WASHINGTON — Got a question for the IRS about your taxes? The agency is pushing you to fire up your computer rather than give them a call.
The IRS may soon dramatically scale back telephone and face-to-face service as part of a plan that would focus more on online accounts for the 150 million individual taxpayers and 11 million businesses seeking help and information, the agency’s official watchdog warned.
In an annual report to Congress, National Taxpayer Advocate Nina Olson said the IRS should be more open about its plans and that service cutbacks may mean an increasing number of people may have to turn to tax preparers and software such as TurboTax to file their returns.
That would increase tax compliance costs for millions of filers.
“Implicit in the plan — and explicit in internal discussion — is an intention on the part of the IRS to substantially reduce telephone and face-to-face interaction with taxpayers,” Olson’s report says. “The key unanswered question is by how much. … It is incumbent upon the IRS to be much more specific about how much personal taxpayer assistance it expects to provide.”
The IRS fired back in a statement, saying Olson’s report doesn’t paint an accurate picture. It said taxpayers want new options to interact with the agency and that moving more communications online would free up resources for traditional services.
“The IRS remains fully committed to personal service to taxpayers, and the IRS believes increasing the availability of self-service interaction frees up in-person resources for taxpayers who truly need them, including those who are not comfortable online or don’t have personal access to a computer,” the statement said.
Taxpayers currently make more than 100 million calls a year to the IRS and more than 5 million visits to the agency’s walk-in assistance centers.
Olson said millions of taxpayers don’t go on the Internet and millions more are reluctant to share sensitive information online, as envisioned by an IRS plan for its future operations that’s been under development for a year-and-a-half.
The agency has scaled back taxpayer services as it has put in place budget cuts imposed by Republicans in Congress. As a result, many calls to IRS information centers go unanswered and those who do get through get answers to only the simplest questions. The agency also no longer helps low-income taxpayers file their returns and it conducts fewer audits.
After adjusting for inflation, Congress has cut the agency’s budget by about 19 percent since 2010. Last month, Congress finally gave the agency a budget boost, including $290 million in additional money for taxpayer assistance.
Olson said that the evolving IRS plan has “many positive components,” such as new online taxpayer accounts that would speed information to taxpayers and handle many of their interactions with the agency. That is likely to reduce demand for overburdened telephone and face-to-face interactions with the agency.
Still, Olson said, many people seeking help from the IRS don’t have “cookie cutter” problems that can be handled online. For instance, last year more than 9 million filers experienced refund delays or received IRS notices after submitting their returns proposing to adjust tax payments.
Olson’s warnings stem from limited public pronouncements about the agency’s planning and internal IRS discussions. She said the IRS should make its plans public.
“We believe it is critical that the IRS share its plans in detail … and then engage in a dialogue about the extent to which it intends to curtail or eliminate various categories of telephone service and face-to-face service, whether it will provide sufficient support for taxpayers,” the report said. “And whether it has an adequate ‘Plan B’ if taxpayer demand for telephone and face-to-face service remains higher than the IRS anticipates.”