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The lingering COVID virus is keeping people out of IRS offices. Yet a buildup of paper from tax returns is compelling tax employees to be there. So even though tax filing deadlines are returning to normal, the IRS is looking at a rough season. That’s among the findings in this years annual report from the Taxpayer Advocate...
The lingering COVID virus is keeping people out of IRS offices. Yet a buildup of paper from tax returns is compelling tax employees to be there. So even though tax filing deadlines are returning to normal, the IRS is looking at a rough season. That’s among the findings in this years annual report from the Taxpayer Advocate Erin Collins, who joined the Federal Drive with Tom Temin to share her insights.
Tom Temin: Ms. Collins, good to have you back.
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Erin Collins: Good morning, Tom. Good to be back.
Tom Temin: It seems like this is a little bit of a déjà vu all over again situation, because everyone may be expected the COVID crisis to be over. But it sounds like for the IRS, a little too soon to say, isn’t it?
Erin Collins: Yeah, it’s been a tough two filing seasons due to COVID. And I am concerned that the upcoming filing season is going to be as challenging.
Tom Temin: And let’s talk about the paper end of this, because they’re still, even though it’s a small percentage of taxpayers, a small percentage of taxpayers is a lot of paper for the IRS. And what does that situation look like as we head toward the filing season?
Erin Collins: Yeah, the filing season kicks off at the end of January. So it’s right around the corner. I say a lot, you know, paper is not the IRS’ friend. And I think even in the report, we use the term that paper is the IRS’ kryptonite, because it is very difficult in a COVID environment where employees are working remotely and we are trying to social distance in a lot of the campuses. It’s difficult for employees to be hands on, so to speak. With paper, you physically have to be touching it and have to be in the office. So with our limitations that we have with respect to our employees, it makes it very difficult for the employees to get their normal jobs done.
Tom Temin: Is there any possibility of someone mailing paper bundles to people so that they can process at home and then mail them back? Or is that just not feasible?
Erin Collins: I have not heard that being discussed. I think there’d be some real concerns on 6103 with respect to improper disclosures. We are very careful of protecting taxpayer data. So I don’t see that as being an option in the near future.
Tom Temin: Yeah, I can’t see the idea of 10,000 tax returns on somebody’s dining room table for the family to take a perusal through. I suppose it would not be a good idea. And do you have any sense of the IRS processing offices, whether anyone is in there? Or just a few people? Or what does it look like, generally?
Erin Collins: No, they do have a staff. I would say that if you look across the agency, the individuals that are in the office are those working the returns. So the campuses, again, you’re going to find the most, the highest number of IRS employees. Other employees have more flexibility if they’re working with a taxpayer or working remotely. But when you’re dealing with the processing of paper, that is something that the campuses are doing, and there’s a higher percentage of employees working in the campus.
Tom Temin: So it’s a little bit better than it was last year at this point with respect to their ability to process the paper.
Erin Collins: Yes, but I hesitate saying that. I think the biggest challenge is I don’t think we’ve been able, as an agency, to hire as many incoming new employees as we would like. So I think that is a concern for the upcoming filing season. You know, we have normal attrition —people retire, people leave the government — and do we have enough employees to handle the workload. And I think that’s a real challenge for those folks that are in the service centers or the campuses processing these returns, because I don’t think we’re able to hire as fast and as many individuals, so it puts the onus on them to get the job done.
Tom Temin: And is that hiring disability a function of the IRS? Or are they just participating in an economy where employees seem hard to hire these days, generally?
Erin Collins: I think it’s a little bit of everything. And that’s one of the things that we address in our annual report that was released on Wednesday. And we do discuss the hiring challenges with respect to IRS employees. And I would think they’re very similar across all federal agencies, as some of the requirements and challenges we have and the time it takes to bring in a new employee. So that is difficult in the hiring piece. But on top of that, as you mentioned, we do have what’s going out across the country, and what are the challenges that people are facing. I think we’re not seeing as many people rushing in to apply for jobs. And that’s very discouraging. But I don’t think that’s just with respect to the IRS. I think it’s across the country, both private and government.
Tom Temin: We’re speaking with Erin Collins. She’s the IRS Tax Payer Advocate. And I want to ask you about telephone service. That’s been kind of a tough issue for the past several years. And it was cited specifically in the presidential executive order on customer experience where one of the goals is for IRS to have automated call back so people aren’t on hold for indefinite periods. What’s the status of the call centers? And what does the IRS prepared to do in this coming season?
Erin Collins: Yeah, this past year was probably had the most historic numbers, the highest volume of incoming calls. Typically the IRS receives around 100 million calls per year; this past year, they had close to 282 million. So in essence, three times the incoming calls. So that has been a huge challenge for the IRS. And as a result, they’ve had the lowest level of service. So about 11% of the taxpayers who called in actually spoke to an IRS employee. So phones this year was very difficult. There were a lot of reasons the taxpayers were calling in — you had new legislation, you had delays and refunds, delays in processing. So the phone lines were ringing. And unfortunately, our customer service representatives just were not able. There were not enough hours in the day, and not enough customer service folks to actually answer those calls.
