IRS watchdog warns of scaled-back service in agency plans

The analysis by the Taxpayer Advocate Service, an independent office within the IRS, must include at least 20 of the “most serious problems” taxpayers face when dealing with the agency.

“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”, Olson’s report says. “Taxpayers and tax professionals should be advised the IP PIN listed on the CP 01A Notice dated January 4, 2016 is valid for use on all individual tax returns filed in 2016”. That plan hasn’t been made public, and Olson is urging the agency to do so and to solicit public comments. “The key unanswered question is by how much…” Taxpayer advocate Nina Olson anticipates even less telephone and face-to-face customer service in the future. “More work must be done to streamline and reform IRS operations so taxpayers can receive the help they need to pay their taxes correctly and without undue bureaucratic hassle”, the Illinois Republican said in a statement. Actually, the number is good for 2015 returns, which are filed in 2016, says the IRS.

Responding to the Taxpayer Advocate’s report, the IRS says it “does not paint a full picture” of evolving, long-term planning.

“Reading between the lines of the IRS future state vision, the IRS appears to replace traditional IRS employee-to-taxpayer interaction with online and third-party interactions”, Olson said in the preface to the report. The IRS uses IP PINs to verify taxpayers’ identities and accept their electronic or paper tax return.

For those with resources, “concierge-level service” will be available, the report said, while “the compliant or trying-to-comply taxpayers will be left either struggling for themselves or paying for assistance they formerly received for free from the IRS”.

The erosion of taxpayer service to the 150 million people and 11 million businesses that file has always been a concern of the advocate.

The IRS confirmed in a news release that the letters, which were mailed in late December, were in error.

It came largely out of necessity after five years of congressional budget cuts the IRS acknowledges have caused a significant erosion of taxpayer services. Some of the filters used by the IRS to detect fraud have a high false-positive rate, the report said. But for three straight weeks during last year’s filing season, fewer than 10 percent of taxpayer calls about those flagged returns were answered.

“Processing claims promptly and returning taxpayer refunds immediately is my number one priority as Comptroller”, Franchot said. The changes are meant to help protect users from fraud.