Problems with the IRS Telephone Service and Collection Issues Report from the Taxpayer Advocates

Telephone Service. The report designates the IRS?s declining ability to answer telephone calls as the most serious problem facing taxpayers. Olson notes that the IRS has set a target for FY 2010 of answering only 71 percent of calls from taxpayers seeking to speak with a customer service representative about account questions, down from 83 percent in FY 2007.

?In other words, the IRS is planning to be unable to answer about three of every 10 calls it receives,? Olson said, adding that the IRS expects those who get through will have to wait an average of 12 minutes. The report states that this projected level of service is barely above the level of 69 percent notched in 1998, when Congress passed the landmark IRS Restructuring and Reform Act due in large part to concerns about inadequate taxpayer service. ?This level of service is unacceptable,? Olson wrote.

Examination and Collection Issues. The report contains a detailed assessment of the Internal Revenue’s examination and collection practices, concluding that many practices have been developed piecemeal and that the IRS lacks an effective overarching strategy to maximize voluntary compliance. The report also concludes that IRS collection practices often harm taxpayers without producing revenue.

In particular, the report cites the IRS lien filing policies as the second most serious problem facing taxpayers. The IRS uses automated systems to file liens against taxpayers in a variety of situations, even when the taxpayer possesses minimal or no property and the lien will do little more than damage the taxpayer?s financial viability and access to credit. A study conducted by Olson?s office found no obvious causal relationship between the number of lien notices filed and the amount of overall revenue collected. Over the past decade, the IRS increased its lien filings by nearly 475 percent ? from about 168,000 in FY 1999 to nearly 966,000 in FY 2009, yet overall inflation-adjusted collection revenue declined by 7.4 percent during this period.

A second study found that IRS procedures for determining a taxpayer?s ability to pay outstanding tax liabilities may be driving some taxpayers into long-term noncompliance because the IRS fails to consider other debts such as credit card balances, school loans, and actual hospital or medical bills. Other tax systems, including Sweden?s, consider the taxpayer?s overall financial picture.

?Any taxpayer with these debts will tell you that these creditors don?t go away,? Olson said. ?Taxpayers are placed in the intolerable position of agreeing to pay the IRS more than they can actually afford (given their other debts) and then defaulting on the IRS payment arrangements when they channel payments to unsecured creditors in order to get some peace. Thus, the IRS itself fosters noncompliance by its failure to take a holistic approach to the taxpayer?s debt situation.?

http://www.irs.gov/newsroom/article/0,,id=217903,00.html

This report is taken directly from the National Taxpayer Advocate published at the IRS website. The question I ask, what will IRS do to fix the problems? I guess we will wait and see.

The above link is the report in full given to congress.

Related posts:

1. New Report Tells About The IRS Abusive Tax Lien Filing Practice
2. Federal Tax Lien and Your Credit Report.
3. Where The IRS Service Centers Are Located
4. Can Delinquent Tax Return Penalties Get abated With the Internal Revenue Service and How?