The Big, Ugly IRS Disconnect

Every month, I share a tip, strategy, or information that is helpful for those in the tax resolution industry. But this month, I had to share my opinion of how I see it with regard to what’s going on at the IRS and dealing with them. It amazes me how large the disconnect is between what the top IRS brass thinks is happening on the ground versus what’s really going on in the trenches.

The National Taxpayer Advocate, Erin Collins, delivered her annual report to Congress in January, and although the IRS did make some positive moves, most of the challenges she cited in her 2021 report were still at the top of her list in 2024. The biggest issue is taxpayer service or lack thereof. Taxpayers, and their representatives, continue to experience long delays that require employees to process tax returns and respond to taxpayer correspondence.

Yep, the one thing the IRS should be exemplary at is the same thing they just can’t get their arms around, even with an $80 billion war chest. Case in point: There were 500,000 tax identity theft cases pending at the end of (FY) 2023. These cases are taking, on average, 19 months to resolve. Collins called these delays “unconscionable” and urged the IRS to place a higher priority on resolving these quickly. What are the 10,000 newly hired employees doing?

When you read the press releases put out by Danny Werfel, the new IRS commissioner, you’d think you’re living in a different universe. Per the new commissioner, everything is sunshine and rainbows. As recently as a few weeks ago, Mr. Werfel delivered a presentation before the House Oversight and Accountability Committee and said, “The billions of dollars the IRS got as a result of the Inflation Reduction Act are working exactly as intended and that the IRS is dramatically improving its customer service.”

I speak to dozens of our Roz Strategies members every month via one-on-one coaching calls, webinars, teleseminars, and other trainings I do, and all I hear is how inexperienced and untrained the frontline IRS folks are, especially in the Priority Service Line (PPL), the Automated Collection System (ACS), and the Offer in Compromise Unit (OIC). Practitioners, who are retained to help their clients, are frustrated and disillusioned. They’re all wondering: When is it going to get better?

Practitioners are forced to speak to 3-4 agents (sometimes even more) when it should take one try before they get an agent who knows what they’re doing and can help. The smallest issue is taking longer and longer to resolve. It truly is unconscionable. If the IRS were a for-profit, private corporation, I suspect all 50 states’ attorney generals, the CFPB, and the FTC would be suing the IRS for misleading and deceptive advertising and unfair business practices.

I do hope, for the taxpayer’s and practitioner’s sakes, that this is not the new normal at the IRS. But, that’s just how I see it for now.

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