Frustrating Courtesy Disconnects
The 2015 tax filing season is over, and according to a mid-year report to Congress presented by National Taxpayer Advocate Nine E. Olsen, it was a successful year for those who needed no help, but pretty dismal for those who sought assistance. According to her report, there were 8.8 million instances of customers calling for help and being hung up on – this represents an enormous increase over the number of these occurrences in 2014, when only 544,000 callers were disconnected.
The hang-ups did not take place mid-call. They were what is known as “courtesy disconnects,” and they happen when the IRS switchboard gets overloaded and calls are disconnected without having been answered. From 2014 to 2015 the number of these hang ups increased by a whopping 1500 percent – a statistic that is a stark indication of how service levels fell from previous levels.
Despite the drop in the availability of assistance, the agency was still tremendously busy. They processed 126.1 million individual federal income tax returns, and among those almost 92 million filers received refunds. This is an increase of about half a million returns processed, though about 3 million fewer refunds. There was a small increase in the average refund received between 2015 and 2014 with the average jumping from $2686 to $2711.
One of the reasons that so many people sought help in 2015 was the introduction of new filing requirements under the Affordable Care Act. The new filing rules presented may challenges, as did other changes in the tax code, and though taxpayers tried hard to get help in preparing the returns, roughly nine million of those who called the IRS assistance line were greeted by a dial tone instead of by the ability to talk to a customer service representative.
According to Olson’s report, much of the difficulty that the IRS had in offering assistance was the result of a significant drop in resources for the agency. Their budget was approximately 17 percent lower than it was in fiscal year 2010, including an inflationary adjustment. When you add the drop in funding to the additional complications of both the ACA requirement and the implementation of many parts of the Foreign Account Tax Compliance Act (FATCA), there was little surprise at the difficulty in providing the service that people sought. Olson reported that, “For the segment of taxpayers who required help from the IRS, the filing season was by far the worst in memory.”
The statistics presented painted a grim picture of frustration and long wait times. The number of calls received by taxpayers seeking help from agents increased by 41 percent over those fielded in 2014, and average call length also increased, going up by ten percent. Despite this demand, the number of calls that actually reached IRS agents dropped by more than 25 percent, meaning that just over one third of all of the calls directed at the IRS by taxpayers were actually answered – and those who got through first had to wait an average of 23 minutes. Compare this to 2014, when 7 out of ten taxpayers were able to reach agents, and only had to wait 14 minutes to speak with them, and it is no wonder that this year got such bad marks.
When gauging the performance of the National Taxpayer Advocate toll-free hotline, the average caller that was able to get through waited 19 minutes, and only 39 percent of the calls placed were successful. The Practitioner Priority line, which is offered to tax professionals, was slightly more successful with 45 percent of calls placed being answered, but those calls had average hold times of 45 minutes. As much frustration as these statistics represent, they pale in comparison to what was experienced by people who received notifications that their tax returns had been blocked by the Taxpayer Protection Program as a result of possible identity theft – those taxpayers waited an average of 28 minutes on hold, and only 17 percent actually got through. During the tax filing season there were three consecutive weeks when less than ten percent of these calls were actually connected to an agent.
When trying to determine where the fault lays for this dismal performance, there is plenty of blame to go around. Congress bears some responsibility, as it imposed severe cuts to the IRS operating budget. But the IRS also instigated some of the problems. The paper forms used by IRS Taxpayer Assistance Centers and outlet partners, which are situated in local post offices and libraries, were not sent out until late February, and once these support centers depleted their supply there were no more available. Some support centers never received the paper forms. This made it very difficult for those taxpayers who do not have access to the Internet or personal computers, and it is this group that generally receives tax refunds.
In addition to these problems, Olson also indicated that the agency tends to focus on compliance with tax regulations and enforcing the tax laws, and this results too low a priority being placed on customer service and assisting taxpayers. Though enforcement and prosecution of tax cheats gets a lot of attention in the press, it actually accounts for less than two percent of the agency’s revenues, while over 98 percent of taxpayers pay the correct amount on time and without having to be pursued. Olson’s report indicates that this results in those who are trying to work within the system being met with unnecessary challenges, and might be working against the IRS’ overall effectiveness. “This focus has all sorts of consequences for the vast majority of taxpayers who are willing to comply, not the least of which is that they bear an increased burden in navigating processes designed for evaders. That is unwise, counterproductive, and expensive.”
In response to Olson’s report, the IRS provided comments from the 2014 Taxpayer Advocate’s Report, as well as some additional remarks. In 2014 the Taxpayer Advocates report made almost 100 recommendations and the IRS says that they implemented or are in the process of implementing about half. They added that in order to do this they will likely need more resources. It is hoped that 2016 will prove to be a less challenging tax year for taxpayers seeking help than 2015 was.
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