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.