Shockingly poor IRS customer service (and what to do about it)

We knew from earlier IRS statements that about one million tax returns from 2019 remain unprocessed and I’ve covered that in earlier blog posts. Many of these are paper filed returns. But now we hear that 16 to 17 million tax returns for 2020 are backlogged and many of these people are waiting for refunds.

In addition, the telephone access customer service statistics have declined. When I last reported on this issue, only 1 in 50 telephone calls made to IRS would be connected to a representative. Now this week the Wall Street Journal’s investigative reporter Laura Saunders reports that IRS now says the number is 1 in 200 calls get through.

All parties agree that this is an unacceptable level of service. The ultimate long term response is likely to be an increase in Congressional funding allocated to this function. Part of the problem is the Congressional trend by Republicans to cut IRS funding each year since 2011. The former president often publicly complained that he was under audit by the IRS and his complaints portrayed a low opinion of the agency. The president’s 2018 administrative budget cut IRS funding by another $239 million. The impact of those services cuts was amplified by the pandemic shutdown.

IRS advises taxpayers to not call about missing refunds and just wait patiently.

However, taxpayers who have received notices need to take a different path. While tax problem resolution professionals like me are well prepared to handle these issues, we (CPAs at least) have a professional obligation to weigh the cost of our services against the benefit of that service received by the client. Certainly I can resolve these issues. But in too many cases, it simply isn’t economical to get me involved in solving the problem.

The Wall Street Journal’s “Your Money Briefing” podcast on Tuesday May 11 offered tips for ‘do-it-yourselfer’ tax resolution experts. The advice focuses on careful deliberate documentation of all details, redundant paper trails and the use of certified mail for all written communications.