In the wake of the newly imposed regulations governing paid tax preparers, Nina E. Olson of the office of The National Taxpayer Advocate–an IRS watchdog–issued a report faulting the IRS on collecting delinquent taxes. She called it “…an astonishing lack of transparency as to what is included in these revenue figures and how they are computed,”. After the IRS reported $118 Billion in collected delinquent taxes, the figure turned out to be more like $86 Billion. This 27% difference was essentially buried in the footnote of the report with no explanation for the miscalculation.
Furthermore, the reports specifically addresses other IRS shortcomings including a lack of customer service, excessive use of liens, and criticisms of the new regulations governing paid tax preparers.
Regarding I.R.S. customer service:
The single biggest problem at the agency was getting an I.R.S. representative to pick up the phone when a taxpayer called with questions.
Only six out of 10 callers now get through, after an average waiting time of 12 minutes, compared with eight out of 10 three years ago. The report called the I.R.S.’s customer service — a focus of the agency — “unacceptable.”
Regarding the use of liens increasing nearly FIVE FOLD over the past decade :
The report criticized the I.R.S. for what it called its excessive use of liens, which are claims levied on property or income to secure a taxpayer’s unpaid tax bills. The liens, it said, which are processed by computer, not by people, are increasingly filed against taxpayers with little or no property. In its response, the I.R.S. said that claims filed against property or future income increased the odds that taxpayers would eventually pay their overdue tax bills.
Regarding new paid tax preparer regulations:
The rules do not cover so-called back-room tax preparers — the majority of actual preparers — who fill in the returns and then hand them to a superior for signature
For those that work in the field of income tax preparation, this should come as no surprise. Many of our clients complain to us that it is nearly impossible to get through to the IRS to receive an adequate explanation or answer they are seeking to their particular issue. Collen M. Kelly, president of the National Treasury Employee’s Union states that due to multiple recent temporary tax breaks & amended returns, that “…resources and personnel were diverted from customer service to handle this new workload,” The use of liens & levies by the IRS. has been shocking in recent years, and described as “heavy handed tactics”. And finally, the loophole that would allow many of the “back room” tax preparers to skirt these new regulations is exactly why big firms like H&R Block are happy to endorse them (I will devote a separate post to this).
With continued tough times forecasted ahead and debt spiraling out of control on the federal and state levels one can see why the IRS has implemented these sorts of tactics coupled with inadequate taxpayer support: They are broke. In fact, it has forced the ranking Republican on the Senate Finance Committee, Chuck Grassley of Iowa to state “I fear that the IRS is reverting back to some old habits to the taxpayers’ detriment”.