IRS SERVICE TO TAXPAYERS ON THE MEND …

On the Mend… But Still a Long Way to Go!

The National Taxpayer Advocate and professional tax advisors weigh in on progress.

The National Taxpayer Advocate Reports to Congress

The National Taxpayer Advocate Service (TAS) is an independent organization within the IRS. TAS helps taxpayers resolve problems with the IRS, makes administrative and legislative recommendations to prevent or correct the problems, and protects taxpayer rights.

TAS is required to provide an Annual Report to Congress in January of each year and a follow-up Objective Report in June. Here’s a summary update on the conclusions of both as presented to Congress by Erin M. Collins, National Taxpayer Advocate.

Annual Report to Congress – 2023

The Annual Report to Congress summarizes the ten most serious problems encountered by taxpayers each year. For 2023, the National Taxpayer Advocate has identified, analyzed, and offered recommendations to assist the IRS and Congress in resolving ten such problems. Here’s a snapshot of those findings.

Most Serious Problems Encountered by Taxpayers

1. Processing: Ongoing delays burden and frustrate taxpayers awaiting refunds and other account actions.
2. IRS Hiring, Recruitment & Training: Shortcomings in personnel issues adversely affect the quality of taxpayer service and undermines effective tax administration.
3. IRS Transparency: The agency does not provide sufficient clear and timely information to taxpayers resulting in confusion and frustration for the public and complicated internal agency oversight.
4. Telephone & In-person Service: Taxpayers continue to experience difficulties and frustration in obtaining telephone and face-to-face assistance to resolve tax issues and questions.
5. Return Preparer Oversight: Taxpayers are harmed by the absence of minimum competency standards for tax return preparers.
6. Identity Theft: Victims of identity theft face lengthy resolution delays and inadequate notices of whose returns the IRS flagged for possible identity theft.
7. Online Account Access: Digital services remain inadequate impeding efficient case resolution and forcing millions of taxpayers and tax professionals to call or send written correspondence to the IRS.
8. International: The IRS’s approach to international information return penalties Is draconian and inefficient.
9. Compliance Challenges for Taxpayers Abroad: Taxpayers abroad continue to be underserved and face significant challenges in meeting their U.S. tax obligations.
10. Appeals: Despite some improvements, many taxpayers and tax professionals continue to perceive the IRS Independent Office of Appeals as insufficiently independent.

The summary conclusion presented to Congress.

Objectives Report to Congress – Fiscal Year 2025

In her statutorily mandated mid-year report to Congress, National Taxpayer Advocate Erin M. Collins essentially confirmed the ten most serious problems encountered by taxpayers in her Annual Report to Congress earlier this year. She was encouraged in her remarks:

“For most taxpayers, the filing season is the only time they interact with the IRS,” Collins wrote. “After several years of abysmal taxpayer service during the COVID-19 pandemic, the IRS has now delivered two filing seasons that demonstrate the agency has restored service to pre-pandemic levels and has improved in most, but not all, areas of service. This is excellent news for most taxpayers.”

That said, the report indicates the tax-return filing season generally ran smoothly this year, but it identifies delays in issuing refunds to identity theft victims, misleading telephone measures that lead to poor resource allocation decisions, and delays in processing Employee Retention Credit claims as key taxpayer challenges. The report also emphasizes the importance of technology upgrades as the IRS seeks to modernize its operations in the coming years.

Tax Professionals Perspective

A recent article in the Journal of Accountancy  summarizes the results of its annual American Institute of Certified Public Accountants (AICPA) survey about IRS customer service. The overall impressions from the survey were that satisfaction with IRS services is improving, but inconsistencies and concerns remain, including:

• The IRS answered calls quickly, but many calls experienced extended waiting times when they were transferred.
• The quality of service varied from agent to agent, and issues often remained unresolved.
• The IRS lacks accountability for its mistakes, causing frustration.
• Employees of TAS have a backlog of cases, indicating systemic delays in addressing taxpayer concerns.

Top concerns for the 2025 tax season include the effect of late legislative changes (29% of respondents); IRS processing delays (27%); political distractions affecting IRS funding and administration (22%); and lack of clarity/guidance from the IRS in technical areas (17%).

Takeaways

• Clearly, there is consensus by both TAS and tax professionals that things are getting better, but there’s plenty of altitude yet to climb to remedy IRS shortcomings. To contrast and compare IRS progress, click here for our last article on the deficiencies and “fixes”.

The foregoing is meant as an overview only. Give us a call and we’ll help you
determine next steps regarding any problems you face with the IRS.