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Taxpayer Advocate Echoes Ways and Means, Calls on IRS to Put Taxpayer First

July 16, 2015

In April, the House Ways and Means Committee released a detailed report that revealed the IRS had deliberately diverted funding away from taxpayer assistance, leading to dreadful customer service this filing season. Now, Nina Olson, the National Taxpayer Advocate, is calling on the IRS to recommit to serving the taxpayer. Echoing many of the findings by Ways and Means, Olson said yesterday that the IRS should “transform itself” and focus more attention on customer service. 

In her annual report to Congress, Olson found that “the IRS reallocated about $133 million in user fees from Taxpayer Services to its Operations Support account.” As a result, though it “received and processed most tax returns in a timely manner . . . the large segment of taxpayers who needed to interact with the IRS personally did not fare nearly as well. Very simply, these taxpayers did not receive acceptable levels of taxpayer service.”

As the Washington Post reported, “The Internal Revenue Service hung up on customers calling for help 8.8 million times this year, showing just how low service sank during tax filing season.” Olson’s report explains in greater detail how the funding decisions of the IRS led to dramatically different levels of service this year than previous ones:

“One basic system limitation results in what in IRS parlance is known as a ‘courtesy disconnect.’ When the IRS switchboard is overloaded and cannot handle additional calls, the IRS essentially hangs up on callers. The number of courtesy disconnects skyrocketed this filing season as compared with prior years, rising by more than 1,500 percent from about 544,000 in 2014 to about 8.8 million this year.”

Olson’s concerns are similar to those expressed by the Ways and Means Committee for months. The Ways and Means report from April outlines extensive evidence that the IRS has deliberately diverted its own funding away from customer services for taxpayers. Some of the findings in the report include:

  • The IRS made a 73 percent reduction in user fees allocated to customer service.
  • The IRS spent $12 million of taxpayer services money on Obamacare implementation.
  • The amount of time IRS employees spent on union activity would allow for over 2 million additional taxpayer-assistance calls.

This all helps explain why, as Olson wrote, “millions of taxpayers were unable to reach the IRS by phone; millions did not receive a timely response (if any) to their correspondence; and many more may have had to pay a tax preparer or professional for answers to tax law questions or for assistance they could previously have obtained from the IRS for free.”

This behavior must change, and that’s why Chairman Ryan made the following statement in reaction to the Taxpayer Advocate’s report:

“IRS needs to remember who it serves: the taxpayer. Customer service must be a top priority, not an afterthought. This committee is going to continue to hold the IRS accountable and demand change until it gets the message.”