IRS improved customer service this tax season, but too early to celebrate

Despite improvements in customer service this tax season, the Internal Revenue Service faced a tough crowd before the House Ways and Means Committee.

The reason: three members of the committee had recent firsthand experience with tax fraudsters.

Rep. Jim Renacci (R-Ohio) told the committee on Tuesday that he was surprised last May when the IRS reached out to him with questions about his 2014 tax return, mostly because he hadn’t filed it yet. Having filed an extension until October, Renacci called the IRS to get to the bottom of the situation.

“After receiving that IRS notice in May, I immediately called the IRS hoping to swiftly confirm that this was just an IRS error. Unfortunately, there was nothing quick about the call. It took almost two hours, and I didn’t get an answer,” Renacci said.

A week later, the IRS told him that someone had stolen his identity in 2015 and electronically filed a tax return on his behalf. The fraudulent return, however, included several red flags, and the IRS was able to prevent payment.

Meanwhile, Reps. John Lewis (D-Ga.) and Mike Kelly (R-Pa.) told IRS Commissioner John Koskinen they had both received fraudulent communications this filing seasons from individuals claiming to represent the IRS.

Financial watchdogs testifying alongside Koskinen generally gave the IRS a positive review for its rollout of the 2016 tax season.

Jessica Lucas-Judy, the acting director for strategic issues at the Government Accountability Office, said customer service was “generally smooth” this year.

However, both she and Timothy Camus, deputy inspector general for investigations with the Treasury Inspector General for Tax Administration, said the IRS has been struggling to stay ahead fraud prevention and cybersecurity issues.

“TIGTA continues to identify security of taxpayer data and fraudulent claims as major management challenges facing the IRS. Both challenges continue to play a significant role in this year’s tax filing season,” Camus said.

Koskinen told the committee the IRS received more than 4 million tax returns on Tax Day this year, and has already processed 130 million returns — 90 percent of which were processed within the IRS’ 21-day goal.

The improved level of service, he said, had everything to do with the $290 million budget increase Congress gave the IRS this year. Koskinen said $178 million of that sum went to improve customer service, which allowed the IRS to hire more than 1,000 temporary workers to improve the IRS’ flagging helpline phone service.

Koskinen said 70 percent of callers this season were able to connect with a live operator to answer their tax questions, compared to its 37 percent level of service last year.

“Unfortunately, once the seasonal employees are gone and the funding runs out, that number will drop significantly,” Koskinen said, adding that the level of service for the full year will likely be between 47 and 50 percent.

President Barack Obama’s fiscal 2017 budget proposal, he added, would increased the IRS’ budget by $150 million and allow the agency to keep its 70 percent level of service year-round.

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