If you thought it was hard to reach someone at the IRS before, it’s about to become nearly impossible. The IRS is moving to widespread automation of customer service, and while increasing automation is often a sign of efficiency, in this case it may well create a boon for tax preparers and a new target for tax scammers and thieves.
Not to mention that sometimes you need to talk to a human being to solve a complicated problem, and the least we can expect for the money we send in every April 15 is a modicum of service.
The IRS is investing millions on a plan to make services for tax payers automated within the next five years according to the National Taxpayer Advocates’ annual report to Congress released this week. The IRS plan would create online accounts for 150 million individual taxpayers and 11 million businesses to field questions and provide services.
The ostensible goal is to provide taxpayers with alternate methods to address their concerns rather than calling the IRS directly or making trips to IRS locations. In essence, as Nina Olson, the National Taxpayer Advocate, says in the report, “… [we have] been left with the distinct impression that the IRS’s ultimate goal is ‘to get out of the business of talking with taxpayers,'…”
Furthermore, given the problems with Healthcare.gov, we wonder if our online dealings, which will require us to divulge intimate details of our financial lives, will be safe.
The IRS has been hushhush on its plan, as CNBC reports:
“I have significant concerns that the IRS is embarking on a path that will unintentionally undermine taxpayer rights rather than enhance them, thereby eroding taxpayer trust further," wrote Nina Olson in her report to Congress.
Olson said she is not against the IRS becoming more technologically savvy. But she is worried that the IRS' is creating a "pay-to-play" system, wherein only people who can afford professional help will receive assistance filing their taxes.
"Congress needs to assert its oversight authority and insist that the IRS come now, sooner not later, to explain the specifics of its future state vision," Olson said.
As for undermining trust in this massive and unaccountable federal agency, that would be a very good thing, especially if it led to actual reforms.
Meanwhile, the Washington Post reports that Olson is concerned of the expanded role for tax preparers and tax software companies in the IRS plan:
Olson says the plan for online accounts will put taxpayers at a huge disadvantage if they are poor and don’t have access to the Internet, feel uncomfortable discussing sensitive financial matters online or need to resolve issues that are not “cookie cutter” questions that can be resolved by talking to a person (or computer) on line.
The plan says “little about reductions in core taxpayer services,” Olson writes. She says that “many taxpayers will find it much harder to resolve their problems and will have to pay third parties to assist them.” The result, she says, will be “frustration and alienation” that may lead over time to more tax cheats.
And it may not curb phone calls. E-filing jumped to 85 percent, yet traffic on IRS customer service lines increased by 59% over the past decade.
The IRS defends its plan saying the agency remains "fully committed to personal service to taxpayers” and is still soliciting feedback from outside parties.
It makes perfect sense to make it easy for taxpayers who want to to go online for answers to tax problems. In the last tax season, taxpayers spent many frustrating hours on hold trying to get their questions answered and many agents reportedly weren’t able to answer anything more than “basic” tax-law questions, likely information that could be posted online. But will online services really be able to answer questions any better? How about both options and dedicated agents who will get you the answers? Better yet, how about a flat tax or fair tax that doesn't require this massive bureaucracy?
And the government does not have such a great record with privacy issues. 150 million personal accounts and 11 million business accounts is a huge amount of data that could turn into a treasure trove for scammers and thieves looking to steal tax refunds or identities of unknowing taxpayers.
Just yesterday, we reported that the IRS sent out an estimated $135 million in fraudulent tax refunds because of errors with their computer systems. And we can’t forget the data breach from last tax season where tens of millions were lost on fraudulent tax refunds.