I don't know if it was the union protestors, stumping by the nation's independent taxpayer advocate, or, more likely, politicians holding its budget hostage -- but I was disappointed to hear the Internal Revenue Service is holding off on its plans to close dozens of Taxpayers Assistance Centers.
With every available statistic pointing to a tremendous upswing in taxpayer utilization of the Internet, the cuts seemed logical when IRS Commissioner Mark Everson laid out a case announcing the closures in May. Since then, the big reason I've kept hearing in support of keeping all of the centers open is that no one knows the impact the closures might have on taxpayer compliance.
But the 68 centers targeted by the IRS were not picked out of a hat. Each of the 400 centers around the country was evaluated using five factors, including workload considerations, geographic factors, demographics, employee costs and facility costs. Many of the sites placed on the theoretical chopping block were in areas believed to already have an overlap of service, where taxpayer assistance could be readily found through other means in the community.
The IRS was already making its decisions by looking at the numbers. In May, just a few of the cost-efficient alternatives the IRS cited to TAC services were:
- The cost to prepare a tax return at a Volunteer Income Tax Assistance site is $19, compared to $46 at a TAC.
- Downloading forms from the IRS Web site costs less than $1, compared to distributing a form at a TAC for $9.
- Tax law questions can be answered for $11 through toll-free lines -- and with more accuracy and a higher customer satisfaction rate -- compared to a TAC, at about $22.
For the first time, this year saw the majority of tax returns filed electronically, and the IRS is accordingly trying to prepare for the future by putting its resources where there's the biggest demand.Between 2002 and 2004, contacts at the walk-in centers dropped nearly 20 percent -- from 9.5 million visits to just under 7.7 million visits. For the same years, page visits to the IRS Web site, www.IRS.gov, have more than doubled (67 million in 2002, to 153 million in 2004), and the Web site's page views have nearly tripled (366 million in 2002, to 934 million in 2004).
For the sake of thoroughness, toll-free assistance-answered calls also rose 7 percent, from 33.2 million in 2002 to 35.5 million in 2004.
It doesn't take a congressional study to make an educated guess that taxpayers are finding a way to get their answers elsewhere. And I have a hard time believing that those same people who are willing to make the effort to go to a center, take a number and wait, won't be able to find their way to a public computer, an alternative community tax center, a telephone or their local CPA.
The National Treasury Employees Union fought loudly against the closures, but the IRS, like so many other industries, has a responsibility to confront the questions of cost efficiencies. Of the 2,300 employees who operate the centers nationwide, fewer than 450 employees would have been located in the affected centers, and many less than that would have been affected after retirements, buyouts and placement with other Treasury bureaus.
Tying a congressionally mandated study to an appropriations bill, to answer the unanswerable what-if's of taxpayer compliance, is wasteful. Last year, the IRS estimated that uncollected federal tax payments amounted to around $270 billion, so I'm inclined to think that the way things have always been done just might not be the best way.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access