IRS attorneys recently reviewed a scathing new report from the Taxpayer Advocate’s Office suggesting the IRS is quickly turning into a rude, machinelike agency offering little human contact with taxpayers. Despite the blistering report, Taxpayer Advocate Nina Olson told Congress it’s not all the Agency’s fault. Ms. Olson claims Congress bears some responsibility for curtailing IRS funding and dithering with tax laws like the alternative minimum tax until the last minute, a yearly occurrence that delays refunds. According to Ms. Olson, “taxpayer’s patience is being sorely tested,” and many IRS tax lawyers couldn’t agree more.
The Taxpayer Advocate’s report slams the new IRS. Like most private sector businesses these days, the Agency has become much more automated, greatly reducing the chance a taxpayer will ever actually interact with a tax agent, even during an audit. For example, a year ago 74% of all taxpayers who called the IRS spoke with a human. This year’s IRS target is 61%. In 2010, a caller would be on hold for about 10 minutes. This year the IRS goal is 18 minutes. Staffing and hours at taxpayer assistance centers are way down.
Many IRS tax lawyers say the shift to automation is especially noticeable in audits, where the Taxpayer Advocate asserts the IRS is being forced to deal with “growing responsibilities and shrinking examination resources.” IRS attorneys agree and cite the new Obama Care “penalties” as just one example of an increasing workload being pushed onto the IRS.
As with email or automated calls, the Taxpayer Advocate says the computerized approach confuses many taxpayers. Ms. Olson noted that in fiscal 2011 the IRS made 12,660,956 mostly automated contacts that “taxpayers have regarded as examinations.” But in reality only 1,564,690 were, in fact, IRS examinations. And even “real audits” have become automated, often turning a simple error into a big deal.
The Report indicates that when tax adjusters and taxpayers talk, problems are usually fixed or avoided. More often than not, when a taxpayer can actually speak with someone at the IRS there is a much higher likelihood they can find a way to address unfiled tax returns, stop wage garnishment, IRS levies, IRS liens, and workout an offer in compromise or some other payment arrangement to address the back taxes owing.
According to Ms. Olson, “automated procedures are more likely to produce inaccurate over-assessments, particularly for taxpayers who have literacy challenges or lack representation. They may also diminish end-to-end accountability by IRS employees, generate rework, burden, and other hidden costs, and leave many taxpayers unsatisfied.” So if you’re a taxpayer who has unfiled tax returns and/or owes back taxes, consider consulting a tax professional for help. A competent tax lawyer or other tax professional can go a long way towards helping you deal with a colder, more impersonal IRS these days.
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