If you’ve ever had to call the IRS, you know exactly how the tax agency should use some of the $80 billion it will soon be getting from Congress.
There have been some false narratives that take away from what is hopefully a significant improvement in how taxpayers interact with the IRS.
Republicans argue that the legislation will increase audits on small-business owners and taxpayers making $75,000 or less. Nothing scares taxpayers more than the possibility of an IRS audit.
GOP members of Congress have falsely said that most new IRS hires will focus on auditing low- to moderate-income taxpayers.
Republicans’ scary tales of gun-toting auditors terrorizing taxpayers have been debunked by fact-checkers. Although there is a plan to increase scrutiny of tax dodgers, it’s targeted at rich folks.
In a memo to IRS Commissioner Charles Rettig, Treasury Secretary Janet L. Yellen said increased enforcement would be directed at “high net-worth individuals, large corporations, and complex partnerships who today pay far less than they owe.”
Contrary to the misinformation from opponents of this legislation, Yellen wrote, businesses or households earning up to $400,000 a year will not see an increased rate of audits.
Instead, the money the IRS is getting “will allow the IRS to work to end the two-tiered tax system, where most Americans pay what they owe, but those at the top of the distribution often do not,” she wrote.
The top 1 percent is estimated to not be paying $160 billion in owed taxes each year.
Yellen has asked the IRS to produce a six-month plan detailing how the new resources will be deployed over the next decade.
“Crucially, these resources will support a much-needed upgrade of technology that is decades out-of-date, and an investment in taxpayer service so that the IRS is finally able to communicate with taxpayers in an efficient, timely manner,” Yellen wrote in a separate letter.
Targeting wealthy tax scofflaws is important, but for many Americans, fixing customer service is just as critical.
The IRS record of answering phone calls is abysmal.
During the most recent filing season, the agency received about 73 million telephone calls from taxpayers seeking help or guidance. A mere 10 percent of those calls reached an IRS employee, Erin Collins, the national taxpayer advocate, said in her midyear report to Congress.
One toll-free telephone line with particularly poor service is the Taxpayer Protection Program line for victims of identity theft. Taxpayers whose tax returns were flagged for potential identity theft were instructed by the IRS to call the TPP line to verify their identity. Millions did just that — approximately 4.5 million calls were made. But only about 3.5 percent of the calls reached an employee.
The failure to answer victims’ calls leads to a delay in issuing their refunds at a time when inflation is high and consumer prices are rising.
Don’t blame IRS employees for the low level of service, however. The poor souls are working with a patchwork of antiquated systems.
Republicans have long starved the agency of money needed to upgrade. And they continue to carp about efforts to increase the agency’s funding even as customer service declines. In 1992, IRS employment was 116,673. It’s 78,000 now.
Despite what Republicans want you to believe, most new IRS hires will largely fill positions to improve customer service — from upgrading IT to answering phone calls, according to Natasha Sarin, Treasury counselor for tax policy and implementation.
Modernizing IRS systems is key to answering the phones. Retro might be fun for a 1960s party, but not when you’re dealing with the IRS, which is still operating on technology from that decade.
If you call the IRS, the representative answering can’t see your entire IRS file. Interactions with the IRS could be more efficient if there were a one-stop shop for your taxpayer information.
At least by the next filing season, the agency expects a significant improvement in phone calls being answered without long waits.
“The reality is what these resources are going to mean for the American taxpayer is an IRS that finally has the tools that it needs to serve them the way they deserve,” Sarin said in an interview. “Tangibly, most immediately is you’re going to see an IRS that can answer the phones.”
