The Internal Revenue Service, which saw its workforce dwindle steadily from 2010 to 2015, says a modest budget increase has left it better equipped to respond to the tens of millions of Americans expected to call with questions during the just-opened tax season.
But compared to what?
The bar could hardly be lower, according to a recent General Accountability Office report that has elicited concern from lawmakers in Maryland and other states.
The tax-collecting agency, which saw its funding cut by 10 percent from 2010 to 2015, “provided the lowest level of telephone service during fiscal year 2015 compared to prior years, with only 38 percent of callers who wanted to speak with an IRS assistor able to reach one,” the GAO said.
The GAO said average wait times have nearly tripled since the 2010 fiscal year, rising to more than 30 minutes last year. The IRS also “struggled to answer correspondence in a timely manner,” the report concluded.
“Reaching an IRS employee often seems as unlikely as winning Powerball,” said Rep. Kevin Brady, the Texas Republican who chairs the House Ways and Means Committee, after the report was released Jan. 14.
The committee has accused the IRS of making poor choices. It said in a staff report last year that the IRS had cut customer service and devoted large sums to implementing President Barack Obama‘s health care law. The report said the agency shifted too many customer service workers to answering correspondence instead of answering phones.
Democrats appeared equally concerned about the state of taxpayer service but assessed the causes differently.
“I am very aware of IRS customer service shortcomings, having heard serious concerns from individual constituents and organizations representing Maryland tax professionals,” said Sen. Ben Cardin, a Maryland Democrat.
“The IRS has been forced to do more with less for years because of short-sighted, Republican-led budget cuts, so the decline in service is somewhat unsurprising,” Cardin said in an email. “But it is also unacceptable, and I have joined my Senate colleagues in calling for clear plans to right these wrongs.”
Tax season began Jan. 19, the day the IRS began accepting individual electronic returns. Taxpayers have until April 18 to file — three days longer than usual because Washington will mark Emancipation Day on April 15.
The agency’s annual appropriation was cut from $12.1 billion in 2010 to $10.9 billion in 2015, a drop of roughly 10 percent. With inflation factored in, the drop was 19 percent, according to National Taxpayer Advocate Nina E. Olson, who operates independently within the IRS.
The IRS reduced the number of staff members answering telephones and correspondence by 9 percent, according to the GAO, from about 12,500 to 11,400 full-time equivalents from 2014 to 2015.
Congressional Republicans say budget cuts were needed to curtail unsustainably high spending and respond to waste and mismanagement at the agency.
Relations between the House and the IRS have been further strained by GOP opposition to Obama’s Affordable Care Act. Because the act has large tax implications, the IRS is central to the law’s implementation.
The Ways and Means staff report accused the agency of prioritizing the act over other important activities, “including core responsibilities like taxpayer assistance.”
In another area of tension, Republicans accused the agency last year of unfairly targeting conservative groups seeking tax-exempt status.
In response to questions about customer service, the IRS referred a reporter to its reply to the GAO findings. In the response, Deputy Commissioner John R. Dalrymple cited budget strains.
“We are currently operating with a budget that is $1.2 billion less than the amount appropriated in fiscal year 2010 and with about 15,000 fewer employees,” it said.
The agency has about 80,000 employees.
Dalrymple said the agency is exploring a plan to allow taxpayers to maintain online accounts — similar to those offered by banks— to obtain information about taxes.
Olson applauded the concept of online accounts in her Jan. 6 report to Congress. But the taxpayer advocate said the agency should not assume that increased online interactions would address “a high percentage” of taxpayer needs.
“Implicit in the plan — and explicit in internal discussion — is an intention on the part of the IRS to substantially reduce telephone and face-to-face interaction with taxpayers,” she said in her report.
In reply, the IRS issued a statement: “The IRS remains fully committed to personal service to taxpayers, and the IRS believes increasing the availability of self-service interaction frees up in-person resources for taxpayers who truly need them, including those who are not comfortable online or don’t have personal access to a computer,” the agency said.
It said its long-term initiatives “are ongoing and have not been finalized, and the IRS emphasizes feedback from outside parties has been and will continue to be an important part of the process.”
The IRS budget rose by $290 million, or 3 percent, this year. The agency says the increase should help customer service. The IRS expects to receive more than 150 million individual returns this year.
Even with the budget increase, taxpayers who need agency help are being advised to get their questions in early.
“Taxpayers to face challenges in 2016” is the headline of a recent news release from the National Treasury Employees Union, which represents IRS employees and others.
“Taxpayers can expect some improvement in 2016,” said union President Tony Reardon, “but they should still brace themselves for dropped calls, extended hold times and long lines.”