As a tax practitioner, I have a special phone number I can call to speak to someone at the Internal Revenue Service about my client’s tax problems. Years ago, the phone would be answered by a real person on about the second ring and I would be well on my way to resolving whatever issue was at hand. Today, the same phone number exists but there is a menu directing the practitioner to select an extension based on the specific issue to be discussed. For the past several years, tax pros have been encountering hold times of 45 minutes to an hour. OK, so we throw the call on speaker phone and multi-task. But often when that 45 minutes or hour is up, I hear a change from the horrendous elevator music to – not a human voice – but a dial tone. Groan. And so the process begins again.
So imagine what happens to the average taxpayer. I understand they are experiencing hold times of several hours, sometimes only to be directed to another department and another lengthy hold time. And then of course, there’s the famous 50% accuracy rate with which questions are being answered.
In January, National Taxpayer Advocate Nina E. Olson released her 2015 annual report to Congress and at the top of the list is concerns about the continuing degradation of services provided to taxpayers by the Internal Revenue Service. The report states, “The IRS may be on the verge of dramatically scaling back telephone and face-to-face service it has provided for decades to assist the nation’s 150 million individual taxpayers and 11 million business entities in complying with their tax obligations.”
Since 2014, the IRS has invested millions of dollars and plenty of brain power to develop a Future State plan, which they have chosen not to make public. The Advocate’s report says, “There are many positive components to the plan, including the stated goal of creating online taxpayer accounts through which taxpayers will be able to obtain information and interact with the IRS. The report also acknowledges that cuts to the IRS budget – about 19 percent in inflation-adjusted terms since fiscal year (FY) 2010 – have forced the IRS to explore cheaper service options.”
It’s going to get worse before it gets better, so what can you do? Here is some advice:
If you receive a letter or other notification from the IRS about a specific issue, read it carefully to determine what the problem is. Many taxpayers freeze up and find that they do not understand what they “did wrong.” You may have done nothing wrong. These letters can be rather lengthy but if you take a good look, you may be able to figure out exactly what the IRS wants. And you may be able to satisfy the request by writing them back rather than calling. Check the address header to see if a fax number is listed. If there is one, write up your response and fax it to the IRS. Otherwise, write a letter and mail it. Written documentation is better than verbal anyway.
Keep in mind that the IRS will not engage in email correspondence. That may change in the future but for now it’s all about phone calls or snail mail.
If you have a general tax question, don’t call the IRS. Go to the IRS website and state your question in the search engine. Or Google it. The accuracy of the answer will likely register higher than the crap-shoot of relying on whoever finally answers the phone. And if your question is “Where is my refund?” go to the IRS website and click on the Where's My Refund? icon on the right hand side of the screen. You will get an immediate answer.
Contact your tax professional. This can get pricey, but well worth it if you have an abhorrent fear of the IRS or you simply do not want to spend your valuable time dealing with the issue. Half of the letters clients bring in can be resolved in a matter of minutes. Sometimes the IRS just needs a bit more documentation, or they may be encouraging you to pay your tax bill or file a missing return. These situations can be sorted out without having to pick up the phone.
Currently, you can get quite a bit of information from the IRS website. You can set up an installment agreement, you can check the status of your refund, you can get a transcript of your account, and you can even file your tax return for free, among other things. I suggest you get acquainted with the IRS website because it appears that we will have to depend on this interaction more than ever before.