(M.D. Kittle, Watchdog.org) With tax season upon us, taxpayers can expect the kind of hit-and-miss Internal Revenue Service customer service they’ve grown accustomed to.
There have been some reported improvements from abysmal answering rates of well below 50 percent, including 37 percent in 2015.
Last year, the answering rate rose to 73 percent, according to the agency, but customers continue to complain about the kind of help they are receiving.
It would seem the IRS has gotten a wake-up call.
While crying poverty, it turns out the agency took money from its customer service budget and used it to prioritize Obamacare and other Obama administration initiatives, according to the IRS’ inspector general.
“IRS employees ignored more than 30 million phone calls from desperate taxpayers seeking help in the run-up to the 2015 filing deadline — and those who did get through often waited a half-hour before getting help,” the Washington Times reported in January.
Agency administrators blamed Congress for not providing enough funding, but Inspector General J. Russell George reported the “IRS cut its own funding by eliminating nearly $150 million from customer service and slashing more than 2,000 staff positions.”
U.S. Rep. Glenn Grothman took IRS officials to task Wednesday during a House committee hearing into a host of tax collector-related issues.
“…If you talked to your guys on the phone, they weren’t always the sharpest,” the Glenbeulah Republican told IRS administrators during Wednesday’s House Oversight and Government Reform committee joint hearing with the Subcommittee on Healthcare, Benefits and Administrative Rules and the Subcommittee on Government Operations. “They didn’t know their own laws. You call them three times you get three different answers…”
“Do you monitor the quality of your folks?” Grothman asked IRS Deputy Commissioner for Services and Enforcement John Dalrymple.
“Actually we do monitor, every call can be monitored,” Dalrymple said. “We have a quality review system that statistically selects calls at random for quality assurance and in that process we determine whether, one of the main things we’re looking for is did the taxpayer get the correct answer?
“Actually we do quite well there. So, if you get through to us, you’re going to get pretty high quality.”
If you do get through.
The Republican-controlled Congress cut some IRS funding in certain areas in the past session. The budget reductions came on the heels of revelations the IRS had targeted conservative groups requesting nonprofit status.
A report from the Treasury Inspector General for Tax Administration, the IRS’ auditor, found the agency substantially cut funding from user fees that go to customer service operations and shifted them to other priorities.
“IRS officials said the money was needed to help carry out the agency’s other duties, including enforcing the tax penalties in the Affordable Care Act, extending a health coverage tax credit and seeing through new laws on foreign income tax compliance,” the Washington Times reported.
“The IRS also said it thought answering written correspondence was more important than answering phones, so it shifted employees’ focus.”
Grothman also wanted to know about the high levels of income tax credit fraud.
“Do you have any comments on EITC or are there any other parts of tax forms that invites cheating, or would require you to spend a lot more on compliance than you want to?” Grothman asked Dalrymple.
“Anything that is a refundable credit has always been a challenge for the IRS, whether it’s the EITC or the Child (Tax) Credit, anything that is refundable back to the taxpayer,” the IRS agent said. “And, by the way, there are corporate refundable tax credits, too, not just individuals; they cause us difficulty from a compliance standpoint.”
The problem, fraud trackers say, is the complexity of the tax credit laws.
“The GAO has reported that EITC has a very high improper payment rate and part of the reason for that is the complexity of the credit itself. It’s also self-reported,” U.S. Government Accountability Office’sJessica Lucas-Judy, acting director for strategic issues, testified at the hearing.
Ultimately, the problem makers are the people’s representatives in Congress passing confusingly tangled tax laws, or for giving a massive bureaucracy that collects some $3.3 trillion each year greater authority to promulgate rules.
What happens when someone is found falsely reporting a tax credit?
Dalrymple said the IRS likes to get them before issuing a check. Last year, the agency did over 300,000 pre-refund audits, the agent said.
If the IRS’ doesn’t catch it on the front end, that taxpayer money is as good as gone.
“It’s very, very unlikely to get an EITC refund back if it’s given to a taxpayer,” Dalrymple said.
This year, the IRS was prohibited from cutting refund checks on any return claiming the EITC or the Additional Child Tax credit before mid-February. The delay, lambasted by advocates of the poor, was mandated by Congress to give the IRS more time to catch fraudulent returns before sending out checks.
Dalrymple said low-income filers are often just confused by complicated tax law.
“This is very complex law for a very unsophisticated group of taxpayers, so a lot of the mistakes made are not necessarily fraudulent. They are honest mistakes,” he said. “And then the other thing you’ve got here are not normal, nuclear families, so determining who has the ability to claim a dependent, etc., all those things are incredibly difficult in this environment.”
“You’re a nice man Mr. Dalrymple, but I think you’re naïve,” Grothman said. “I think they do this on purpose.”