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Customer Service at the IRS Is So Bad, Even Tax Pros Are Fed Up

Jan. 4, 2022, 9:00 AM

Tax preparer Jan Roberg rang what she calls the “bat phone”: a dedicated customer service line at the Internal Revenue Service that’s supposed to connect professionals like her to a human right away. She was put on hold, as she figured she would be. So she went to the Burger King next to her office to pick up lunch.

She was still on hold when she got back. “Even five years ago, I would get through right away,” says Roberg, of St. Louis. Now it typically takes more than an hour.

Reaching the IRS has always been an exercise in patience. But years of budget cuts have pushed the agency to the limit. Its customer service workforce has shrunk more than 40% since 2010, according to the most recent data, and the agency is struggling to fill vacancies amid a labor shortage—handcuffed by a federal pay scale that starts college graduates at little more than fast-food wages.

IRS representatives answered fewer than 1 in 10 phone calls during the 2021 tax-filing season, according to National Taxpayer Advocate Erin Collins, who heads an independent arm of the agency designed to help taxpayers resolve problems. Even in off-peak periods the agency is answering only about 4 in 10.

The main role of the IRS is, of course, to collect taxes. But during the Covid-19 pandemic it was also put in charge of doling out billions of dollars in direct checks and advance payments on the child tax credit. The agency received 24.6 million calls related to stimulus payments from when they were authorized in March 2020 to Nov. 28 of that year, according to the IRS’s internal watchdog.

Last season’s call volume was almost four times what it was during the 2018 filing season. During one spike in March 2021, the agency says, it received as many as 1,500 calls per second.

The prospects for this filing season don’t look much better: Many Americans will have to reconcile their child tax credit payments on their 2021 returns, for example, which will likely generate a lot of calls. And not only has the number of calls soared, but it’s also taking employees longer to handle some issues over the phone because of recent tax law changes.

The pressure on the agency prompted President Joe Biden to include call-center changes in a Dec. 13 executive order aimed at improving customer service across a dozen federal departments. He instructed the IRS to give taxpayers the option to schedule customer support callbacks.

In Congress, a provision in the Democrats’ “Build Back Better” package would give the IRS $80 billion in additional funding over the next 10 years. The proposal has top agency officials planning to hire more employees and roll out new technologies.

Just adding funding is unlikely to translate into filled seats at call centers. In Austin, IRS customer service employees make a starting salary of less than $37,000 a year, says Eddie Walker, president of the National Treasury Employees Union Chapter 247 there. The figure reflects a 2.74% raise that just took effect, he says.

“At the starting pay level, we’re competing with the fast-food industry,” Walker says.

The job is “way more involved” than fast food, with high stress and “unreasonable expectations,” says Jason Sisk, president of the NTEU Chapter 97 in Fresno, Calif. “It makes it hard to get up to where [the agency needs] to be and sustain the number of employees that they need.”

Funding for the agency to boost enforcement and hiring has bipartisan support in Congress, improving the chances it will survive if Build Back Better negotiations progress in 2022.

Senator Rob Portman, a Republican from Ohio, says the agency’s customer service improved for a time from the early 2000s. “But then we fell off over successive years because of a lack of commitment to taxpayer service and a lack of funding,” he says.

Maryland Senator Ben Cardin, a Democrat, says ramping up enforcement while simultaneously improving customer service is a challenge. “We’re focused on trying to collect the taxes that are due. There’s as much as a trillion-dollar tax gap every year,” Cardin says. “So it’s a twofold problem.”

A newly opened IRS call center in Puerto Rico employs 400 people, and the agency plans to open more if Congress increases its funding. IRS officials are also planning to roll out changes in existing centers this year, including using natural-language bots to walk taxpayers through frequently asked questions on the phone. The planned changes are designed to drive traffic to the agency’s website, so taxpayers can, for example, set up a payment plan with a robochat rather than a live person, addressing their needs, says Darren Guillot, commissioner of collection for the IRS’s Small Business and Self-Employed Division.

The phone issues are such that some tax professionals are paying for robots to hold their place in line. A startup called EnQ Inc. offers a service, starting at about $100 a month, that makes robocalls to the agency’s special practitioner line (i.e., the bat phone), waits on hold, and then, when it makes a connection, puts the client through to an IRS agent. Andrew Valiente, the founder and chief executive officer of EnQ, declined to comment for this article.

A bipartisan group of senators urged the IRS in November to investigate the company’s practices, saying that by “flooding the IRS lines” with robocalls it may be exacerbating the agency’s poor response rate.

“It doesn’t look that good that you can pay to get heard by the IRS and ‘Joe on the street’ has to wait in line for four hours before they get their ‘courtesy disconnect,’” says Bill Smith, a managing director at the accounting and business services company CBIZ Inc., referring to an agency euphemism for when the overloaded switchboard hangs up on a caller.

More money “would go a long way toward helping that situation,” Smith says of the potential for new resources. “Is it going to happen immediately, even with the funding? I don’t think so.”

Using the IRS website is far more efficient than waiting on the phone, Guillot says. “When you want to reach the IRS, you expect us to answer the phone,” he says. “We know we want to do better, but we only have so many people to answer so many phone calls.”

To contact the authors of this story:
David Hood in Arlington at dhood23@bloomberg.net

Allyson Versprille in Washington at aversprille1@bloomberg.net

Kaustuv Basu in Arlington at kbasu8@bloomberg.net

To contact the editor responsible for this story:
Amanda Kolson Hurley at ahurley21@bloomberg.net

Bernie Kohn

© 2022 Bloomberg L.P. All rights reserved. Used with permission.

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