News & Updates

November 9, 2021
Certified Public Accountants and Consultants
The Future of IRS Service Levels
It isn’t a surprise to know that dealing with the IRS is never a walk in the park. From long hold times while on the phone, to disconnected and unanswered calls, many taxpayers & CPAs alike have expressed their frustration with the current IRS service levels this past tax season. With the 2020 tax year now behind us, many remain wary of what to expect for the upcoming 2021 tax year. 
The Internal Revenue Service is one government institution that remains consistently busy all year round. Since the start of the pandemic, the IRS has had to adjust their entire organization to work remotely due to Covid. Because of this, the IRS began to experience a decline in client service and the backlog of unprocessed tax returns began to grow; not to mention, the phone calls began increasing at rapid levels. The AICPA sends out an annual survey to statistically validate and discuss the issues regarding IRS service levels. The once steadily improving service levels have harshly declined due to numerous factors and have exacerbated heavily since the beginning of the pandemic.
Three main factors of concern that taxpayers and tax professionals alike have experienced are:

  1. the inability to connect with the IRS
  2. lack of IRS response to written communications
  3. and the compression of workload due to the pandemic, laws, and regulations.

Before the October 15th extension deadline, there were approximately over 5 million Form 1040 returns and 4 million business returns that had yet to be processed with an additional 4 million returns that were expected by the extension deadline date. The IRS is hopeful to have them all processed by year-end before the start of a new upcoming tax season. It does not come as a surprise to know that there has always been some level of dissatisfaction when it comes to IRS taxpayer services. In 2018, the dissatisfaction of IRS services levels reached an all-time low, but with the rise of the on-going pandemic, the dissatisfaction of its service levels has reached an all-time high. 
This past filing season had IRS call assistors receiving 1,500 calls a second allowing the IRS to barely answer 2% of all calls. Most of the taxpayers’ calls were regarding tax refunds, stimulus payments, IRS notices received and/or child tax credit payments. Additionally, the service level struggles aren’t just limited to telecommunication. 
What the IRS is doing to improve?

The Tax Exempt and Government Entities Division of the Internal Revenue Service is making plans to improve the institution. Before the pandemic, the IRS lost a lot of staff due to budget cuts, retirement, and attrition. Currently for the next year, they are looking to propose a list of priorities to Congress to gain more funding to work on improving their automation, hiring new employees, and working on benefits for employee retention. Although hiring and training can take anywhere between 12 to 18 weeks for new hires to understand and interpret phone calls, the IRS is hoping that these adjustments can make a difference in customer service performance. Also, the IRS is also looking to modernize and digitalize internal controls to improve efficiency. Negotiations are still underway for Biden’s Build Back Better plan, which was estimated to fund approximately $80 billion to the IRS to improve its processes. Final negotiations regarding the funding have yet to be made. 
How we can help!
 
We at Griffing & Company, P.C. are dedicated to helping our clients in all areas of their financial situation. We are continuously staying up to date with current news to provide you with the latest tax proposals. We are here to help our clients thrive in every way possible. Contact us today to see how we can help you!
GRIFFING & COMPANY, P.C.
One Sugar Creek Center Blvd., Suite 650
Sugar Land, TX 77478
(281) 491-8866 Fax (281) 491-8998