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Even without the ACA funding, the cuts have been severe. In the government's budget year 2012, the IRS allotted $172 million to training its customer service representatives, according to the IRS Taxpayer Advocate. The IRS now has $22 million to train those same people -- an 87% drop.
At the same time, the IRS lost 8,000 employees between 2010 and 2012, says Edward Jenkins, tax director at CBIZ MHM, an accounting firm in Plymouth Meeting in suburban Philadelphia, Some of that is because of the aging of the IRS workforce, Jenkins says. In the government's fiscal year 2017, 70% of IRS executives and half of nonexecutives will be ready to retire, he says.
And tight budgets mean that it's hard to keep good employees, particularly when they can work for better pay at CPA firms elsewhere. "You're seeing very few pay raises, which makes it not exactly a great place to work," Jenkins says.
Fewer workers and less training mean the IRS is less able to help taxpayers, particularly the elderly and disabled. Ten years ago, according to the IRS, the agency prepared 476,000 tax returns for those taxpayers. It will do none in the 2013 tax filing season, the Advocate's report says. And, says IRS Commissioner Koskinen, "Our employees would be delighted to provide better services. We have town hall meetings where they can ask anything. The common theme is that there are not enough people to get the work done."
Taxpayers looking for answers on tax law will have to look elsewhere, the IRS says. It will only answer basic tax questions this year, and that's assuming taxpayers can get through. Last year, the IRS could only answer questions from 61% of callers, down from 87% ten years earlier. And don't be surprised if you hear recorded messages suggesting you find your answers elsewhere. "You can expect more and more gentle shoves to the IRS web page," says Jenkins.
Automation is a good solution for many taxpayers, Koskinen says. Instead of calling the IRS to find out when their refund is coming, they can now find out online. And this year, you can get your previous filings from the IRS online. "The online system is better than it used to be," Koskinen says. "But you're still going to end up with 15 to 20 million calls unanswered this year."
For some of those callers, the lack of IRS help means getting deeper into trouble. IRS problems typically begin with a letter from the agency, one that is often ominous and difficult to understand. "The letters are not written for civilians," Nemeth says. Taxpayers who can't get the IRS to explain the agency have to call for help from people like Nemeth. "We explain to taxpayers what the IRS is saying, and how angry the IRS is." (continued...)
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