In part one of this post, we noted how recent reductions in funding have diminished the ability of the IRS to deliver first-rate customer service to U.S. taxpayers.
To be sure, virtually all executive branch departments were required to tighten their belts last year as part of a process known as the "sequester." For the IRS, however, the latest cuts continued a trend stretching back several years that has left the agency with far fewer employees than only a few years ago.
In this part of the post, we will discuss some of the ways these staff reductions are impacting the IRS's ability to offer the assistance to taxpayers in complying with tax-filing requirements.
Waiting longer on hold for telephone assistance is only one of the ways that taxpayers are already affected by the IRS's failure to provide the level of customer service it once did.
There are also some more specific cutbacks in service coming this year. For example, the IRS will no longer provide assistance with tax-return preparation for disabled people and the elderly, among others.
Though the IRS will still respond to taxpayer questions, it will do so only if those questions are "basic" questions. Yet with the tax code growing ever-more complex, more and more questions are not exactly basic in nature.
In addition, the IRS will not make human representatives available to respond to even basic questions throughout the year. The human touch-point will be available only through the end of the standard tax-filing season in mid-April. Instead, the IRS will try to steer people to less-expensive, but arguably less effective, automated or Internet resources.
The sad irony is that the cuts to the IRS budget seem to be penny-wise but pound-foolish. Without an appropriate level of resources to support and encourage tax compliance, the federal government may lose more money from the IRS cuts than it saved from the cuts themselves.
Make no mistake: the IRS will still conduct audits. And it will continue to investigate and prosecute tax fraud. But there is more to a well-run tax system than the threat of prosecution. A well-run system also needs sufficient resources to promote voluntary compliance.
Source: NBC News, "Why customer service at the IRS is bad -- and coiuld get worse," Allison Linn, Jan. 19, 2014