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IRS, taxpayers share a rocky romance

Jim HamillALBUQUERQUE, N.M. — Quick show of hands. How many of you have called the IRS in the last year?

Now leave your hand up if the IRS actually answered the phone. Anyone? Anyone? Anyone? Bueller?

Every year the National Taxpayer Advocate makes a report to Congress. The Advocate advocates for you, for me, for all of us. So she reports on how things are going in our relationship with the IRS. Her conclusion? Our relationship is on the rocks.

There are many sources of our relationship problems. For one, our partner is just not communicating well. He spends more time on the computer than in face-to-face – or even phone – conversation with us.

Sometimes he tries to write us notes, but he doesn’t seem to really try to get his point across. We are left confused and feeling anxious.

We know that he deals with complex issues. But they affect our lives too. And when we ask for help in dealing with these complex things he shrugs and doesn’t respond or just tells us to read his emails to us.

Sometimes when we are expecting something from him, at an important time of the year, he seems to delay or even forget to respond. When we ask why, he says he’s not even sure who we are anymore. Maybe we’re just not who we say we are.

Of course he has issues too. Like Clark Griswold, he waits for that year-end bonus to carry him through the new year. Now there is no bonus.

He used to get raises every year. Now his boss has been cutting his pay. And the boss never says anything positive about him. He can’t even buy an up-to-date computer and software.

This hardly sounds like the formula for a successful relationship. It’s hard to even find a few positive things to use as a foothold to begin climbing out of our morass.

A “criticism sandwich” begins with the compliment, then the criticism, then another compliment. It’s easier to swallow when the nasty middle is surrounded by tasty outsides. But it seems like we’ve just run out of bread.

Too harsh? No, everything I just said is in the Advocate’s report. The IRS is increasingly driving people online to seek answers to tax questions. There are two problems with this. First – access. The Advocate notes that 41 million people have no broadband and 14 million no internet service at all.

The second problem – many people want someone to talk to. Even if it’s the IRS. Some want to be able to meet with an IRS representative in person, others will settle for a phone conversation. But they want human contact.

IRS notices to taxpayers are difficult to understand. Tax professionals usually know what is meant because they have seen many of the same notices and they also have some background in the tax law. But the taxpayer who receives the notice doesn’t understand it.

There is a high false detection rate for identify theft and fraud. If IRS suspects identity theft it will hold up refunds. The taxpayer has to prove they are who they say they are. Fraud may involve fake W2 forms. Suspicion alone will again delay return processing.

IRS budget cuts have reduced Revenue Agent numbers by 31% in eight years. Appeals Officers are down by 34% in the same period. Required improvements to the IT systems are not fully implemented.

The 2017 tax act was a significant one, and it was noteworthy for being rushed through the legislative process. Tax experts cannot agree what many provisions mean or how they operate.

Treasury is behind on many regulatory projects related to the 2017 law, and others that have been issued are hundreds of pages long.

IRS guidance on the website is often in the form of frequently asked questions. Answers to FAQs have no authoritative weight and can be changed by IRS at any time.

If someone is lucky enough to get through to a person on a phone, many IRS personnel are being advised to avoid giving specific answers to questions.

There may be 50 ways to leave your lover, but I’m afraid we’re stuck in this relationship with the IRS.

Jim Hamill is the director of Tax Practice at Reynolds, Hix & Co. in Albuquerque. He can be reached at jimhamill@rhcocpa.com.

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