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This Year Expect Less Help From the IRS

Expect less help from the IRS, agency’s chief says

By Lisa Rein The Washington Post

Posted Nov. 7, 2015 at 10:30 PM

WASHINGTON — Internal Revenue Service Commissioner John Koskinen said this week that taxpayers should expect customer service to “get worse” during the upcoming filing season unless Congress boosts the agency’s budget — worse, that is, than the new low set last year.

“With the budget the Senate and House are proposing, service will get worse if you can imagine that,” Koskinen told hundreds of tax professionals gathered in Washington on Tuesday for a national conference.

He also delivered some grim new statistics to the crowd: After five years of budget cuts, the IRS conducted just 1.2 million individual audits this year, the lowest level in 11 years.

The revenue collected from audits, an important source of income to the federal government and the IRS’s best strategy for ensuring that Americans pay their taxes, also sank to a 13-year low, the commissioner said. From 2005 to 2010, the revenue audits brought in averaged $14.7 billion annually. Since 2010 the number has dropped to $10.5 billion.

“We don’t have enough people anywhere in this agency,” Koskinen said. “We’re losing our effectiveness.” With fewer employees doing compliance work, “you end up leaving tax revenue on the table. In cutting the IRS budget, the government is forgoing billions just to achieve budget savings of a few hundred million dollars.”

Koskinen is on a campaign to turn around five years of budget cuts from Congress, led by House Republicans, that have resulted in $1.2 billion less, or a 17-percent reduction. The agency lost about 15,000 employees during that time, and right now there are no plans to replace most of them.

The House has proposed to slash $838 million more this fiscal year, and the Senate $470 million. Now that Congress has agreed to a two-year budget deal — but not settled on specific budgets for federal agencies — Koskinen is asking Congress for more money to hire and train more seasonal employees to answer taxpayer questions.

But he said he is not optimistic, and there is still a chance that the IRS could see less money than last year.

Service hit a new low during the last filing season, when just 40 percent of calls were answered and taxpayers seeking help in-person waited on long lines outside customer service centers.

The staff hung up on customers calling for help 8.8 million times under a system of “courtesy disconnects,” a euphemism for an overloaded system hanging up on a caller when there’s no one to answer the phone.

Koskinen said the agency could upgrade to a “virtual hold” system common at private sector companies, where callers leave their phone number and get a ring back when an agent is free. But implementing it would cost $48.5 million, he said, making the chances of an upgrade about nil.

The number of audits of individual taxpayers has plummeted by 353,635 since fiscal 2010, new data show, a reduction of 22 percent as the number of revenue agents fell to 10,840 in fiscal 2015 from 13,388 in fiscal 2010. But the number of individual income tax returns grew by 3 percent during the past five years.

Kristen H