Budget cuts crimp IRS ability to respond to taxpayer calls, commissioner reports

As if his listeners didn’t know, IRS Commissioner John A. Koskinen reminded a March 31 National Press Club luncheon audience that Tax Day – April 15 – will soon be here and it’s time to get their taxes done. But, he said, “if you can’t make the deadline, you can file for a six-month extension.”

Unfortunately, though, they may have trouble getting help from IRS in completing their returns. Funding cuts, he said, has cut the agency’s response rate to telephone calls from taxpayers.

"This year we were forced to substantially to reduce hiring of extra seasonal help,” he said. “As a result, our phone level of service is below 40 percent. That means more than six of every 10 people who call can't get customer service."

Despite this reduced customer-service level, Koskinen described positive steps IRS is taking to serve taxpayers.

Notably, he pointed to the “Taxpayer Bill of Rights” the agency adopted last summer. He called it "a cornerstone document that will provide clearer help to taxpayers.”

The document, he noted, contains "10 fundamental rights that every taxpayer should be aware of -- such as the right to receive quality, the right to pay no more than the correct amount of tax and the right to retain representation when a taxpayer has a disagreement with the Service.”

Making his second appearance at an NPC luncheon, Koskinen said that when he took his IRS job in December 2013 he was surprised to learn that “"more than a third of our employees work in taxpayer service." For example, he said, the agency runs one of the world’s largest customer phone service operations.

In other positives, Koskinen said that so far this year IRS already has processed more than 82 million tax returns from taxpayers “on the way to an expected total of 150 million.” He reported that last year, the agency processed more than $330 billion in refunds. That's more, he observed, "than the GDP of entire nations, such as Chile, Portugal, Ireland and – my own personal favorite, Finland.” (He once lived In Finland.)

Koskinen also called attention to IRS's role in fighting identity-theft. Specially trained IRS employees have helped resolve more than 900,000 of such theft that is tax-related, he said.

Thanks to the improved economy, IRS was able to collect $3.1 trillion in taxes in 2013, he reported, adding that the agency spends less than half the amount to collect a dollar of revenue than do the tax administrations of Germany, France, England, Canada and Australia,

For all its strides, Koskinen conceded there was a time when the IRS was doing some things
it shouldn't. But he emphasized that its employees receive better training today. He said he looks forward to the future, but reminded that the agency’s efforts to improve customer service “will take years to fully implement."

Besides its funding cuts, he mentioned that another challenge to IRS’s future is replacing the experience of its workforce, many of whom are nearing retirement age.