The National Taxpayer Advocate’s 2023 Report to Congress sees a “light at the end of the tunnel.” (Photo … [+]
In its 2023 Annual Report to CongressErin Collins, National Taxpayer Advocate, writes: “We have begun to see the light at the end of the tunnel.” In fact, earlier this month, the IRS announced that it had completed the automatic adjustments to 2020 tax returns related to the unemployment income exclusion that Congress passed midway through the 2021 tax filing season. Progress is also being made on accumulating paper returns and correspondence in the IRS inventory. And, even though House leaders in Congress tried to repeal some of the IRS funding provided by the Inflation Reduction Act, additional phone service agents and in-person support staff were hired and staff telephone who was assigned to help with the document backlog is returning to his regular assignments.
Things seem to be looking up at the IRS, at least with regard to backlog paperwork and taxpayer service. Anecdotal reports on social media are even beginning to indicate that the service may be getting better for tax professionals. Collins notes, “Because tax professionals prepare most tax returns and often call with complex account-specific questions, the IRS has established a Professional Priority Service (PPS) phone line for handle your calls. In tax year 2022, IRS employees answered only 16% of PPS calls (fewer than one in six), and the average wait time for those who responded was 25 minutes.”
Collins adds that this poor service puts tax professionals in the “difficult position” of having to bill clients for the time they spend trying to reach the IRS by phone or write off that time (losing money). It should also be noted that PPS is what representatives who work at LITCs across the country use to resolve IRS issues for their clients and that poor PPS assistance affects not not just taxpayers who can afford a representative, but many who can’t Poor phone service strains the already scarce resources of LITCs, which often rely on volunteer pro bono attorneys, EAs, and CPAS, as well as paid staff to help to low-income clients.
Collins goes on to say, “Tax professionals are key to a successful tax administration…The challenges of the past three tax filing seasons have pushed tax professionals to their limits, raising doubts from clients about their abilities and creating a loss of confidence in the system. ” In fact, many tax professionals have decided to reduce the number of clients they see for both return preparation and IRS representation because of the time required to communicate with the IRS by phone. In addition, it is unclear whether or not recent IRS attempts to improve service by reducing robocall-style line-jump services have been successful.
Megan Killian, Executive Vice President of the National Association of Registered Agents, which represents nearly 60,000 EAs, recently wrote to Acting IRS Commissioner Douglas O’Donnell that the PPS “has the very purpose of providing efficiency and ease for professional has become nearly inoperable in recent weeks” and called for the IRS as “its first action to spend these [Inflation Reduction Act] funds, to immediately demonstrate a concrete improvement in the telephone situation…”
Killian points out that “the agency’s credibility is at stake.” His letter includes multiple examples of EAs making double-digit attempts to contact the PPS. He was quoted as saying a Virginia EA had not contacted the PPS in more than a year [emphasis added]. The letter also notes that the new AI-based system that was supposed to help eliminate the problem of robocalls has often had the effect of making wait times even longer. Or as one tax professional put it on social media: “Now I have to wait even longer to go offline.” One EA from Texas said, “I don’t even try to communicate anymore.”
“Do not attempt to communicate” generally means that the EA has resorted to responding to the matter in question in writing, adding to the backlog of paper correspondence the Service receives. Says Killian, “The window of opportunity for the IRS to actually show that it will use these funds to drastically improve customer service is limited, and the IRS should take this opportunity to address the phone issues head-on.”
With e-filing scheduled to open for the 2023 filing season in just over a week, one hopes that the IRS will continue to hire and train staff, and that taxpayers will not succumb to the recent scaremongering by the Republican Party and associated attempts to cut the funds provided to the service. It’s easy to hate the IRS, but it’s important to remember that Congress writes the tax laws and has been underfunding and undermining the Service for decades. Restoring confidence in the system will require funding, action, and (possibly) a little faith.
