Refund delayed? Our ability to help may be limited.
As the National Taxpayer Advocate, part of my statutory duties and the duties of the Taxpayer Advocate Service (TAS) are to identify and inform Congress of challenges facing the IRS and taxpayers. In the interest of transparency, I want to discuss challenges taxpayers are facing not only with the IRS but also with TAS. While previous blogs have spoken about the delays taxpayers and practitioners are experiencing with the IRS, it is important to acknowledge taxpayers are experiencing similar delays when contacting TAS.
I am painfully aware that taxpayers are experiencing more delays with the IRS this year than usual. Our advocates have been handling unusually high levels of inventory for the last year. The past two filing seasons have been particularly difficult. On top of dealing with personal, medical, and financial challenges brought on by COVID-19, taxpayers have struggled to get advice and answers from the IRS, and millions of refunds are still pending. The IRS’s level of service on its toll-free telephone lines has been at all-time lows, paper correspondence and paper returns have added other complexities and delays throughout the year, and many taxpayers are still waiting for their returns to be processed or their refunds to be paid. As the IRS has been struggling with these challenges, many taxpayers have appropriately reached out to TAS for assistance.
However, these same challenges have been directly impacting TAS’s ability to help taxpayers get relief. TAS, while independent in structure and thought, is not independent in actions. As an ombuds function, we generally do not have the delegated authority to perform a “fix;” rather, we advocate within the IRS to make the “fix” happen. To close cases, TAS must work with the other business units. TAS’s case advocates typically must issue Operations Assistance Requests (OARs) or Taxpayer Assistance Orders (TAOs) to the IRS business units that advocate for the IRS to take specified actions to resolve cases, including expediting refunds, processing amended or original returns, issuing refunds, resolving identity verification issues, or making other necessary corrections. TAS relies on the same IRS employees as taxpayers to fix most TAS taxpayer problems for us.
There are three principal causes of TAS’s delays in providing prompt taxpayer service:
Due to the high volume of calls and cases we have been receiving, we have struggled to meet our own deadlines and expectations. Our 79 local office telephone lines are receiving over 20,000 calls each week. Our taxpayers have experienced “courtesy disconnects” (the technical term for hang-ups) from our phone system, and on average taxpayers wait 80 minutes – and many have waited on hold longer than that – before reaching an intake advocate. The level of service on our centralized intake line averages around 32 percent, which is unacceptable, especially for a function intended to be the safety net for taxpayers. TAS should be readily accessible for taxpayers who need our services, and we should be providing those services timely. I regret we are not.
Our inventory increase has been driven by several case issues that have exploded over the past year, including an over 252 percent increase in returns rejected as unable to process; an over 88 percent increase in cases involving the processing of original returns; a 130 percent increase in cases involving the processing of amended returns; a nearly 221 percent increase in lost/stolen refund cases; a 141 percent increase in missing/incorrect payment cases; an over 197 percent increase in math error cases; and an almost 109 percent increase in cases involving the Premium Tax Credit. Due to the sharp increase in our inventories and the decrease in case advocates, the current case inventory per case advocate has more than doubled from the second quarter FY 2017 to the second quarter FY 2021.
The news is not all bad. Because of our case advocates’ efforts and dedication, we continue to resolve most TAS case issues, albeit more slowly than usual. And our employees continue to conduct community outreach events and have participated in local and national Advance Child Tax Credit (AdvCTC) events with a continued focus on underserved communities.
Over the past year, we have had to revisit our case acceptance criteria, transfer cases more frequently among offices, increase overtime, and revisit our training and onboarding strategies, all with an eye toward providing more available hours to work taxpayer cases. Due to our high inventory, I made some difficult choices to limit the acceptance of stimulus cases and other issues until the IRS had a process established to work those requests. Continuing to increase our caseload with issues in which the IRS does not have a procedure in place to provide relief was adversely impacting our handling of taxpayer issues TAS was able to assist with. Presently, we are looking at the impact of a permanent AdvCTC next year and revisiting our criteria regarding whether TAS can assist those families facing challenges. And we continue to work with the IRS on systemic recommendations to improve administration of the AdvCTC.
During the past year, we also developed procedures with the campuses utilizing a streamlined process of issuing bulk OARs and bulk TAOs to move cases. We requested and received the authority for our Low Income Taxpayer Clinics to prepare returns to assist taxpayers in receiving stimulus checks and AdvCTC monthly payments. But until the IRS business units can process cases more quickly, our current inventory will continue to move slowly – which directly impacts our timeliness in processing new cases coming in the door and our responsiveness to all taxpayers. TAS was not created to be a second IRS; rather, its mission is to assist taxpayers facing hardship and experiencing IRS systemic issues. This past year, taxpayers have experienced additional challenges at a higher rate than in previous years.
