The Government Accountability Office has issued a report on the Internal Revenue Service's performance so far this filing season, including a prediction that the IRS will lose hundreds of millions of dollars responding to calls about tax rebates.
Given the increased call volume the IRS expects from the recently passed economic stimulus legislation, the IRS is planning to shift hundreds of its collections staff members to telephones. The estimated revenue loss, according to the IRS, is up to $681 million.
Early in the filing season, the IRS's telephone performance was comparable to last year, the GAO noted. However, because of the anticipated increased call volume associated with the economic stimulus legislation, the IRS expects the level of service to drop from 82 percent down to 74 percent, a level that will decrease taxpayers' ability to get through and speak with a staff member.
The GAO also noted that the IRS faces limitations in identifying individual paid preparers and monitoring their performance. The IRS requires that paid preparers identify themselves on all income tax returns with either a Social Security number or a preparer tax identification number and, if applicable, an employer identification number. Many preparers do not sign tax returns with the required number or numbers, but because processing returns is a priority for the IRS, it still accepts returns even if the preparers' information is not provided.
Because preparers have the choice between two numbers and may be required to use a third as well, IRS officials said that confusion is created for preparers and the IRS faces challenges in enforcing the signing requirement. The limitations in identifying preparers complicate enforcement because the IRS cannot systemically match tax returns with preparers in order to detect patterns of noncompliance.
Furthermore, IRS officials said this is an impediment to research on preparer compliance, its causes and possible solutions. Several IRS officials with responsibility for preparer compliance said that requiring a single identifying number could improve preparer compliance with signing requirements, but the IRS has not evaluated the usefulness or costs of implementing such a requirement.
