Despite budget cuts and withheld funding, the IRS is holding up its end of the chore of filing implications created by the Affordable Care Act, according to Commissioner John Koskinen’s tax day testimony before the Senate Homeland Security and Governmental Affairs Committee.

Koskinen generally praised the IRS efforts to implement “the numerous tax-related provisions of the ACA,” including the premium tax credit and the individual shared responsibility provision.

Such efforts included new tax credits and grants; form creation; forgiveness of applicable taxes for those who received an initially incorrect 1095; support to the government insurance Marketplace; and pre-season outreach to the tax prep software industry and the general public.

He cited a Treasury Inspector General for Tax Administration report from July that in regard to more than 27 million requests for federal taxpayer return data and the more than 11 million computational requests between October 2013 and March 2014, the IRS provided accurate responses for virtually all requests in a matter of seconds.

He also provided general figures on the season though early April:

  • More than 99 million individual income tax returns received by the IRS, which issued more than 77 million refunds for approximately $217 billion. The average refund was more than $2,800.
  • More than 262 million visits to Taxpayers used the “Where’s My Refund?” electronic tracking tool more than 187 million times.
  • More than 4.4 million visits to the section on devoted to the ACA, and more than 300,000 recordings played on the service’s automated ACA telephone line.

“With the exception of the continued erosion of taxpayer services due to budget cuts, the 2015 filing season has gone reasonably well,” Koskinen told the Committee. “Our level of customer service this filing season has been unacceptably low, both in person and on the phone, despite the best efforts of our employees. Our low service levels were the result of the budget cuts we have had to absorb.”
IRS funding has dropped $1.2 billion over the last five years, to $10.9 billion in fiscal 2015, he said, adding, “The IRS is now at its lowest level of funding since 2008. If adjusted for inflation, the agency’s budget is now comparable to where it was in 1998.”

“We ended FY 2014 with more than 13,000 fewer permanent full-time employees compared with 2010. We expect to lose another 3,000 or more through attrition by the end of this fiscal year,” Koskinen reported. “This year, we were forced to substantially reduce hiring of extra seasonal help we usually have during the filing season. As a result, our phone level of service at the start of the filing season was 54%, and dipped below 40% toward the end of filing season. That means more than six out of every 10 people who call could not reach a live assistor. That is truly an abysmal level of service,” he said.

“As for in-person assistance, during the filing season we were very concerned about the reports we received of taxpayers lining up outside our Taxpayer Assistance Centers hours before they opened,” he added.

More on their plate

Looking ahead, the IRS has been asked, as part of the Achieving a Better Life Experience (ABLE) Act, to build a certification process for professional employer organizations on what Koskinen called “a tight time frame and without any accompanying funding. Another possible complication … involves the group of tax extender provisions that expired at the end of 2014. I am concerned about the possibility that Congress may not act on the extenders until very late in 2015. The IRS will need to adjust its forms and systems for any tax provisions that Congress decides to extend.

“I am concerned,” Koskinen said, “that the 2016 filing season will be another challenging one.”

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