Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek


Filed under: News


Report To Congress: IRS Is Increasingly Unable To Meet Taxpayer Needs

Jan 9 2014, 10:56pm CST | by

10 Updates
Report To Congress: IRS Is Increasingly Unable To Meet Taxpayer Needs
Photo Credit: Forbes


Full Story

Report To Congress: IRS Is Increasingly Unable To Meet Taxpayer Needs

When Congress threatened “right-sized” budget cuts for the Internal Revenue Service last July, it was a clear swipe at the agency which had been under fire following a number of scandals. House Appropriations Chairman Hal Rogers (R-KY) announced that the cuts would be in place at IRS “until there are clear signs that they have fixed their broken bureaucracies, curtailed lavish spending on employee conferences and awards, and returned to abiding by the will of Congress.”

It was meant to punish IRS. What it did was punish taxpayers.

That was clear today after National Taxpayer Advocate (NTA), Nina E. Olson, released her 2013 annual report to Congress. The annual report is required under Section 7803(c)(2)(B)(ii) of the Internal Revenue Code: under the terms, the NTA must identify at least 20 of the most serious problems encountered by taxpayers and make administrative and legislative recommendations. Tops on Olson’s list? Concern that the IRS does not have the resources to serve taxpayers – and it’s getting worse.

In 2013, nearly four in ten taxpayer calls went unanswered. The IRS only answered 61% of calls from taxpayers. That’s down sharply from a decade ago, when 87% of calls were answered. Olson noted that half the decline had occurred since 2010.

Those taxpayers who did get through were forced to wait. And wait. And wait. The average wait time for taxpayers hoping to speak to a customer service representative at IRS was 17.6 minutes. That’s more than six times the wait from ten years ago when taxpayers had to hold just 2.6 minutes.

More than half of all written correspondences sit unanswered after 45 days.

And don’t bother stopping by: while the IRS answered some 795,000 tax law questions a decade ago at its walk-in sites during the filing season, last year, it handled just 110,000 tax law questions. This year, they’ve announced they’ll only answer “basic” questions during the tax year and none at all after that. Olson wrote that “it is a sad state of affairs when the government writes tax laws as complex as ours – and then is unable to answer any questions beyond ‘basic’ ones from baffled citizens who are doing their best to comply.”

You can completely forget personal assistance. The IRS recently announced it won’t prepare returns at all, citing a decline in resources. It was one of a number of cutbacks at the agency.

What accounts for the cuts in service? The report notes that IRS’s workload has increased while IRS funding and staffing have been cut. And even more work is on the way. There are new taxes, Foreign Account Tax Compliance Act (FATCA) deadlines and challenges administering those “shared responsibility payments” under the new health care law.

So we’re shoveling on more work. And we’re cutting resources.

But that’s okay, right? Because we’re saving tax dollars with those cuts, according to Congress.

Only not so much. Last year, the IRS collected $255 for each $1 it received in appropriated funds. That’s a substantial return on investment (ROI). Cutting back funding dollars means reduced revenues. In other words, cutting collections budgets means that there’s less in the pot for everyone. In particular, Olson notes that “[f]or virtually every other spending program, a dollar spent is just that – it increases the deficit by one dollar. But a dollar spent on the IRS generates substantially more than one dollar in return – it reduces the budget deficit.”

Olson says that the individual pieces of the bigger struggle merely overshadow the “major problem facing the IRS today — unstable and chronic underfunding that puts at risk the IRS’s ability to meet its current responsibilities, much less articulate and achieve the necessary transformation to an effective, modern tax agency.”

The report wasn’t all daggers and darts at Congress for reduced funding. Olson did point out a number of other challenges for IRS to tackle including ongoing issues with the title="IRS Beats A Dead Horse, Argues For Regulations At Appeals Court">regulation of return preparers ; identity theft ; hardship levies; refund fraud and return preparer fraud . Olson also called out collections problems – including statute of limitations issues – as a significant challenges. Olson also hit on some problems that continue to make news, including problems with the Exempt Organizations application process (like you didn’t see that one coming); new ways of administering Individual Taxpayer Identification Numbers (ITINs) ; offshore disclosures; FATCA compliance, taxing digital currency like Bitcoin and compliance for same sex couples who are now married .

Throughout the discussions, Olson tries to make clear that the series of short-term solutions thrown at these problems “merely patch over problems and impose unnecessary burden and even harm on taxpayers.” The result is simply more work and more waste. What Olson favors is stability through increased funding, better training and what she refers to as a Taxpayer Bill of Rights./>/>

(Olson also zeroed in on the most litigated issues at IRS. I’ll admit it: that was my favorite bit in the report. Rather than throw a bullet list at you, I’ll follow-up tomorrow with a separate article.)

It’s not a short list. Or a short read. But it’s worthwhile. You can check out the entire report here .

Be prepared, though: it’s not all bad. There is some good news. The report reminded Congress that a whopping 98% of all tax revenue collected by IRS is paid voluntarily. A mere 2% is the result of IRS enforcement actions. That means that for all of those bad stories you read – and there are a lot of them – most taxpayers are trying to do the right thing. And you know what that means? We deserve better than we’re getting.

Want more taxgirl goodness? Pick your poison: You can receive posts by email , follow me on twitter (@taxgirl ) hang out with me on Facebook and check out my YouTube channel . You can also subscribe to the podcast on the site or via iTunes (it’s free).

