With 4,000 new customer service representatives and plans to hire 700 new Taxpayer Assistance Center (TAC) employees, taxpayers soon may get relief from endless hold times, no in-person help and unresolved problems. The staff increases have been made possible by funding enacted in the Inflation Reduction Act, approved in August 2022 (Click here for prior coverage).
The customer service representatives will be phone assisters and will process taxpayer correspondence. The other 700 hires will be Individual Taxpayer Advisory Specialists who provide face-to-face assistance in IRS TAC offices and Initial Assistance Representatives, responsible for greeting and determining the needs of taxpayers visiting those offices.
The IRS also is hiring staff members to work in Information Technology and compliance positions; both of which support return processing and audits.
National Taxpayer Advocate Quantifies the Problems
The National Taxpayer Advocate Service, an independent organization within the IRS headed by Erin M. Collins, helps taxpayers resolve their IRS account issues, advocates on behalf of taxpayers and works towards systemic change to mitigate taxpayer problems. Each year, the NTA reports to Congress on the ten most serious problems encountered by taxpayers. The report also makes administrative and legislative recommendations to address those problems.
“There is no way to sugarcoat the year 2021 in tax administration,” noted Erin M. Collins, National Taxpayer Advocate in the start of this year’s report. “From the perspective of tens of millions of taxpayers, tax administration did not work for them.”
Statistics on IRS Operations
- IRS assisters answered approximately 32 million out of 282 million calls (11%) in FY 2021. This means only 1 out of 9 taxpayer calls was answered.
- The IRS answered only about half of the calls from taxpayers with questions about their audits.
- 4.5 million pieces of correspondence need processing.
- 3 million individual returns and more than four million business returns await initial processing.
- 2 million amended individual and business returns need to be processed.
- One-half million returns are in error resolution.
It remains to be seen how quickly the new staff members can get trained and start working through this backlog. Treasury Secretary Janet Yellen has mandated that the IRS develop a plan, showing operational initiatives, metrics and targets, by February 2023. In addition, President Biden has nominated a new IRS Commissioner, Danny Werfel, who has large organization management experience. A former “budget official and private sector leader” from the Boston Consulting Group, Werfel has served in both the Democratic and Republican administrations of President Obama and President George W. Bush. Werfel still needs to be confirmed by the Senate and has the daunting task of reworking the agency to make up for years of under-funding and the brain drain caused by the retirement of experienced staff.
The effects of increased funding may not be evident during the upcoming filing season, but the processing of 2022 tax year returns over the course of 2023 hopefully will improve over last year. Frazier & Deeter tax professionals will be monitoring the situation closely to make sure that interactions with the IRS are timely and effective as the agency reworks its customer service function.