Taxable Talk

No, I’m not talking about my business: feel free to call or write us (but due to a water leak, our office is closed today, Thursday, December 8th–we’ll be in tomorrow).  Rather, I’m talking about calling the IRS and writing the IRS.

Let’s start with calling the IRS.  For tax professionals like me, we use the Practitioner Priority Service (PPS).  When we reach agents from the IRS, they can usually resolve issues, or direct us to the personnel at the IRS who can resolve our issues.  This is good for taxpayers and tax professionals.  Unfortunately, there’s a but in this: “When we reach agents from the IRS….”  The problem is reaching them.

On Tuesday, I had eight matters to resolve with the IRS (four business, four individual).  At 7am I began calling PPS (the service is open from 7am – 7pm local time).  I made 60 phone calls to PPS.  On all of them I received the message, “We’re sorry, but due to high call volume in the topic you’ve chosen we cannot take your call at the present time.  Good bye.”  On some of the calls, I also had to do simple math (add six and eight) or repeat words (a theoretical way to stop automated dialing).  All that did for me was make each call take more time to reach the “We’re sorry” message.  (I alternated attempting to reach the business and individual queues, and was equally unable to reach either.)

I am not alone in being frustrated.  The National Association of Enrolled Agents (NAEA) sent a letter to the IRS and Congress noting our frustration. One excerpt from the letter:

As you can see from the sentiments of enrolled agents across the country, accessing the PPS lines has become nearly impossible for tax professionals to gain the help they need from the IRS. We have received anecdotal evidence that less than one percent of callers can get through the PPS individual line.  [emphasis added]

Once we get through, we’re usually on hold for at least 30 minutes.  Sometimes the IRS will offer a callback option so I don’t have to listen to the IRS hold music for an hour.  I can work on other matters while on hold so I don’t have to charge clients for that time.  Still, the current phone system is untenable in allowing tax professionals to resolve issues.

I will be trying to call the IRS again tomorrow and we’ll see if there’s any improvement.

So, Russ, why not write the IRS letters to resolve matters?  When we write the IRS, it goes into the black hole of correspondence.  First, the average response time when we write the IRS is measured in months (three to six currently), so taxpayers have to wait longer for resolution.  Second, some of the time when we respond by mail the IRS repeats what was said in the original notice, ignoring the response; in those cases, we now have to send another letter to the IRS.  Third, the National Taxpayer Advocate correctly noted the IRS’s Achilles heal is correspondence.  The volume is so large that the IRS does lose items.  With a phone call, we have resolution (hopefully).

Some items must be responded to by mail.  For example, I have two clients who received erroneous “Math Error” notices.  The only way to challenge these notices is to write the IRS a letter.  (In one case, the IRS notice would be correct except for two amended returns that have not been processed.  In the other case, the IRS made the math error and miscalculated the client’s tax owed due to a tax treaty allowing for a favorable tax rate.)  Based on experience, it will be mid-2023 before these clients have resolution on these matters.

The IRS is supposedly based on providing quality service for taxpayers and tax professionals.  I do need to point out that when I reach IRS employees they almost always do provide a high level of service.  Unfortunately, reaching those employees is near impossible today.

Twice a week, on average, I call the IRS’s Practitioner Priority Service. It’s the usual starting place for tax professionals to resolve issues with the IRS. This year, calling the IRS has been an adventure. This is not the IRS’s fault: Covid has played havoc with everyone. But getting through to the IRS for tax professionals has been an adventure: If I call after 9am PST I’m usually greeted by the message, “Due to extremely high call volumes we cannot complete your call at this time; please call back later. Goodbye.”

This morning, I called the IRS to resolve a client’s payment. He made a payment for 2019 taxes–and it shows on the IRS computer system. However, it has not made it to the client’s account; somehow the payment is stuck in limbo. When I called the IRS up I was greeted with something new and improved (really, this isn’t a joke):

We estimate your wait time to be between 15 and 30 minutes.

Rather than waiting on hold, we can call you back when it’s your turn. You will not lose your place in the queue. To receive a callback, press….

After entering my callback number (it does require a direct phone number), I was told I would receive a callback in 20 minutes…and I did! This is a marked improvement, and I’m surprised the IRS hasn’t publicized it.

Additionally, I’ve been told the ability to receive callbacks has been added to the IRS’s Identity Protection Unit. This year, the IRS has sent out 25% more letters requiring individuals to prove their identity while staff has been cut. Getting through to that number has been extremely difficult. Callbacks make the identity verification process a little easier.

