In her 2023 Annual Report to Congress, National Taxpayer Advocate Erin Collins, writes, “We have begun to see the light at the end of the tunnel.” Indeed, earlier this month the IRS announced that it had completed the automatic adjustments of 2020 tax returns related to the exclusion of unemployment income that was passed by Congress in the middle of the 2021 filing season. Progress is also being made on the backlog of paper filed returns and correspondence in the IRS’ inventory. And, despite House leadership in Congress attempting to repeal some of the IRS funding provided by the Inflation Reduction Act, additional phone service agents and in-person support staff have been hired and phone staff that were assigned to help with the paper backlog are returning to their regular assignments.
It seems things are improving at the IRS, at least with respect to backlogged paperwork and taxpayer service. Anecdotal reports on social media are even beginning to indicate service may be improving for tax professionals. Collins notes “Because tax professionals prepare the majority of tax returns and often call with complex account-specific questions, the IRS has established a Practitioner Priority Service (PPS) telephone line to handle their calls. In FY 2022, IRS employees answered only 16% of PPS calls (fewer than one out of six), and the average hold time for those who got through was 25 minutes.”
Collins adds this poor service places tax professionals in the “difficult position” of having to bill clients for time spent trying to reach the IRS by phone or to write off that time (lose money). It also should be noted that the PPS is what representatives working at Low Income Tax Clinics (LITCs) across the country use to resolve IRS matters for their clients and that poor PPS assistance affects not only taxpayers who can afford to pay a representative, but many who can’t. Poor phone service drains already scarce resources at the LITCs, which often rely on pro bono volunteer attorneys, EAs, and CPAS, in addition to paid staff to help low-income clients.
Collins goes on to say “Tax professionals are key to a successful tax administration…The challenges of the past three filing seasons have pushed tax professionals to their limits, raising client doubts in their abilities and creating a loss of trust in the system.” Indeed, many tax professionals have decided to reduce the number of clients they serve for both return preparation and IRS representation because of the time required to reach the IRS by phone. Additionally, it remains unclear whether or not recent IRS attempts to improve service by curtailing robocall-style line-jumping services have been successful.
Megan Killian, Executive Vice President of the National Association of Enrolled Agents, which represents nearly 60,000 EAs, recently wrote to IRS Acting Commissioner Douglas O’Donnell that the PPS “which has the very purpose of providing efficiency and ease for tax professionals has become nearly inoperable in recent weeks” and asked that the IRS as “their first action in expending these [Inflation Reduction Act] funds, to immediately being demonstrating concrete improvement to the phone situation…”
Killian notes that “the credibility of the agency is on the line.” Her letter includes multiple examples of EAs makeing double digit attempts to get through on the PPS. An EA from Virginia was quoted as saying they hadn’t gotten through on the PPS in over a year [emphasis added]. The letter also notes that often the new AI-based system that was supposed to help eliminate the robocall issue has had the effects of making wait times even longer. Or as one tax practitioner on social media put it, “Now I get to wait even longer to be disconnected.” An EA from Texas said, “I don’t even try to get through anymore.”
“Not trying to get through” typically means that the EA has resorted to responding in writing to the matter at hand, thus adding to the backlog of paper correspondence being received by the Service. Killian states, “The window of opportunity for the IRS to truly show it will use these funds to dramatically improve customer service is limited, and the IRS should use this opportunity to tackle the phone problems head on.”
With e-filing set to open for filing season 2023 in a little over a week, one hopes that the IRS continues to hire and train staff, and that taxpayers will not succumb to recent GOP fearmongering and the associated attempts to reduce the funding provided to the Service. It’s easy to hate the IRS, but it is important to remember that Congress writes the tax laws and Congress has been underfunding and undermining the Service for decades. Restoring trust in the system is going to require funding, action, and (possibly) a little bit of faith.