IRS Service Problems, Funding, and Returning to “Normal”

While many have complained about long call wait times and difficulty getting IRS help in the past, the pandemic has exacerbated these service problems for the federal agency. As a result, claims take longer to address, and for taxpayers and practitioners alike, reaching an IRS service representative seems nearly impossible.

Who is to blame for the IRS’s service issues, and what can be done to resolve them? How could adjusting funding to the IRS potentially affect the current status of their operations?

On today’s episode of the Taxgirl podcast, Kelly is joined by Bill Smith to discuss the IRS’s difficulties that have emerged since the pandemic and what to expect going forward. Bill is the Managing Director of the CBIZ MHM’s National Tax Office in Washington, DC. He has more than 40 years of experience in both the public and private sectors. In his current role, he consults nationally on a broad range of tax services, including foreign and domestic transactional tax planning for corporations, partnerships, LLCs, and individuals.

Listen to Kelly and Bill discuss expectations for IRS processes returning to “normal” after the onset of COVID-19:

• What are Bill’s thoughts on the IRS’s current operating procedures for addressing taxpayer questions and concerns? What changes has he noticed since COVID-19 began?
• Are taxpayers aware of the modern-day challenges and delays in communicating with IRS representatives today, or are tax practitioners more aware of the differences in practices between now and pre-pandemic? How does this affect the relationships between tax practitioners and their clients?
• Bill speaks on what he describes as the “ripple effects” of the IRS’s poor operating status. Taxpayers and tax practitioners can’t get the IRS to respond promptly, and the IRS’s reliance on paper requests makes it easy for things to get lost or mixed up. These issues can affect not only taxpayers but their businesses, their relationships with professionals, the practices of tax professionals, and so on. 
• How may the Taxpayer Advocate Service’s office’s recent announcement about not accepting certain cases impact businesses and citizens who would not receive their refunds on time?
• Bill believes the IRS faced significant hardships as it adjusted to remote work. How was their situation different from any other company’s, and to what extent? In what ways did the stimulus payments affect the IRS processes and contribute to their slow processing and service difficulties?
• Kelly and Bill discuss the IRS’s technology as partially to blame for their operational issues. How could the IRS improve its technology to resolve some of these problems? Could the controversy over the IRS’s funding be contributing to its technology and operational issues? 
• How would the proposed amendment to the Build Back Better Act affect the IRS’s processes? If the amendment passes, the IRS would have to explain and implement it. Could this cause adverse effects, considering their current operational status? 
• The IRS finds it easier to handle “lower hanging fruit” items, such as smaller business audits, than more complex tax issues. How would an amendment that caps the salary of the people who can be audited change this trend? Would the amendment impact the IRS’s income, and if so, what would that mean for their future?
• What would Bill consider priorities, or areas of importance to taxpayers, if he were in charge of allocating additional funding to the IRS? Bill explains which areas of the IRS he believes should receive funding to restore normalcy to its processes.

More about Kelly:

Kelly is the creator and host of the Taxgirl podcast series. Kelly is a practicing tax attorney with considerable experience and knowledge. She works with taxpayers like you every day. One of the things she does is help folks out of tax jams and hopefully keep others from getting into them.

You can find out more about Kelly here, and you can follow her on Twitter, Facebook, Instagram, and LinkedIn.

To subscribe to the podcast (it’s free!) using Apple, Spotify, or your favorite listening app, click here.

Links:

Kelly’s Website – Taxgirl
Bill’s Twitter – @BillSmithTax1
Bill’s LinkedIn – Bill Smith
Bill’s Company Profile – CBIZ
Bill and Kelly’s Forbes Article – Forbes