In the meantime, we continue to explore leveraging other TAS resources to help our frontline employees work taxpayer cases. To address our excessive caseload, we are revising every facet of our operations and continually exploring innovating opportunities. I do not wish to change our case acceptance criteria and stop taking certain types of cases, but we need to get our case inventory manageable for both our employees and the taxpayers we serve, and we are considering numerous options. Our mission has been negatively impacted by the unfortunate outcomes of this pandemic, the unanticipated consequences to tax administration, and the daily challenges faced by taxpayers.
Traditionally, TAS opened and closed cases in an average of 74 days. TAS had the ability to focus on and prioritize taxpayers facing financial harm. But with our high inventory, our limited resources, endless cases qualifying for our service, and the lengthy time the IRS business units are taking to implement planned enhancement and process improvements, it is taking many months longer to provide the needed relief. By acknowledging these challenges, I do not want to discourage practitioners or taxpayers. To the contrary, I want to further acknowledge that I and all of TAS continue to advocate for improvements in tax administration, process and procedural changes, and the protection of taxpayer rights. TAS employees are getting the job done, but not as quickly as usual, and unfortunately, taxpayers are paying the price for our high inventory.
Congress created TAS to be the safety net for taxpayers – the voice of taxpayers – to protect their rights and propose recommendations to improve tax administration. Every day, TAS provides service for taxpayers and advocates to improve taxpayer service and protect taxpayer rights. Since joining as the National Taxpayer Advocate in March 2020, I have observed the many challenges taxpayers are facing. I have been inspired by the compassion and desire to do the right thing that our employees have consistently shown, especially during trying times. I want to acknowledge and thank our advocates for their nonstop efforts – it does not go unnoticed. I also want to acknowledge and thank all TAS employees and team members who continue to identify issues and propose solutions to improve tax administration throughout the year on behalf of all taxpayers.
As we work toward reducing our inventory, I do have a request on behalf of our intake and case advocates. When practitioners and taxpayers speak with our advocates, please be courteous and understanding. Our employees are working for you and doing the best they can under the circumstances. They are not responsible for the increase in cases, the reduction in resources, or the pandemic-induced slowness in IRS operations. Like you, they want to resolve issues quickly, and they share some of your frustrations. They know as well as anyone that service levels are not acceptable, and they are trying their best to help, despite these formidable and unforeseen obstacles.
The IRS has been facing numerous challenges since the start of the pandemic that have impacted its ability to timely process our cases. By statute, Congress established TAS as an ombudsman and an advocate. Our employees often do not have the delegated authority to correct errors or implement our recommendations for problem resolution. We depend upon the IRS business units to implement the needed actions. For the past year, our incoming cases have increased, and our case closures are taking longer than in previous years. Until the IRS is able to process our cases or better prioritize them, we will continue to face challenges moving our cases through the system.
As Congress focuses on the IRS’s budget, it should continue to allocate appropriate funds to protect taxpayer rights, including the right to quality service. The IRS’s return processing, audit, and collection procedures should not impose unreasonable burdens on taxpayers. In some instances, taxpayers cannot reach anyone at the IRS to get answers to their questions or to discuss their cases. In other instances, the IRS is simply wrong, and some taxpayers must go to excessive lengths to prove it. Sometimes “default” enforcement actions are taken because taxpayers cannot navigate the process. These are cases TAS was created to resolve. I encourage Congress to provide the IRS with adequate funding to provide high quality taxpayer service, protect taxpayer rights, and ensure taxpayers are treated fairly. As taxpayer challenges continue to increase, I believe it is also critical that Congress and the IRS adequately fund and staff TAS, which serves (or is intended to serve) as the “safety net” for taxpayers who face immediate financial hardship or fall through the cracks of IRS bureaucracy, so we can provide timely assistance.
TAS understands the frustrations and hardships caused by these unprecedented circumstances. Please be patient if you learn your case is not yet processed or be understanding as to why TAS cannot accept your case at this time. Our case advocates are working hard on your behalf. We pledge to continue working with the IRS to identify ways to address our backlog and increased inventory. We will continue to update taxpayers on the delays and progress we make. TAS proudly stands by to serve those in need. Our goal is to improve our response time, completion dates, and ability to assist taxpayers, but we ask for your understanding as we work through our backlog and resume providing the high levels of service that taxpayers deserve.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.