Key IRS issues taxpayers will face in 2020
Customer service problems are the biggest hurdle Americans will face this tax season, writes USA Today.
“The Internal Revenue Service (IRS) is one of the worst performing federal agencies,” said Bridget Roberts, acting taxpayer advocate, in her annual report to Congress.
According to the report, taxpayers may face many troubles this year - from delays in returning funds and obsolete equipment to misleading audit letters. Here are 10 key IRS issues affecting customer service life:
The IRS received about 2019 million phone calls in fiscal 100, and support representatives answered only 29% of them, the report said. Decision? Congress must provide the necessary IRS funding to recruit an adequate number of staff capable of providing the best customer service.
- Technology Aging
According to IRS estimates, the agency’s current plan to improve the technological infrastructure will cost approximately $ 2,3-2,7 billion. The plan is designed for several years, and if it is fully implemented, it will make the tax service more efficient. However, the success of innovations depends on additional funding. The IRS spent $ 289,7 million on part of this plan in fiscal 2019.
The IRS is facing continuous budget cuts. The number of employees of the department decreased, which increased the burden on the remaining employees. The agency’s budget was cut by 20,4% between the 2010 and 2019 financial years, and the number of employees during this period decreased by more than 20%.
- Refund Delays
IRS has developed filters to prevent money back fraud. In addition to intruders, because of these filters, there were delays in the returns of taxpayers who submitted declarations without violations. In 2019, the level of false positive filter response reached 71%.
- Disappointment in Free File
IRS is partnering with Free File, a group of private companies that provide filing services. The purpose of the cooperation is to offer taxpayers entitled to privileges free software for preparing tax returns on the IRS.gov website. About 105 million taxpayers are entitled to use this service. Despite the fact that 90% of Americans filed their declarations electronically in the tax year 2018, less than 2% of them did this using the Free File software products. The reason is the dissatisfaction of taxpayers with tax service software.
- Unskilled tax consultants
The report said that simplifying the process of filing declarations facilitated the preparation of tax consultants, many of whom do not have sufficient knowledge of tax law. Lawyers and certified accountants are required to pass exams and have a specialized education. But at the present time there are no licensing requirements for federal workers providing tax preparation services. In 2018, more than 80 million individual tax returns were prepared by unskilled workers, which affects their quality and the correctness of filling out.
On the subject: 4 documents, without which it is impossible to file a tax return
- Appeal process
The IRS Appeals Board, established in 1927, is committed to resolving disputes with taxpayers without litigation. Appeal specialists do not always seek independent conclusions that differ from the agency’s position. This undermines the independence of the appeal process.
- Language problem
Federal agencies are required to develop and implement an effective way to communicate with customers who do not speak English well. But the tax service has problems with this. The IRS translates only some important notices into Spanish. There are no notifications in other languages.
- Audit Confusion
In approximately 16% of notifications of the need for an audit of declarations for the 2015-2019 financial years, the IRS sent out combined letters, including requests for additional information and a notification of an upcoming audit in 30 days. The report says that in this case, taxpayers do not have enough time to collect all the additional documentation and resolve other issues.
- Tax Debt Settlement
The IRS offer in compromise program allows taxpayers to pay off their tax debt in installments, which is a profitable option for those who cannot fully pay their tax obligations. The program, however, does not meet Congress expectations, the report said. Bridget Roberts called on the agency to implement a more liberal debt repayment policy to encourage taxpayers to file tax returns and pay taxes.
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