Most Serious Problem: IRS Funding
The IRS Does Not Have Sufficient Resources to Provide Quality Service
Due to antiquated technology, a smaller workforce, and an increasing workload, the IRS cannot provide quality service without additional funding.
Between fiscal years (FY) 2010 and 2019, when the number of income tax returns increased by about nine percent, the IRS’s appropriation (after adjusting for inflation) and number of employees declined by more than 20 percent. As a result, in FY 2019, telephone assistors answered only about 29 percent of the calls the IRS received, and most of the IRS’s adjustments correspondence in open inventory had not been answered within the timeframes the IRS has established for itself (generally 45 days).
Modern technology could improve service. For example, only a few of the IRS’s phone lines use customer callback technology, which frees callers from waiting on hold. Because the IRS lacks an enterprise-wide case management system, each function’s employees must transcribe or import information from other electronic systems, and mail or fax it to other functions.
Moreover, the IRS cannot reasonably (and should not) ramp up enforcement without additional funding for service and operations support. In calendar year (CY) 2019, the Return Integrity Verification Operation (RIVO) delayed more than seven times as many refunds as in 2017 (i.e., increasing from 219,210 in CY 2017 to 1,650,999 in CY 2019), resulting in a five-fold increase in taxpayers asking TAS for help (from 16,432 in CY 2017 to 89,584 in CY 2019). Between FYs 2018 and 2019, Automated Collection System levies increased by 114 percent (from 200,024 to 427,596) and lien filings increased by 93 percent (from 184,368 to 356,609). The IRS took these additional compliance actions without making sure there were enough telephone assistors to handle the resulting calls. Only about ten percent of taxpayers calling its lien lines reached a telephone assistor, and those who got through waited on hold for an average of 58.1 minutes in FY 2019. Enforcement actions like levies and liens can cause severe economic hardship for some taxpayers, so when the IRS takes these actions, it is critical it have the resources to assist taxpayers who call or visit the IRS.
The National Taxpayer Advocate includes legislative recommendations to address this Most Serious Problem.
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