The IRS needs more agents on its help desk, not its audit department.
That’s the obvious takeaway from the annual report to Congress of the National Taxpayer Advocate, a congressionally created independent organization within the IRS. In the report released Tuesday, Advocate leader Erin Collins said the IRS is in “crisis.”
“From the perspective of tens of millions of taxpayers, [the year 2021] was horrendous,” Collins said.
Among the problems: “Processing Backlogs Led to Long Refund Delays.” “Telephone Service Was the Worst It Has Ever Been.” “The IRS Took Months to Process Taxpayer Responses to Its Notices, Further Delaying Refunds and in Some Cases Leading to Premature Collection Notices.”
On the phone service, agents only took 11.4% of calls made to its help line, and the average wait for those it did take had an inordinate average hold time of 23 minutes.
The Advocate was quick to say the blame doesn’t necessarily lie on IRS workers themselves, who the report argues are overburdened and underfunded. It’s a reasonable assessment (although plenty of taxpayers can tell true stories of IRS agents who are uncaring or incompetent). Congress has created an extraordinarily complicated tax code and then keeps changing it year after year while using the IRS as a back-door conduit for supposedly “emergency” relief efforts.
Advocates of super-simplified tax systems, such as a flat tax or a form of national sales tax, can take plenty of fodder from the logical implications of this report. Still, tax reform wasn’t the Advocate’s point or purview. The report is focused on management and resources. The report makes clear that even if Congress doesn’t reform the tax system, it should reform the tax agency that implements that system.
Unfortunately, national Democrats want to go in exactly the wrong direction. President Joe Biden’s big-spending Build Back Better bill would provide $79 billion more (during 10 years) for the IRS. However, the extra money would be used not to serve taxpayers better but to harass them more. It would all go to expanded tax enforcement and audits. This would be unconscionable. Under this proposal, the same IRS that won’t answer its own phone — and when it does, it gives wrong answers as much as a third of the time — would put millions and millions more taxpayers through the wringer in a system where the odds are stacked entirely in favor of the bureaucrats, right or wrong.
Anyone who has dealt with a dispute or complicated question with the IRS knows the system is opaque. The actual decision-makers often are not just unavailable for discussion but also utterly anonymous. And the time and expense of challenging even horribly erroneous IRS administrative decisions are prohibitive. Even after all that, access to real courts of law is limited and well beyond the budget of most taxpayers. The whole system is rotten.
In addition to tax reform that radically simplifies the system, two things are needed. First, the IRS should be subject to top-to-bottom administrative reform, perhaps as part of a whole-of-government reform of the Administrative Procedure Act and civil service laws. The goal should be to incentivize IRS personnel to help compliance and solve problems, not treat taxpayers as suspects and adversaries. Second, yes, the IRS could use more resources. But almost all of those new resources should go to taxpayer assistance, not punishment and not “investigations” carrying a prosecutorial mien.
The Advocate’s report amounts to a cry for help for taxpayers. Biden’s proposal is instead a threat of persecution. Every member of Congress should reject Biden’s approach.
