IRS worker was only suspended.  There are significant differences in the facts of each case.  You be the judge and read about those differences here.

Testing My Theory

Apparently it wasn’t only me who thought the new Practitioner Priority Service (PPS) guidelines were ambiguous.  I don’t think the PPS customer service reps understand them either.  The best I could tell, I thought that they would be checking qualifications more closely, maybe even refusing to speak with anybody lacking a duly executed power of attorney.

It wasn’t long before I was able to test my theory.  Here’s how my first post-Jan. 6th PPS call went:

IRS: “How can I help you today, Mr. Wetenkamp?”

ME: “It’s my first call on this case; can you just give me an account overview such as balances due, missing returns, collection status, etc.?”

IRS: “Oh no, we can’t help you with that sort of thing anymore.  As of January 6, 2014 we are only allowed to assist you with active tax issues.”

ME: “WELL THEY DO OWE TAXES, DON’T THEY?!”

IRS: “Uh, . . . well, . . . yes.”

When the IRS makes informal procedure adjustments it is usually impossible to tell how they will materialize at the individual call centers.  For one thing, call center managers do not always interpret internal memoranda uniformly, so it is common to have slight variations from one city to the next.  But even if all IRS managers agreed, something inevitably gets lost between the team meeting where the memo is thoroughly explained and the cubicles of IRS rank and file.  You’ve probably heard anecdotally that the IRS doesn’t follow its own rules.  Well, this is precisely where it comes from and it happens every single day.

 

IRS Stat Interpretation

I always find it interesting that when the IRS comes out with new statistics, they try to distort them ever so slightly to appear more in their favor.  Or the IRS will highlight one thing and downplay another.  Most of the time it’s hard to see what benefit they find in this.  Here is an example I found on the News & Events page of the IRS website that compares data from May 10, 2013 with data gathered at this time last year.

The article bears the title “More Taxpayers e-file from home in 2013,” which also happens to be the first distortion.  There are a number of statistics on this page, including the drop in number of refunds issued, the drop in refund dollar amounts, and the drop in total money refunded countrywide.  That’s a pretty important statistic, isn’t it?  And never mind the fact that the total number of tax returns received so far has dropped as well as the total number of tax returns that have been processed.  That kind of information could have made an equally relevant title, right?

And the most drastic percentage change (in this news release) from 2012 to 2013 was regarding irs.gov visits.  As of May last year, 255,269,615 people had accessed the IRS website looking for information about their individual tax questions.  This year that number climbed to 318,408,842.  That’s a 24.7 percent increase!  This was also a stat that the IRS liked because they flagged it and noted that “More people are using IRS.gov to get answers, file their returns and resolve issues.”  But are they really obtaining a positive result on the website?  This is the way I interpret the stat: the IRS can’t take many taxpayer calls because there is not enough money to hire the right number of personnel, so people have resorted to finding things on their own on irs.gov.