Short Hold Times at IRS Today

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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.

Some IRS News & Some FTB News

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Internal Revenue Service

The IRS expects the 2014 tax season to be delayed by one to two weeks.  That would mean the new tax season would begin somewhere between January 28th and February 4th.  The reason for the delay?  None other than the historic Fall 2013 government shutdown.

The IRS normally begins tuning and tweaking their complicated tax return processing systems in the fall, even before the start of the 4th quarter.  This year’s system testing period was delayed when the IRS closed its doors during the first half of October.  You should also be aware that the February 4th start date is only an estimate.  The IRS will re-evaluate and confirm the 2014 Tax Season start date in December.

California Franchise Tax Board

We often hear about federal tax scams, but the FTB recently sent out a warning to California residents to keep their eyes and ears open for phishing schemes and identity theft.  There is apparently a scheme which targets elderly taxpayers in Beverly Hills.  The caller, posing as a FTB employee, tells the victim that they were ticketed for a red light violation and their case has been forwarded to the FTB for collection purposes.  As ridiculous as this may sound, the IRS has been given so many additional responsibilities over the years that it’s hard to say what they may have a hand in.  So, why not the FTB too?

The moral of the story is the same as it always is for the IRS: they won’t contact you by email, and they will rarely call you without sending a series of notices first.  You need to be suspicious if either of these things happen to you.

No IRS Furlough in August

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The IRS had originally planned on five furlough days (unpaid days off) this year.  The first three went on as scheduled, the July 22nd furlough day was canceled somewhat at the last minute and turned into an optional work day, and now the final furlough day of the year (August 30th) is going to be postponed.  According to IRS Acting Commissioner, Danny Werfel, the IRS recently found ways to save money and was able to cancel the July 22nd agency-wide furlough day.  And the IRS hopes to be able to cancel the August 30th furlough too, but cannot make that determination at this time:

We have made substantial progress in cutting costs. … Our progress is such that we have decided to postpone the furlough day scheduled for Aug. 30. We still have more work to do on the budget and cost-savings, so we will reevaluate in early September and make a final determination as to whether we will need another furlough day in September.

Hopefully the IRS will continue to find ways to cut costs.  Furloughs are not good for taxpayers because they make it very difficult for taxpayers to obtain the information they seek.  Even if they are not calling on the exact date of the furlough, the backlog it creates  on the other days is somewhat of a burden.  Furloughs are obviously not good for IRS employees either.  Even if they are ultimately canceled or postponed, the mere announcement of a furlough day tends to disturb the morale and confidence of employees.

July 22nd: Optional Work Day for IRS Employees

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Tax attorneys and other tax professionals plan their work days around their interactions with the IRS.  So, when the IRS is closed on a weekday, they take note.

Earlier this year the IRS had announced a series of planned nationwide furlough days to help with its “bottom line,” one of them to take place on Monday, July 22nd.  Then a couple days ago the acting IRS Commissioner, Daniel Werfel, announced by way of internal memorandum that the agency would no longer be forcing its employees to take that day off.  The furlough scheduled for July 22nd was lifted.  However, realizing that many IRS personnel have already made plans for a three-day weekend, Werfel is allowing anyone to still take the day off if they want.

So what does this mean for tax professionals who need to contact the IRS on July 22nd?  What can we expect?

In my years of working in the field of tax controversy, I have come to realize the impossibility of trying to predict too much when it comes to the IRS.  But my guess is that Monday is not going to be the best day to call them.  Given the opportunity to take a 3-day weekend with pay, what IRS employee would come in and work (besides may the overzealous brown noser or somebody too dim to realize he doesn’t have to be there)?!  I think the IRS is going to be severely understaffed, probably to the point that it would be no different than a furlough day from taxpayers’ point of view.  And those that do go in to work on the 22nd are going to be stressed and unhelpful.  It’s probably best to wait until Wednesday or Thursday if you need to call the IRS next week.

I have noticed that one of the consequences of the furlough days thus far has been a sharp increase in hold times when trying to call into the IRS.  People that don’t get through on a furlough Monday tend to call back on Tuesday, and then Wednesday, etc.  The calls pile up just like all their other work.  These days it is not unusual to wait 45-60 minutes before the IRS picks up you call.

Long Holiday Weekends for IRS This Year

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Now that tax season is over for the on-time filers, many IRS employees can relax just a little.  And for at least 5 additional days this year they actually can relax at home . . . without pay.  Bloomberg apparently got its hands on an internal IRS memorandum informing IRS employees which days have been scheduled as furlough days this year.

The IRS furlough dates are:

  • May 24
  • June 14
  • July 5
  • July 22
  • August 30

These furlough dates were chosen to coincide with the federal holidays already on the calendar, so we will be looking at several four and five-day IRS closures throughout the rest of 2012.  I say five days because the IRS often shuts down early the day before a holiday, sometimes for computer maintenance, and sometimes so they aren’t disturbed during their potlucks.  I’ve always thought that “computer maintenance” was code for holiday party or potluck, but that’s just my slightly jaded opinion.

The IRS, as well as many other federal government agencies, is resorting to furloughs in reaction to budget reductions that took effect earlier this year.  Acting IRS Commissioner, Steven Miller, explained his reasoning for the agency-wide closures:

We came to a decision that balances our primary mission to serve the taxpayers and considers the effect on employees. We settled on having uniform furlough dates for everyone and closing down agency operations entirely. This way, the IRS can gain additional cost savings on utilities and other services in our work locations.

According to Miller, the closures will affect all local taxpayer assistance centers and call centers.  IRS.gov should be up, but the availability of online services such as Transcript Delivery Service and other IRS practitioner tools is unknown.  And, if necessary, there may be an additional two furlough days coming in August and September.  Plan your vacations accordingly.

