Who is a fault for the IRS’s Incredible Incompetence?

Millions of calls from taxpayers to Taxpayer Service never get answered. After spending hours on hold, you might hear a click and then a dial tone. This is the IRS’s ‘curtesy hang-up’ because their computer has calculated they will not get to your call today.

Millions of IRS notices have gone out asking “Where is your 2020 Tax Return?”.  Recently they admitted to more than 8 million unprocessed returns sitting in stacks somewhere. Their computers show nothing filed as a result, and the taxpayers are left with two bad options. One – ignore the notice on the assumption that sooner or later the IRS will get their return processed, or Two – send in another copy and further add to the backlog.

Who is responsible for this incredible mess? Interestingly enough – it’s not the IRS people. It’s Congress.  I recently heard on a podcast by some very credible tax attorneys on just how the IRS budget works. Now bear in mind that the Federal Government spends a lot of time and money on hiring a competent Commissioner to oversee the IRS. However, that person has his or her hands tied behind their back from the get-go. The IRS does not get a lump sum authorization of money to run its operations. Instead, the budget is allocated to various functions. Some for answering phones, some for processing returns, some for audits, etc. If the demand for answers on the phones goes up, the commissioner cannot simply reassign auditors to help with the shift in demand. This is ludicrous. Why bother hiring high-end people to run the joint, if you are not going to give them the authorization to actually do the job?

The latest government budget bumps the IRS share by more than 12 billion dollars. Maybe it will help them get their act together with answering the phones and processing. I don’t think I will take that bet.

Author: Jim Payne

Jim Payne, a Florida Certified Public Accountant (CPA) since 1976, offers candid insights on getting square with the IRS — with the least pain, and at the lowest cost — with (or without) the help of a tax representative. Mr. Payne is a former IRS agent and expert in business profitability, IRS audits, IRS payroll tax, and IRS non-filer issues. As a Tax Representative, his goal is clear: " I will speak on your behalf to all IRS agents, so you never have to, and I'll guide you in executing a strategy to resolve your IRS problem so you can get back to enjoying life."

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