A recent Bloomberg article states that the IRS will answer fewer than half the calls it receives this year. Hold times will be 30 minutes or longer. My tax accountant friends and myself are reporting hold times of over 2 hours when the voice announcements says 30 minutes to one hour. The IRS’ ability to respond to written communications about such things as filing errors and penalties is also collapsing. It took one of my clients 24 months for their amended corporate return to be finally fully addressed.
Congress has cut its budget by more than $1 Billion since 2010–its training budget has been cut by 83%; its staff reduced by 12%–all the while such complexities as the Affordable Care Act and Foreign Account Compliance Ace and a $20 Billion surge in identity thefts have all been added to its workload in the same time period. According to Bloomberg, $346 million more in cuts are expected in 2015. These cuts in all likelihood will result in the IRS loosing its most talented staff (great the IRS will be understaffed and by minimally talented individuals). Since $6 of revenue occurs with every dollar spent in the collections arena, one has to question the wisdom of this budget cutting mentality in this area of expense.
What does this mean for you? Well if you are poor, elderly or handicapped, you will receive no help with filing your returns. Additionally, if you have any questions on filling out the all new Affordable Care Act paperwork and penalties now being factored into tax returns, you can expect to be on hold for a very long time—a call that may very well not be answered at all. If you are a tax preparer, enrolled agent or CPA, plan on waiting to call the IRS until you have “banked” several issues into one phone call.
And as for us, since we promise 3 free IRS resolution phone calls per client per year as part of our customer service support, we will likely add another phone line and keep a phone glued to our ear! — Tax Trish