Most Serious Problem: Taxpayer Service is Poor and Getting Worse
The most serious problem facing U.S. taxpayers is the declining quality of service provided to them by the IRS when they seek to comply with their federal tax obligations. As part of the IRS Restructuring and Reform Act of 1998 (RRA 98), Congress directed the IRS “to place a greater emphasis on serving the public and meeting taxpayers’ needs.” The IRS took this directive to heart and substantially improved its taxpayer services in the aftermath of that Act. But due to a widening imbalance between the IRS’s increasing workload and its diminishing resources, taxpayer service levels have been declining.
The IRS now typically receives more than 100 million telephone calls, 10 million letters, and 5 million visits from taxpayers each year. In FY 2015, taxpayers are likely to receive the worst levels of service since the IRS implemented its current performance measures in 2001, with more than half of the calls going unanswered and hold times expected to exceed 30 minutes on average (considerably longer at peak times). The sheer complexity of the tax code increases to the demand for assistance and adds another significant barrier to tax compliance.
We believe the IRS, like any agency, can operate more effectively and efficiently in certain areas. However, we see no substitute for sufficient personnel if the IRS is to provide high-quality taxpayer service. We do not think it is acceptable for the government to tell millions of taxpayers who seek help each year, in essence, “We’re sorry. You’re on your own.”
The National Taxpayer Advocate recommends that Congress: (1) in the short term, carefully monitor taxpayer service trends and ensure that the IRS receives the oversight and funding it requires to meet the needs of U.S. taxpayers, and (2) over the longer term, undertake comprehensive tax reform to reduce the complexity of the Internal Revenue Code and the compliance burdens it places on taxpayers.
“The National Taxpayer Advocate believes the government has a moral and practical imperative to make the tax compliance process as painless as possible. Today, we are far from that goal, and we are moving in the wrong direction.”