Source: Forbes


iPad Air Giveaway. Win a free iPad Air.

You Might Also Like


Sponsored Update

Update: 10

4 Firms In Iskandar Malaysia Get Facilitation Fund Totalling RM16.2 Million

Source: Malaysia Today

(Bernama) – Four companies have received the facilitation fund amounting to RM16.2 million from TERAJU@Iskandar Malaysia in an information sharing programme on business opportunities and assistance for the small and... READ M ...
Source: Malaysia Today   Full article at: Malaysia Today 14 hours ago, 7:42am CDT


Update: 9

Selangor’s Watergate about to explode

Source: Malaysia Today

Anwar brought Wan Azmi to meet Khalid to try to resolve this matter. Anwar supports the RM2.5 billion claim but Khalid is stubbornly sticking to the figure ...
Source: Malaysia Today   Full article at: Malaysia Today 1 day ago, 4:12am CDT

More From the Web

Update: 8

GLCs told to provide RM7 billion to develop Bumiputera firms

Source: Malaysia Today

EurAsia Cup presented by DRB-HICOM - Day One
(The Malaysian Insider) – Putrajaya has directed government-linked companies (GLC) to generate RM7 billion in business opportunities for Bumiputera firms this year, Prime Minister Prime Minister Datuk Seri Naj ...
Source: Malaysia Today   Full article at: Malaysia Today Jul 17 2014, 2:05am CDT

Update: 7

Rafizi shows proof of Putrajaya’s hand in contentious carpet-trader loan

Source: Malaysia Today

Eileen Ng, The Malaysian Insider PKR lawmaker Rafizi Ramli today revealed documents to prove Putrajaya interfered in the RM32 million Bank Rakyat loan to ‎controversial businessman Deepak Jaikishan. Rafizi ...
Source: Malaysia Today   Full article at: Malaysia Today Jul 16 2014, 2:16am CDT

Update: 6

PAS MP claims Bank Rakyat loaned carpet-trader RM215m, interest free

Source: Malaysia Today

(Malay Mail Online) – Controversial businessman Deepak Jaikishan (pic) was given a whopping RM215 million interest-free loan from state-owned Bank Rakyat, a PAS lawmaker alleged today, despite Putraja ...
Source: Malaysia Today   Full article at: Malaysia Today Jul 14 2014, 5:52am CDT

Update: 5

MRCB, Nusa Gapurna and PKNS settle suit over RM3 billion PJ Sentral project

Source: Malaysia Today

(The Malaysian Insider) – Malaysian Resources Corp Bhd (MRCB), Nusa Gapurna Development Sdn Bhd (NGD) and PKNS Holdings Sdn Bhd have reached an out-of-court settlement over the ownership of the... RE ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 21 2014, 2:53am CDT

Update: 4

Story behind Syed Mokhtar’s ‘RM2.25 billion tax-exempt’ Bernas deal revealed, says PKR MP

Source: Malaysia Today

(The Malaysian Insider) – An innocuous written reply in Parliament has provided a peek into the cosy relationship between the Najib administration and Malaysia’s best-known businessman, Tan Sri Syed Mokhtar.. ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 15 2014, 12:56pm CDT

Update: 3

Constitutional monarchy still murky concept

Source: Malaysia Today

After the RM4.5 billion land sale, the Sultan of Johor secured a 15% stake in MOL Access Portal (MOL) for RM396 million and took a 20% stake in Berjaya Times... READ MOR ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 14 2014, 12:37am CDT

Update: 2

Sultan of Johor’s RM4.5 bil backlash?

Source: Malaysia Today

"GOLDEN ASIA" Tokyo Premiere Press Conference
Has Sultan Ibrahim of Johor’s succession of big money deals over the last six months caused the tide of public opinion to turn against Johor’s royal palace? KiniBiz examines the... READ MORE ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 11 2014, 8:49am CDT

Update: 1

Putrajaya denies carpet dealer given interest-free loan

Source: Malaysia Today

Eileen Ng, The Malaysian Insider Putrajaya today refuted allegations that Bank Rakyat had allowed carpet dealer Deepak Jaikishan to repay a RM32 million loan without interest followin ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 11 2014, 5:44am CDT

Shopping Deals


<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




blog comments powered by Disqus

Latest stories

&#039;Avengers: Age of Ultron&#039; and &#039;Ant Man&#039; Concept Art Pops Up At San Diego Comic-Con 2014
'Avengers: Age of Ultron' and 'Ant Man' Concept Art Pops Up At San Diego Comic-Con 2014
Marvel started dropping bombs on Comic-Con attendees before the show even began. Letting fans peek at the concept art, by releasing posters of Marvel Studios' 2015 films.
Chuck Knoblauch Arrested for Assault
Chuck Knoblauch Arrested for Assault
Former Minnesota Twins All-Star second baseman Chuck Knoblauch was arrested on July 23 for allegedly assaulting his ex-wife.
Peyton Manning Not Slowing Down in 2014
Peyton Manning Not Slowing Down in 2014
Thirty-eight-year-old Denver Broncos quarterback Peyton Manning is showing no signs of slowing down as training camp officially kicked off on July 24.
Justin Blackmon Arrested for Marijuana Possession
Justin Blackmon Arrested for Marijuana Possession
Jacksonville Jaguars Owner Still Hasn't Given Up On Blackmon

About the Geek Mind

Read more about The Geek Mind.