The National Taxpayer Advocate’s Preface describes many of the challenges taxpayers faced this year as well as a Taxpayer Rights and Service Assessment measuring how the agency is doing in protecting and furthering taxpayers rights and service while driving voluntary compliance.
“For the first time since I began serving as the National Taxpayer Advocate in March 2020, discussions about improving the taxpayer experience and modernizing the IRS’s information technology systems do not seem like merely wishful thinking. Realistically, however, the IRS has a tall mountain to climb to achieve its goals of rebuilding the agency, modernizing its systems, and providing the quality service taxpayers deserve.”
Section 7803(c)(2)(B)(ii) of the Internal Revenue Code requires the National Taxpayer Advocate to submit this report each year and in it, among other things, to identify the ten most serious problems encountered by taxpayers and make administrative and legislative recommendations to mitigate those problems.
This year’s report shares both good news and bad news. The magnitude of the IRS’s successes exceeded the areas of weakness in 2023, and most metrics showed the IRS made significant improvement from the depths of the COVID-19 pandemic. The IRS virtually eliminated its backlog of unprocessed original individual income tax returns (Forms 1040) and substantially improved telephone service.
However, many taxpayer service challenges remained, especially in areas that required IRS employees to process tax returns and taxpayer correspondence. Nearly half a million taxpayers waited on average 19 months for the IRS’s help resolving their identity theft issues. The IRS experienced continuing backlogs in processing amended individual income tax returns, amended business tax returns, and correspondence. These processing delays caused delays in taxpayers receiving their refunds. Additionally, the IRS struggled to balance employees between answering phones and processing correspondence. Though the IRS’s telephone service improved overall, taxpayers still struggled to get help. The IRS’s own metrics that define its telephone service success exclude the majority of calls from its calculation. For taxpayers who filed eligible Employee Retention Credit claims, they often waited six months or longer to receive their credits or refunds. The IRS must reduce the processing backlog of the claims while ensuring that it does not pay fraudulent or non-qualifying claims.
The Taxpayer Rights and Service Assessment has provided the IRS, Congress, and other stakeholders with a “report card” to measure how the agency is doing in protecting and furthering taxpayer rights and service while driving voluntary compliance. The Taxpayer First Act (TFA), passed in 2019, requires the IRS to include in its written comprehensive customer service strategy “identified metrics and benchmarks for quantitatively measuring the progress of the Internal Revenue Service in implementing such strategy.” Taxpayer customer service and taxpayer rights are inextricably linked, as evidenced by the right to quality service. The Taxpayer Rights Assessment will allow the IRS to identify areas where it must improve and measure the success of specific changes by comparing data before and after implementing the new customer service strategy. TAS looks forward to working with the IRS on the TFA implementation and future measures.
