irs plays whac-a-mole with the phones

what, just moving the resources around doesn’t work?

by 卡塔尔世界杯常规比赛时间 research

the internal revenue service did a dismal job of answering phone calls in 2021, struggling to pick up the toll-free 1040 phone 11 percent of the time it rang. a year later, that number leaped to a still-dismal 29 percent.

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so janet yellen did what any treasury secretary would do: she gave the irs a swift kick in the 1040 and committed the service to answering at least 85 percent of calls in 2023 and cutting wait times in half.

and the irs’s customer service representatives did it! yay, right?

well, not so yay. strapped for staff and funding, the irs solved the phone problem by shifting resources from the processing of tax returns to the answering of phones. the result: slower processing times, delayed refunds and, inevitably, more phone calls regarding the very problem that the irs created by solving the phone problem.

if the olympics ever recognizes whac-a-mole as a sport, the irs may well win a gold medal for america.

a variety of backlogs

national taxpayer advocate erin m. collins, in her annual report to congress, points out that delayed tax refunds can be a burden to taxpayers who have paid more than their share up front, a debilitating cash flow problem for businesses, and a needless expense to the irs.

indeed the delays violate three legislatively mandated taxpayer rights:

• the right to be informed
• the right to finality
• the right to quality service

in 2023, the irs did an admirable job of issuing refunds for electronically filed returns that did not have or look like they had problems.

but when csrs got involved in the process – the same people who got moved over to the phones – various processing areas got backed up, among them:

• processing of amended returns
• processing of correspondence and accounts management cases
• processing of paper returns
• resolution of returns suspended in the processing stream

when delays in refunds for overpayment are considered “excessive,” the irs has to pay interest on the refunds. the loss to the irs budget added up to some $1.4 billion, money that would have been better spent whacking moles.

a common sense solution

the report said that csrs spent 3.73 million hours successfully staffing toll-free phones from january through april 22, 2023, but the success “came with a huge cost.”

“csrs spent 1.27 million of those hours waiting for the phone to ring (idle time),” the report noted, “while amended returns, correspondence and am case inventories continued to climb.”

not one to complain without offering a solution, collins suggested that more moles could get whacked and stay whacked if better training and more use of remote call centers allowed csrs to handle processing tasks while the phone isn’t ringing.

collins also suggested that more first-time penalty abatements (ftas) would reduce processing time and the number of phone calls.

ftas can be requested by phone, but many taxpayers make their requests in writing, which tends to slow down processing. either way, the abatements are granted only if requested.

in 2023, only 125,000 ftas were granted while another 1.4 million appeared to be eligible. most of the former probably had professional tax prep help while the latter, often of lower income, never knew of the possibility.

one of collins’s many common sense solutions: just give all eligible taxpayers the abatement. that would mean fewer phone calls, less correspondence, less csr time spent on needless bureaucracy, and more fairness for taxpayers.

collins has several other suggestions for speeding up the processing of returns. these will be discussed in an upcoming cpatrendlines article.

posted on january 23, 2024