High-income taxpayers face escalated effective tax rates as a result of new tax laws. Moreover, the...
The IRS May Put You on Hold
During the tax preparation season, business owners, individual taxpayers, and CPAs may have questions for the IRS. If you need to call the agency, be prepared for a long wait. Increased tax code complexity plus budget cuts have resulted in frustrating experiences for many callers.
In her latest report to Congress, National Taxpayer Advocate Nina E. Olson noted that the number of taxpayer calls routed to “telephone assistors” increased by 41% during last year’s filing season. Yet the number of calls answered by those phone assistors decreased by 26%. The number of “courtesy disconnects” received by taxpayers calling the IRS skyrocketed from about 544,000 in 2014 to about 8.8 million in 2015. A courtesy disconnect occurs when the IRS essentially hangs up on a taxpayer because its switchboard is overloaded and cannot handle the call. For those callers fortunate enough to get through, hold time averaged 23 minutes last year. Tax professionals ran into similar problems. The IRS has a Practitioner Priority Service line, to answer questions from CPAs and other tax preparers. In the 2015 filing season, the IRS answered only 45% of such calls, with hold times averaging 45 minutes.
More questions, more time
Why did incoming calls spike by 41% last year? Olson pointed out that the IRS “sharply restricted the availability of paper copies of forms and publications, imposing burden on taxpayers without Internet access or online literacy.” Without paper forms and publications, more people called in. Olson’s report also mentions that the IRS had to implement large portions of the Affordable Care Act and the Foreign Account Tax Compliance Act. Both laws, passed in 2010, contain provisions that raise questions for taxpayers, and those questions apparently soared last year after delayed provisions went into effect.
As demands on the IRS have risen, the agency’s budget has fallen. In 2015, the federal General Accountability Office (GAO) reported that IRS total appropriations declined from a high of $12.1 billion in fiscal year 2010 to $11.3 billion in fiscal year 2014, with an additional $346 million decrease from fiscal year 2014 to fiscal year 2015. As of this writing, still more funding cuts appear to be in store for the 2016 fiscal year. According to the GAO, some IRS business units have responded to the budget reductions by reducing staff by 16% to 30%.
For the 2016 filing season, neither a decline in complexity nor an increase in IRS funding can be expected. Therefore, callers to the IRS likely will once again face difficulty getting through to the agency. Rather than trying to deal with the IRS, you can call our office with your questions and concerns.