".. the budget environment of the last five years has brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively", said the The National Taxpayer Advocate Nina Olson referring to the IRS in the 2014 annual report released this week. Here are some hi-lights:
In addition to these service declines, the budget cuts will have a negative financial impact as well. IRS Commissioner John Koskinen outlined how the already strapped agency will absorb the latest cut of $346 Million to their fiscal year 2015 budget. The consequences include fewer audits and case closures. Fewer automated collections system and field collection case closures. A continued hiring freeze which should result in the loss of 1800 employees through attrition during 2015. The resulting reduced enforcement staffing means that the agency will lose at least 2 billion in revenue that otherwise would have been collected.
- The IRS is unlikely to answer even half the telephone calls it receives, and levels of service may average as low as 43%.
- Taxpayers who manage to get through are expected to wait on hold for 30 minutes on average and considerably longer at peak times. I myself have been on hold for over 4 hours in recent weeks.
- The IRS will answer far fewer tax-law questions than in past years. During the upcoming filing season, it will not answer any tax-law questions except "basic" ones. After the filing season, it will not answer any tax-law questions at all, leaving the roughly 15 million taxpayers who file later in the year unable to get answers to their questions by calling or visiting IRS offices.
- Tax return preparation assistance has been eliminated.
In addition to these service declines, the budget cuts will have a negative financial impact as well. IRS Commissioner John Koskinen outlined how the already strapped agency will absorb the latest cut of $346 Million to their fiscal year 2015 budget. The consequences include fewer audits and case closures. Fewer automated collections system and field collection case closures. A continued hiring freeze which should result in the loss of 1800 employees through attrition during 2015. The resulting reduced enforcement staffing means that the agency will lose at least 2 billion in revenue that otherwise would have been collected.
As a result of the reduced service levels, tax and accounting professionals will be more important than ever this year. Lets hope that congress pays attention to the numbers. A $346 Million cut does not seem like a fair trade for a $2 Billion revenue loss.
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