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IRS Internal Watchdog Explains How the Shutdown Harmed American Taxpayers
New report from consumer advocate service has found the agency endured a rough start to this year's tax season
The Internal Revenue Service (IRS) is struggling to address taxpayer concerns as a result of the recent partial government shutdown, according to the agency’s internal watchdog on Tuesday.
The government was partially shut down for a record number of days recently — and then finally reopened on January 25.
But by that time, the tax season for the year was just about to get underway.
The IRS Taxpayer Advocate Service (TAS) released a report, which found the partial government shutdown has caused significant harm to taxpayers as a result.
“Then came the longest government shutdown in the history of the United States,” TAS leader Nina Olson said in the report.
“On January 28, when my office reopened, it was clear that the IRS baseline had changed. The five weeks could not have come at a worse time for the IRS — facing its first filing season implementing a massive new tax law, with a completely restructured tax form.”
The TAS found that one significant issue was a significant decline in over-the-phone help for taxpayers.
IRS staffers answered only 48 percent of consumer calls seeking help with filing issues during the first week of the tax season on January 28.
The average wait time for the calls that did go through was 17 minutes.
“The IRS is entering the filing season inundated with correspondence, phone calls, and inventories of unresolved prior year audits and identity theft cases,” Olson said. “Make no mistake about it, these numbers translate into real harm to real taxpayers. And they represent increased rework for the IRS downstream, at a time when the IRS is already resource-challenged.”
IRS staffers last year answered 86 percent of calls, with an average wait of four minutes.
The report also found that 93 percent of taxpayers who called to arrange installment tax payments couldn’t reach an assistant during the last week in January. The report described the difference as shocking.
The report also explained that the shutdown worsened troubling trends that were already a problem, such as a multi-year plan to update agency systems.
Additionally, the report noted that taxpayers are now having difficulty navigating the IRS system to pay their taxes. Consumers were unable to reach personnel to resolve their issues or even hold employees accountable.
The partial government shutdown furloughed most of the agency’s employees. The Trump administration worked to make refunds available on time and ordered roughly 60 percent of those employees back to work without pay to handle tax returns and questions.
But less than half of the employees returned to their jobs by the time the partial shutdown had ended, according to The Washington Post.
The U.S. Treasury Department did report good news regarding the filing season, despite all the reported issues. Treasury Secretary Steven Mnuchin said the filing season had successfully launched with millions of tax returns already filed, according to Fox News.
The government, as this week goes on, is also at risk of another partial government shutdown — the deadline to figure out funding is this Friday. The spending proposal that ended the shutdown only funded the government for three weeks.
President Donald Trump and Democratic leaders have been in an ongoing dispute over whether or how to fund a border security wall.
The TAS report also highlighted other issues that were impacting the agency before the partial shutdown even began.
The report noted concern over how the agency has adapted to a major tax reform law from December 2017. The report also shared concern over inadequate funding and computer systems; it cited improved technology as the number-one need.
“The IRS desperately needs to replace its antiquated technology systems,” Olson said. “Last year, the IRS experienced a systems crash on the final day of the tax-filing season, forcing the IRS to extend the filing season by a day. The crash prompted talk of the risk of a catastrophic systems collapse, and that risk does, indeed, exist.”
The report also found the agency lacks a coordinated approach to overseeing professional tax preparers.
In addition to all of this, the IRS is facing a backlog of five million pieces of mail to process. The electronic tax filing program in partnership with 12 private software providers has also declined in recent years.
The TAS is an independent organization within the IRS that helps taxpayers resolve problems while working for systemic change to mitigate future problems.
The group acts as the official advocate for taxpayers, with the mission to ensure that all are treated fairly and that they know and understand their rights.
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