Taxpayer Service Expected to Improve in 2023, IRS Says
The IRS faces "a difficult balancing act with its current resources," Taxpayer Advocate Erin Collins tells lawmakers.
National Taxpayer Advocate Erin Collins told lawmakers in her just-released annual report that she expects taxpayer service to improve in 2023.
“We have begun to see the light at the end of the tunnel,” wrote Collins, the IRS official who serves as the voice of the taxpayer before Congress. “I am just not sure how much further we have to travel before we see sunlight.”
Collins’ 2022 Annual Report to Congress cites three reasons for her optimism:
- The IRS has largely worked through its backlog of unprocessed tax returns, even though it remains challenged with a high volume of suspended returns and correspondence;
- Congress has provided the IRS with significant additional funding to increase its customer service staffing; and
- the benefit of Direct Hire Authority has allowed the IRS to recently hire 4,000 new customer service representatives, and it is seeking to hire 700 additional employees to provide in-person help at its Taxpayer Assistance Centers.
The full House, however, voted late Monday 221-210 on a party-line vote to repeal billions of dollars of IRS funding that Democrats approved last year. In the first vote on legislation with Speaker Kevin McCarthy at the helm, the bill would rescind most of the $80 billion President Joe Biden’s Inflation Reduction Act approved to bolster the agency’s faltering audit program.
Sen. Ron Wyden, D-Ore., said the bill “is going nowhere” in the Senate.
“Now that the speakership is settled, the House is proving that there’s nothing more unifying to Republicans than giving a huge, deficit-exploding handout to wealthy tax cheats,” Wyden said in a statement.
The Inflation Reduction Act (IRA) provided the IRS with funding of nearly $80 billion over the next 10 years to supplement its annual appropriations.
“While the funding earmarked for tax law enforcement has been controversial, the legislation included supplemental funding of $3.2 billion for taxpayer services, including pre-filing assistance and education, filing and account services, and taxpayer advocacy services,” Collins’ report states.
The report continues that $4.8 billion would “enable the IRS to continue modernizing its information technology (IT) systems, including advancement of customer callback and other technology to provide a more personalized customer experience; and $25.3 billion to support taxpayer services and other operations.”
“If spent wisely, this funding will give IRS management the tools it needs to bring U.S. tax administration into the 21st century by enabling it to hire and train the workforce of the future, replace antiquated IT systems, and generally revamp the taxpayer experience based on principles of fair and equitable tax administration,” Collins wrote.
As its stands now, “the IRS will have to perform a difficult balancing act with its current resources and will need to ensure it does not create a new paper backlog in 2023 by reassigning too many Accounts Management employees from processing case inventories to answering the phones,” Collins wrote. “The IRS needs to end the vicious cycle of paper backlogs. As employees are trained and report for duty, I expect we will start to see improvements in service, probably by the middle of 2023.”