Acting National Taxpayer Advocate Bridget Roberts, in the office’s annual report to Congress, detailed what she thinks are the most serious problems facing taxpayers.
Roberts said that the IRS is "struggling" to both provide top quality service to taxpayers and enforce the law fairly.
When it comes to customer experience specifically, the IRS is among the "lowest performing federal agencies," the report said.
A big part of the problem, according to Roberts, is funding levels, which could affect everything from whether taxpayers use the Free File program to how long refunds are delayed. Between fiscal 2010 and fiscal 2019, the IRS budget was slashed by 20.4 percent. During the same time period, the number of the agency’s full-time employees fell by more than 20 percent.
Here's a look at some of the main issues that could affect taxpayers this season:
A big customer service problem at the IRS is the inability of callers to get in-person assistance.
In fiscal 2019, phone assistors answered just 29 percent of calls enterprise-wide, Roberts noted. Wait times on some lines averaged as much as 45 minutes.
Meanwhile, the agency has continued to reduce service at its taxpayer assistance centers.
Roberts said that in order to effectively improve customer service, a cultural shift needs to take place within the agency and it needs to examine everything from the employees it hires to how it trains them.
Additionally, the report notes the IRS should track taxpayer complaints and why they choose to use certain service channels over others. For example, while the agency sometimes steers taxpayers toward digital services, some may prefer or require speaking with a representative.
Outdated information technology at the IRS limits its ability to carry out tax administration effectively, the National Taxpayer Advocate said.
But in order for the agency to address its IT issues, Roberts notes that it needs to be fully funded. She said the agency will likely need to spend more than $2 billion to implement its plan to update its infrastructure. It spent just $289.7 million on the effort in fiscal 2019.
Fraud detection systems and filters regularly delay the issuance of refunds to taxpayers. Sometimes, for example, programs can flag returns as potentially fraudulent when they are not.
According to the report, refund delays were nearly three weeks beyond normal processing times.
A delay in the receipt of a refund can have negative economic consequences on low-income Americans, Roberts said.
Free File issues
Individuals with incomes of $69,000 or less are eligible to file for free through the program — a partnership with third-party preparers. About 70 percent of taxpayers are eligible to use it, according to the IRS.
But less than two percent of all individual returns filed – about 2.5 million – were filed using Free File, according to the report.
Also, fewer than half of the taxpayers who used the program in 2017 did so again in 2018, suggesting potential dissatisfaction.
As previously reported by FOX Business, the Free File program has had other problems – including the fact that some third-party partners obscured their free options from organic searches.