IRS Budget Cuts Plus Tribal Politics Will Make Tax Season A Customer Service Hellscape

As the Washington Post's Lori Montgomery reports, the Internal Revenue Service typically "handles nearly 160 million tax returns each year and more than 100 million phone calls, interacting with more members of the public than any other federal agency." Is there a chance that you might be among those who could find yourself in need of guidance come tax time this year? Because the news, it is not good.

Not that anyone particularly thrills to the prospect of calling up the IRS for assistance, but the agency has, in the not-too-distant past, enjoyed a peak period of decent customer service. As Montgomery notes, as recently as 2004, the IRS was handling "87 percent of calls and taxpayers had to wait on hold only about 2 and a half minutes." By 2009, this had slipped, but not to an unreasonable margin: "In the teeth of the financial crisis ... the IRS was still answering 70 percent of its calls after average wait times of about 9 minutes," reports Montgomery.

Taxpayers will face the worst levels of service in more than a decade from the Internal Revenue Service this filing season, with as few as 43 percent of callers getting through to an agent and then only after waits of 30 minutes or more, according to a report released Wednesday.


In addition to being unable to answer the phone, the IRS will be unable to provide answers to anything but “basic” tax-law questions. After the filing season, it will answer no tax-law questions at all. And the agency has halted its longstanding practice of preparing returns for elderly, disabled and low-income taxpayers.

That's the takeaway from a report from National Taxpayer Advocate Nina E. Olson, presented to Congress. In that report Olson describes the IRS as an agency that's been slowly "crippled by five years of budget cuts," leading to this looming, Comcastian customer service nightmare. Especially harmful was the infamous sequestration, wrought by the misguided Budget Control Act of 2011, which dinged the IRS' budget to the tune of $597 million and led to this gradual degradation in services. President Barack Obama's 2014 budget sought to repair much of this damage by "proposing an increase of $1.2 billion compared to 2014 and returning the agency to roughly its 2010 funding level in nominal (non-inflation-adjusted) terms." But what we ended up with, as a result of the recent Cromnibus monster, was an additional $350 million cut to the agency's budget.

As further noted by Montgomery, one effect of these cuts, beyond the customer service impediments, is a sort of mini revenue death spiral, as degrading the IRS' ability to enforce the law could result in "the government losing $2 billion in taxes that would otherwise have been collected."

It will probably come as no surprise that all of this is destined to become, as the Wall Street Journal's John D. McKinnon reports, "a political battleground, with Democrats blaming the problems on GOP budget cuts, and Republicans pointing to confusion about President Barack Obama’s health-care overhaul." Though, deeper in the piece, we learn that some GOP members of Congress are of two minds on the matter. Apparently, while some believe the agency can and should deliver service successfully by being more cost-effective and innovative, others are just glad to see taxpayers squeezed in this way, purely out of spite:

Republicans contend the IRS can make better use of its funds due to improved technology, but some believe the agency deserves to be squeezed because of its alleged targeting of tea-party groups for scrutiny as they sought tax-exempt status.

Right, let's not forget the long-running psychodrama that is the IRS/Tea Party scandal, and how that plays in the amygdalae of some lawmakers, who -- having not yet managed to pin that scandal on the White House to their satisfaction -- shall now burden taxpayers with the consequences. It seems an odd choice to make, given that so many of those taxpayers voted to ensure a GOP majority. But, (to borrow from Jonathan Chait) as Nelson Muntz might say, "Gotta nuke something!"

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