POLITICS & GOVERNMENT

It doesn’t seem to know which problems most need solving.

By CPA Trendlines Research

The Internal Revenue Service wants to do a better job. It really does. It got an infusion of funds (though it seems some might get taken back), and it’s got a Strategic Operating Plan with objectives for improving the taxpayer experience and modernizing operations.

MORE: Must the IRS Be a Dark Hole? | 10 Tips to the IRS for Beefing Up Staff | Eight Ways the IRS Can Speed Up Processing Tax Returns | IRS Plays Whac-A-Mole with the Phones | Ten IRS Problems That Need Solutions | Treasury IG Sees Progress at IRS | With Fresh Funding, IRS Shows Service Improvements
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And it’s made a lot of progress. But it’s still got wide open spaces to accommodate improvement.
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Taxpayer Advocate calls for more transparency.

By CPA Trendlines Research

The Internal Revenue Service is the one federal agency that touches nearly every American. Yet too often taxpayers and tax preparers find it all but impossible to see what they need to see in that dark and distant entity.

• Many struggle to access information from the IRS.
• Many have difficulty finding clear, timely, dependable guidance.
• Many can’t determine the status of pending issues.

MORE: 10 Tips to the IRS for Beefing Up Staff | Eight Ways the IRS Can Speed Up Processing Tax Returns | IRS Plays Whac-A-Mole with the Phones | Ten IRS Problems That Need Solutions | Treasury IG Sees Progress at IRS | VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep | Tax Pros Are Expanding and Earning More | With Fresh Funding, IRS Shows Service Improvements | How Tax Practitioners Became Cybersecurity Risks | Top Tax Vendors Caught Red-Handed Selling Private Taxpayer Data
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• Many can’t understand IRS correspondence or how to respond to it.
• Many never find an IRS agent who can answer a question authoritatively.
• Many find it impossible to resolve an issue.
• Many, after experiencing any of the above, suffer the stress of confusion and frustration.
• Many end up distrusting the tax system.

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Guess who has the federal government’s worst retention rate for employees under 40?

By CPA Trendlines Research

If you think it’s hard staffing a CPA firm, imagine the challenges at the Internal Revenue Service where

• the pay’s not so good
• laws limit bonuses
• it takes three months to hire an applicant
• federal bureaucracy gums up the process
• the hiring process uses antiquated technology
• only a remote office can authorize many hires

MORE: Eight Ways the IRS Can Speed Up Processing Tax Returns | IRS Plays Whac-A-Mole with the Phones | VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep | How Tax Practitioners Became Cybersecurity Risks
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• the recruitment and retention budgets are austere
• training programs, spaces and equipment are inadequate
• more than 100 full-time positions need to be filled every day
• over half of employees will be eligible to retire within five years

The Taxpayer Advocacy Service says the IRS needs to deal with these problems, and it’s going to take money, effort, technology and legislation to get it done.
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Some of the fixes will require software updates, but some are simpler.

By CPA Trendlines Research

National Taxpayer Advocate Erin M. Collins has determined that delays in the processing of tax returns is one of the most serious problems at the Internal Revenue Service.

Millions of Americans couldn’t agree more.

MORE: IRS Plays Whac-A-Mole with the Phones | Ten IRS Problems That Need Solutions | Treasury IG Sees Progress at IRS | VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep | Tax Pros Are Expanding and Earning More | With Fresh Funding, IRS Shows Service Improvements | How Tax Practitioners Became Cybersecurity Risks | Top Tax Vendors Caught Red-Handed Selling Private Taxpayer Data
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Collins’s 2023 report to Congress is more than a detailed kvetch. It’s also a buffet of solutions – some that the IRS could effect, some that Congress needs to legislate.

She offers several solutions to the problems with processing. Here are the main processing problems and their solutions:
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What, just moving the resources around doesn’t work?

By CPA Trendlines Research

The Internal Revenue Service did a dismal job of answering phone calls in 2021, struggling to pick up the toll-free 1040 phone 11 percent of the time it rang. A year later, that number leaped to a still-dismal 29 percent.

MORE: Ten IRS Problems That Need Solutions | Treasury IG Sees Progress at IRS | VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep | Tax Pros Are Expanding and Earning More | With Fresh Funding, IRS Shows Service Improvements | How Tax Practitioners Became Cybersecurity Risks
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So Janet Yellen did what any Treasury Secretary would do: she gave the IRS a swift kick in the 1040 and committed the Service to answering at least 85 percent of calls in 2023 and cutting wait times in half.

And the IRS’s customer service representatives did it! Yay, right?
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An accountant has had enough of broken promises.

EDITOR’S NOTE: A reader shared with us an open letter sent to the IRS. We removed some capitalization, bold/italic type and extra punctuation, but every word is just as written.

Open letter via priority mail; delivery signature required

The Honorable Daniel Werfel, Commissioner
Internal Revenue Service
1111 Constitution Ave, NW
Washington, DC 20224

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RE: AICPA presentation 11-14-23. Please stop complaining about budgets. Focus on setting priorities, allocating resources, Taxpayer Bill of Rights and the strategic operating plan like the rest of us out here; stop whining and just do your job.
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Backlogs cleared, fraud detected.

By CPA Trendlines Research

The Treasury Inspector General for Tax Administration has issued a report on the 2023 filing season, and it is generally complimentary to the IRS.

MORE: VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep | Tax Pros Are Expanding and Earning More | With Fresh Funding, IRS Shows Service Improvements | How Tax Practitioners Became Cybersecurity Risks | Top Tax Vendors Caught Red-Handed Selling Private Taxpayer Data
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One big accomplishment: by Feb. 2, 2023, the IRS had cleared the entire carryover inventory of unprocessed individual tax returns received in 2022 – a backlog of 447,000 paper returns and 445,000 amended returns.
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