In 2014, for example, former IRS Commissioner John A. Koskinen told me Republican-pushed budget cuts led to an “intolerable level of public service.” That included 15.4 million unanswered taxpayer telephone calls in 2013, according to a Government Accountability Office (GAO) report at the time.
But today, “after a multiyear attack on the IRS budget by conservatives in Congress that gutted the agency’s customer service workforce and frustrated taxpayers with unanswered calls and long hold times, the turnaround has begun,” National Treasury Employees Union President Doreen Greenwald said by email. “The IRS has been restoring its corps of Customer Service Representatives to more normal levels, doubling their number from 10 years ago and improving the level of service.”
The infusion of money and talent allowed Werfel to brag, during a Wednesday interview, that “we are absolutely excited and proud of the momentum that we have, since the Inflation Reduction Act was passed, in driving better performance. And as I’ve said many times, it’s a really good start. There is a lot more work to do.” The 2022 legislation provided the agency almost $80 billion through 2031. Congress later took away $21 billion of that sum, but “the remaining monies still provide the IRS a unique opportunity to significantly improve its delivery of taxpayer services,” said the Taxpayer Advocate Service, an independent IRS office, in its annual report last month.
The agency’s good start and the remaining work to do were detailed by that report and another new one from GAO.
Last week’s GAO audit said the IRS had had a backlog of 6.1 million current year returns in April 2023, but that’s 10.3 million fewer than the year before. Customer service reps answered 65 percent more calls and — importantly — the time to answer fell from almost a half-hour to three minutes. Replies to taxpayer mail, however, remained slow, with 61 percent of the responses considered late after 45 days.
In the annual report to Congress, National Taxpayer Advocate Erin M. Collins, who leads the advocate service, described 2023 as a year “of extraordinary transition for the IRS and therefore for taxpayers. Despair has turned to cautious optimism.”
Her optimism is cautious because the IRS’s notable progress doesn’t erase lingering problems. Werfel addressed those and other issues in an interview with The Washington Post. His answers, edited for clarity and length, are below.
Q: In a separate review of the 2023 filing season, the Taxpayer Advocate Service said because the overwhelming majority filed electronically, “most taxpayers did not experience any issues as the IRS’s overall operations significantly improved.” Yet in her annual report, Collins said despite the dramatic reduction in wait times for telephone assistance, of the minority who called, only 35 percent reached an IRS employee during the filing season and that dropped to 29 percent during the full fiscal year.
A: I actually think that doesn’t accurately reflect the full taxpayer experience and I bring that back to that same taxpayer advocate concluding that most taxpayers did not experience any issue. There could be any number of reasons why taxpayers don’t continue with a call. They might have gotten another phone call. They might have decided to handle things differently. The more it’s well understood by taxpayers around the country that the IRS wait time is down below five minutes, I think fewer people will abandon calls.
We’ve also announced this year a call back option (for IRS staff to call back taxpayers). Hopefully we’re going to achieve an average of five minutes to answer over the course of filing season. But as we get closer to that 15-minute mark, we’re triggering a call back option.
Q: How has the Inflation Reduction Act impacted tax service?
A: I always thought it was critically important that we show immediate progress in our performance that taxpayers could see and feel. That would drive momentum and would provide confidence, that with this new funding, we can put those funds to work to help taxpayers.
It allowed us to hire the right number of customer service reps to answer the phone and to manage the inventory. Having the right number of people means that not only have we been able to dramatically improve our phone service, it’s also allowed us, by the way, to build increased trust. After a phone call is done, we offer a survey that allows us to measure the customer experience. And those numbers are also increasing.
Right now, we have the funds necessary to carry out the improvements that we are driving out over the next few years. I think the ($21 billion) cut in the IRA funding will take its toll if we get beyond the next two years. My hope and my ambition is to make such significant improvements with the IRS that we as an organization will continue on this positive trend and making improvements that benefit taxpayers. Then, the Congress and others won’t go back to a time where the IRS didn’t have the appropriate funding.
Q: How would you rate taxpayer confidence in the IRS today?
A: It’s absolutely critical that taxpayers see and feel a difference, because the Inflation Reduction Act is funding us to do the very basic things we need to do, including hiring the right number of customer service reps, or phone assisters, so we can be ready to help taxpayers when they need us.
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