All-in-all, kudos to the IRS for adding some technology that helps users.

Back in the 1970s Saturday Night Live had this sketch of Lily Tomlin reprising her role as Ernestine the phone company operator (from Laugh-In):

That’s how I feel about calling the IRS. I have three matters I need to get resolved with the IRS. Today, the response I received when calling the IRS’s Practitioner Priority Service was, “Due to extremely high call volumes that option is not available now. Please try your call again later.” Well, I tried again later. And later. And later still. “We’re sorry, but due to extremely high call volumes that option is not available now. Please try your call again later.”

Meanwhile, we find out today that the IRS has deliberately cut customer service.

During the 2015 tax-filing season, the IRS provided what its own Commissioner described as “abysmal” customer service, blaming skyrocketing wait times for telephone and in-person assistance on agency budget cuts. The IRS even called budget cuts “a tax cut for tax cheats.” But a close review of the agency’s spending shows the IRS deliberately cut $134 million in funding for customer service to pay for other activities. Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filling season. Other spending choices, including prioritizing employee bonuses and union activity on the taxpayer’s dime, used up resources that otherwise could have been used to assist another 10 million taxpayers.

The above quote is from the House Ways and Means Committee majority staff titled “Doing Less with Less: IRS’s Spending Decisions Harm Taxpayers.” There’s not much to add. If I can’t get through I’ll have to write follow-up letters; on one topic it will be my third letter without a response. On another, it’s been over one year without a response.

If anyone thinks the IRS’s budget will be increased for next year, they’re dreaming.

Today I attempted to call the IRS Practitioner Priority Service (PPS). I had an outstanding issue I needed to resolve. I didn’t get through.

I’m used to being on hold for two hours when calling the IRS. Unfortunately, the IRS has cut staff in customer service. When I called today I reached the normal recording, but every time I attempted to obtain help for an individual not in collections (that’s one of the options when calling the PPS) all I got was, “Due to extremely high call volumes that option is not available now. Please try your call again later.” Sigh.

I imagine the regular phone numbers are just as bad. The IRS estimates that only 53% of phone calls will be answered this tax season. (Of course, given that the IRS’s accuracy in answering tax help questions isn’t particularly good, some of the missed calls may be to a taxpayer’s benefit.)

Still, I have to wonder about the IRS’s priorities. First, the IRS eliminated the ability for tax professionals to use e-services to enter Power of Attorney forms; that increased call volume. The IRS has apparently cut staff at the CAF Unit–the unit that processes the POAs that we now must fax in. It’s taking over a week for those POAs to be processed (the IRS “promised” four business days). That’s increased call volume. Adding the complexity of the new property regulations and the Affordable Care Act is making things worse for everyone.

There’s no moral here–this is more of a rant. But it’s a rant with a consequence: If tax professionals can’t get through on the phone to resolve issues, we’re forced to write letters. This causes delays in resolving matters, leading to more phone calls, more letters, and more cost to the IRS. Unless I’m missing something this is the path we’re heading down.

The IRS Practitioner Priority Service (PPS) is a wonderful tool for tax professionals. It allows us an easy way to obtain information on clients, set up installment agreements, and for practitioners to deal with the IRS. This morning I called PPS to order transcripts for a client. During the conversation, the helpful woman informed me that as of this coming Monday, January 27th, PPS will no longer accept requests for transcripts.

Supposedly you will now have to fax the Power of Attorney (IRS Form 2848) to the CAF unit, wait one week for the POA to be entered into the computer system, and then download the transcript from IRS eServices. The woman stated that this new policy is on the IRS website (I couldn’t find it) and that she was told this was going into effect by her supervisor.

I’m hoping the information I received is wrong, but I suspect it isn’t. This new policy is bad for a number of reasons:

– You can no longer use a Tax Information Authorization (IRS Form 8821) to obtain transcripts even though a Form 8821 authorizes a tax professional to receive transcripts and a tax professional is supposed to use Form 8821 when the goal is only to receive a transcript. You cannot order transcripts with an 8821 through eServices.
– It will delay getting taxpayers into compliance with the IRS.
– It will take even longer to resolve issues with the IRS.

In any case, this was a surprise I could have done without.

UPDATE: I asked the NAEA if they knew anything about this. Robert Kerr emailed me back stating he suspects the staffer was misinformed but that he sent it to the National Office for clarification.