If patience isn’t one of your virtues, then chances are – you may lose your cool this tax season.
Today, I’m addressing the declining service of the IRS.
Taxpayer service is poor and getting worse. You know its bad when the head of the National Taxpayer Advocate (an independent office within the Internal Revenue Service), Nina Olson jokingly offers the following advice: “bring your knitting, have some project to do while you’re waiting on the phone, and you may have to call a number of times if you need to get through to the IRS.”
In her annual report to Congress, Nina Olson said that consistent budget cuts over the past five years have led to a “devastating erosion of service” — an erosion that will lead to even longer waits on the phone, and delayed refunds this filing season.
Olson says it’s worse than she’s ever seen it. More individuals and businesses are filing tax returns than ever before. More than 150 million individual returns came in last year. This year, things will be more complicated for many taxpayers because of the Affordable Care Act, meaning more taxpayers are likely to seek assistance. At the same time, the IRS’ budget has been reduced.
According to reports for the week ending February 7th, the IRS answered 34 percent of its calls. For the week ending February 14th, it answered 36 percent. And for the week ending February 21st, it answered 31 percent.”
The cuts also hurt the IRS’ ability to conduct and close audits.
Since 2010, the number of IRS staff focused on enforcing tax law has fallen 15%, according to the Center on Budget & Policy Priorities (CBPP). That has resulted in fewer audits overall, and a drop in audits of high-income taxpayers and businesses. In 2013, the percentage of individual taxpayers audited fell to 0.96%, the lowest it’s been since 2006.
After reading this section of my blog, some risk-takers might feel embolden. Realizing the temptation here, let me just say this: IRS generally can go back three years in an audit. If someone grossly misstates income by 25%, the statute of limitation can stretch out to six years. And by then, the IRS could be working with a bigger budget. In addition, there are certain areas of the tax return that are subject to taxpayer abuse, which their computer systems automatically flag for an audit. Some of these audit items are initially addressed via mail correspondence generated by the IRS computer system, allowing for a like response. If sufficient documentation is provided, the audit item could go away. If not, additional documentation may be requested. Otherwise, an additional assessment could be made.
If you are tracking your refund Get up-to-date refund information using Where’s My Refund? or the IRS2Go mobile app. It’s updated once every 24 hours, and usually done overnight. It may be slow coming, but managing delivery expectations should ease your anxiousness.
If you are trying to reach the IRS regarding tax related questions, utilizing the Interactive Tax Assistant tool may be a better alternative than devoting several hours to get your questions answered.