Taxpayers around the country are encountering longer wait times on IRS phone lines and at Taxpayer Assistance Centers due to budget cuts at the agency.
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This year, the agency’s budget was cut by over $330 million, resulting in a decline in IRS staffing of approximately 5,000 employees. One result of these cuts is a reduction in the number of daily hours telephone assistance is available to taxpayers, falling from 15 to 12.
At a recent congressional oversight hearing, IRS Commissioner Doug Shulman testified that telephone calls have increased by 34 percent, but the hours phones are answered have decreased by 20 percent (see IRS Commissioner Shulman Addresses Tax Delays). Only 65 percent of taxpayers seeking telephone assistance are able to speak to an IRS employee, and they must wait an average of 17 minutes.
The leader of the employee union at the Treasury and the IRS said that this tax season, many taxpayers have waited for over an hour to reach someone at the IRS.
“Taxpayers seeking help by phone are waiting on hold for as long an hour, and every day there are very long lines of people waiting at Taxpayer Assistance Centers around the country,” said National Treasury Employees Union President Colleen M. Kelley in a statement.
“These wait times and delays, as well as other serious issues impacting taxpayers, are the results of an IRS that has been starved of the resources it needs, and finds itself striving to perform its increasingly-complex mission with thousands fewer employees,” she added. “Most taxpayers want to comply with their tax obligations, but many need help to do so.”
Kelley cited a long list of taxpayer frustrations caused by inadequate IRS staffing. These include delays in completing a phone call to the agency, lengthy delays in IRS responses to letters seeking to resolve tax issues; further delays not only to individual taxpayers but to small business owners trying to set up payment plans; and difficulties in taxpayers getting answers to their questions about deductions and credits in a complex tax code, among other issues.
In response to these kinds of problems, the White House has proposed fiscal 2013 funding for the IRS of $12.76 billion, up nearly $945 million from the current fiscal year. However, congressional opposition to the funding for the health care reform law, and deficit-cutting pressures in Congress, could force further cuts in the agency’s budget.
More than $400 million of the increase proposed by the Obama administration would go toward enforcement efforts which, together with customer service, play a critical role in the agency’s ability to generate the revenue needed to fund the nation’s federal government and provide an array of services to the public.
Kelley emphasized that the IRS collects some 93 percent of all federal revenues. “Clearly, adequately funding the IRS is an investment for our nation, not a cost,” she said.
However, the long-term trend has been discouraging, Kelley said, noting that in 1995 the IRS had a staff of 112,024 to administer the tax laws and process 205 million tax returns. Today, she said, the IRS staff is about 91,000 and must process more than 236 million much more complex tax returns.
Kelley is not alone in this view. In her most recent annual report to Congress, National Taxpayer Advocate Nina Olson called inadequate IRS funding the most serious problem facing taxpayers. Meanwhile, IRS Commissioner Shulman has used recent congressional testimony to warn of the negative impacts of inadequate agency staffing, from both short- and long-term perspectives, on taxpayers and the IRS’s ability to perform its mission.
In testimony before the House Ways and Means Committee in March, Commissioner Shulman acknowledged that continuing budget cuts are forcing the IRS to conduct fewer examinations and engage in fewer collection activities. The agency head expressed concern this convergence of circumstances could lead compliant taxpayers to believe they can cheat the tax system.
Some members of Congress have expressed serious concerns, as well. Rep. John Lewis, D-Ga., a member of the Ways and Means Committee, noted that the cut in telephone assistors was made despite the increase in phone calls seeking tax help. Clearly, he said, the cuts have harmed taxpayers.
“For taxpayers with questions, there is simply no substitute for knowledgeable and experienced employees,” said Kelley.