Refund News: Some Good, Some Bad

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The Good

The IRS is sitting on $917 million in refunds for people who haven’t yet filed their 2009 tax return.  They made the announcement today via IRS Newswire.  See IRS Newswire Issue Number IR-2013-29.  If you’re wondering why they waited until 3 years later to get the word out, well it is with good reason.  As you know, if you are due a refund, the only way to claim it is to file a return; the IRS won’t just write you a check on its own initiative.  But even if you are due a refund, you can only delay so long before the money becomes property of the US Treasury.  By law, taxpayers have 3 years from the date that the return is due to file and claim a refund.  2009 taxes would have been due on April 15, 2010, so the three year mark is coming up in about 30 days.  Over 984,000 people didn’t file their 2009 return, so many of the refunds are fairly small.  But the IRS estimates that over half of the unclaimed refunds are over $500.  Therefore, it is well worth the time and expense to file it, particularly if you can claim the Earned Income Tax Credit (EITC) for that year.

The Bad

The IRS swore that delaying the start of tax season would not result in delayed refunds, but this may have been a promise that was impossible to keep.  On March 12, the IRS released the following statement:

The IRS is aware of a problem with a limited number of software company products that affected some taxpayers filing Form 8863, Education Credits, between Feb. 14 and Feb. 22. The problem resulted in those tax returns requiring additional review by the IRS.

What this means for taxpayers who expect a refund is they may have to wait 4-6 weeks longer than previously expected as the IRS looks more closely at their Form 8863.  90% of those who claimed the education credits will get their refund right on time.  The software glitch was with H&R Block, so it is only the 8863s filed by that company that are subject to further IRS review.  I guess the silver lining here is with respect to balance due returns. Tax assessments will presumably be delayed as well, which could give people some extra time to figure out how to resolve their tax debt.

Help the IRS Reduce America's Tax Burden

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You’ve probably never heard of the Taxpayer Burden Reduction (TBR) division of the IRS; few people have. TBR is led by senior advisor, Laurie Tuzynski, who recently explained her role in an official IRS video. Taxpayer Burden is defined as the time and money taxpayers spend to comply with their federal tax obligations. Here’s a perfect example: the Treasury Inspector General for Tax Administration (TIGTA) recently stated that individuals and businesses spend an estimated 6.1 billion hours per year complying with tax filing requirements.

And that’s just prepping and filing taxes!  What about the time spent by taxpayers, tax attorneys, and other practitioners in resolving tax problems?

You can help TBR identify forms, procedures, and rules that are wasteful and overly-burdensome so they can go to work trying to simplify. And the procedure for doing so is fairly simple: you just need to fill out a Form 13285-A “Reducing Tax Burden on America’s Taxpayers.” This form asks you to explain the problem, identify the stakeholders (who it is that the problem affects), and propose your solution. However, if you feel that the “Reducing Tax Burden” form itself is overly-burdensome, there is a procedure for that too! And I quote:

If you have suggestions for making this form simpler, we would be happy to hear from you. You can e-mail us at *taxforms@irs.gov.  Please put “Forms Comment” on the subject line.  Or you can write to [Tax Products Coordinating Committee].

 

Some Refunds Delayed This Tax Season

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According to the latest TIGTA audit report, there were some serious delays with the issuing of refunds this tax season, but things have already improved.  TIGTA cites “programming problems” as the source of the delays.

Our report found that the IRS is catching and preventing more fraudulent refunds and screening more prisoner tax returns; however, programming problems associated with Modernized e-File delayed some refunds, which may have contributed to a doubling of visits to the  “Where’s My Refund” feature at IRS.gov over the previous year.

~ J. Russell George, Treasury Inspector General for Tax Administration

If you tried to use the tool early in the tax filing season, you may have suspected it was broken.  I used the “Where’s My Refund” tool and found that it worked just fine (both on the IRS website and using the mobile app IRS2Go) as long as you wait the requisite 72 hours after filing your return.  Of course this was after the kinks were worked out of  the refund process.  TIGTA says that the source of the delays was found and fixed by February 18th.  So I guess it paid to delay just a little this year…

Filing OIC? Take a Number.

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The IRS has done quite a bit to promote the Offer in Compromise program during the economic downturn of the last few years, and the message is coming across loud and clear.  That’s the good news.  The bad news is the IRS can’t seem to handle the onslaught of new offers.

The Offer in Compromise (OIC) is a program whereby the IRS accepts an amount that is less than the tax liability to forever settle what is owed.  The rationale behind the OIC program is this: if the taxpayer can prove that the amount offered is the absolute most he/she can pay and the IRS will most likely never be able to collect the full tax debt, it is better for the government to cut their losses and take it rather than expend any more resources trying to collect some unknown amount at some unknown time in the future.

According to a recent audit report by the Treasury Inspector General for Tax Administration (TIGTA), there are huge OIC backlogs at both the Memphis and the Brookhaven Offer Units, but Memphis is in worse shape than Brookhaven.  The IRS is in the process of transferring cases between sites to even things out, but precious time is lost in the transfer process, so who knows if that will truly reduce delays.

Offers with the following characteristics can expect the longest delays:

  • taxpayer is self-employed
  • taxpayer earns over $100,000 per year
  • taxpayer owes over $50,000 in back taxes
  • taxpayer lives in a state handled by the Memphis OIC Unit (AK, AL, AZ, CA, CO, HI, ID, KY, LA, MS, MT, NV, NM, OR, TN, TX, UT, WA, WI, WY)