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Taxpayer Advocate Reports on IRS Customer Service & Collection Issues

Submitted by admin on Thu, 7/8/2010 - 12:00 am

The National Taxpayer Advocate has submitted its mid-year review of the priority issues to focus on in the upcoming FY2011. Some of the extremely important items they are finally beginning to focus on include the following:

  • Taxpayer Services – The IRS has fallen severely short in providing adequate service in administering an increasing number of social benefit programs; Stimulus Payments, Making Work Pay credits, and First-Time Homebuyer credits. Spending for IRS taxpayer services has been declining, but at the same time, more taxpayers have been contacting the IRS for assistance. The report shows that the IRS has fallen far short of providing adequate customer phone service by only answering 53% of its calls in FY2008, down from 87% of answered calls from taxpayers in FY2004. The IRS has set a goal for FY2010 of answering 71% of calls from taxpayers. The IRS has stated that much of this problem is associated with the redirection of prior funding, to an increased level of funding for enforcement programs that target the collection of taxes owed.
  • IRS Collection Practices – This report also targets the area of IRS collection practices, specifically the collection of past-due (back tax) liabilities, even when performing this collection will cause undue hardship and harm to taxpayers, and jeopardize future tax collection. Ms. Olson of the Taxpayer Advocate said the following, “The conventional wisdom seems to be that more hard-core enforcement actions like liens and levies mean more revenue, but the data doesn’t bear that out.” ** Since FY1999, the IRS has increased tax lien filings by about 475% and tax levies by about 600%, but the revenue collected by IRS Collections has actually decreased by about 7%, last year alone, the IRS filed nearly 1 Million liens against taxpayers.** The IRS has issued many statements over the past year or so, confirming their desire to assist financially struggling taxpayers, yet the number of liens and levies has continued to rise with little evidence that the IRS is changing its collection practices.

In short, for those of us representing taxpayers on a daily basis, this is nothing new. We can thank Ms. Olsen for bringing these issues to light through the Taxpayer Advocate reports.

To read a copy of the full report, click here.