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Tom Temin: Well, if you have, say, automated callback, if the volume is triple what it normally is, how can you even have automated callback if there’s not enough hours in the day to answer live?
Erin Collins: And you hit the nail right on the head, because that is a challenge. The IRS has started the automatic callback with respect to some of their lines. We’d like to see it and we made a recommendation that it’s across all phone lines, because I think those who’ve been able to have the automatic callback, it’s been very efficient and very much appreciated when you’re on the other side of that call to have the IRS call you back rather than listening to hold or music. But the challenge is, again, it gets back to resources. If they don’t have enough employees to call back. They stop the callback procedure. So only those who get through that could speak to a customer service representative received the callback. So as you pointed out, with a high volume, they can’t do it across the board.
Tom Temin: Yes, because live or calling back, you’re still taking calls serially and therefore you run up against a clock.
Erin Collins: Yep.
Tom Temin: Now to the main processing electronically. I guess the workload is going to be what it is. There’s so many taxpayers and so many returns and business returns in the season. But in past year, the IRS had additional duties caused by COVID relief legislation, and it had some pretty big haystacks of work falling on the IRS during the filing season. Now we’re back to filing at the traditional deadline date. What can the IRS expect for workloads coming up now?
Erin Collins: I think the biggest challenge that the IRS employees will be dealing with, which impacts taxpayers, is the backlog that’s coming over from the past year into the current year. We still have over 6 million original files — returned individual files — that have not been processed. We have over 2 million business returns, we have over 2 million quarterly employment returns, we have over 5 million pieces of paper correspondence. That all needs to be processed. So unfortunately, we’re not starting the new filing season clean — we still have this carryover from the back year. So they will be digging out of that hole as they start the new filing season. I can’t predict what Congress is going to do. On one hand, some of the changes of legislation that they made was very favorable to taxpayers. And I know that IRS agents took pride in being able to issue the stimulus payments, as well as the child tax payments that were made every month. But that is a heavy lift with respect to tax administration. And it did negatively impact the timeliness of the filing season. I
Tom Temin: And I always think of the IRS Taxpayer Advocate as sort of the stern but loving mother of the agency. And on one hand, you’ve got to administer hard truths from a taxpayer standpoint, and deliver bad news to the agency. But on the other hand, you are of the agency and care about it. So from the mom side as opposed to the scolding side, what’s your sense of the state of the IRS as an agency?
Erin Collins: I like to put the two together. I like to think of it as the mom as being realistic, at the same time as delivering the facts. So I think it’s been a very difficult time. I think the IRS is in a crisis in essence, because the challenges that the Congress has placed on the IRS, on top of our current filing season core duties, has really caused problems. And with a reduced budget means you have reduced staffing. And I think for the last 10 years, we’ve gotten to the point that things need to change. And I don’t think anyone within the IRS would agree with that. I think we are trying to make the best of what we have. And again, I think the employees are doing an admirable job. But there’s more on their plate than we can handle.
Tom Temin: I guess one thing mitigating in favor of improvement is the fact that there is some continuity of leadership we’ve had now for several years.
Erin Collins: Yeah, and I think this commissioner is very supportive of its employees. And I think he’s been very vocal on the hill with respect to the needs of the service with respect to funding additional resources. I’m still waiting to see hopefully Congress will agree this upcoming year to increase our annual budget and potentially give us additional funds. But, you know, the IRS at this point, they’re limping along. And it is amazing the job that IRS employees are doing to get as much done without challenges. But at the same time, as you said, you know, part of our obligation is to look at the problems and to make recommendations to the IRS to improve. It’s been difficult for taxpayers. It’s been a really bad filing season for the last two years. And again, we as IRS employees and professionals across the country really need to get the message out as what taxpayers need to do to make sure that the filing season goes as smoothly as possible.
Tom Temin: And of course, underlying everything the IRS does is its information technology. They’ve been struggling to modernize it. And there’s yet another new reset, a new plan for modernization. What’s the outlook for getting their IT just that much more under control in the year ahead?
Erin Collins: Yeah, I’m optimistic of some of their plans. I’m a little pessimistic on the timeframe. I would like to see some changes more quickly that are favorable to both the employees as well as to taxpayers.
Tom Temin: And the individual master file system, is that going to still live on to infinity?
Erin Collins: They’re hoping that they are going to have that updated and changed. I think the goal is that we quickly adapt — and quickly as a relative word — adapt to what we call the enterprise case management, where all of our standalone systems will be linked into one system, which will be a huge benefit to IRS and its employees and to taxpayers. As I said, I would like to see it tomorrow. I don’t think it’s going to happen that quickly. But they are taking steps each day to move towards that goal.
Tom Temin: And something went by quickly, but your new report — your annual report — is out just yesterday, correct?
Erin Collins: Correct. And in the report, we address our perception of the 10 most serious problems impacting taxpayers. And we also talk about the 10 most litigated issues. So I encourage folks to they get an opportunity to go on our website and have a chance to review it
Tom Temin: And we’ll link it at our website, also. Erin Collins is the National Taxpayer Advocate for the IRS. Thanks so much for joining me.
Erin Collins: Thanks so much.