Telephone Service in an Omnichannel Environment – Communicating with the IRS Over the Phone Must Be Made Easier for Taxpayers (Part 1)

Jan. 29th marked the start of the 2018 tax filing season, as the IRS began accepting and processing an estimated 155 million individual tax returns for Tax Year 2017. Taxpayers have between now and April 17, 2018 to file their individual tax returns with the IRS, either online or through the mail, or obtain a filing extension until Oct. 15th. Filing season can be stressful for taxpayers in the best of times, as many have questions about how to properly report their earnings, claim deductions, and comply with their tax obligations. But the combination of the enactment of tax reform and reductions in the scope and accessibility of IRS taxpayer services is likely to ramp up anxiety levels as taxpayers ask the IRS to answer their questions and assist with resolving tax problems, which are core aspects of the right to quality service.

I have previously blogged about the effects of declining taxpayer service levels at Taxpayer Assistance Centers on taxpayers’ ability to receive in-person assistance. In addition, the IRS is increasingly relying on its online resources rather than directly engaging with taxpayers over the phone. This approach fails to meet the needs and preferences of many taxpayers who want more personal forms of communication, especially when discussing complicated and sensitive topics. For example, we know from a recent TAS research study that over half of all taxpayers, or more than 74 million individual taxpayers, do not feel comfortable sharing personal financial information over the internet. We also know that while taxpayers prefer to use the IRS website for relatively simple tasks like obtaining a form or publication, or checking on a refund, they often prefer to call the IRS or visit a Taxpayer Assistance Center (TAC) when obtaining answers to tax law questions or obtaining information about an IRS notice or letter.

Thus, in my 2017 Annual Report to Congress, I identified the IRS’s limited telephone service as one of the 20 Most Serious Problems encountered by taxpayers. The Most Serious Problem discussion highlighted my concerns about advancing one means of communication, namely online services, while neglecting telephone service among others, and recommends that the IRS create an omnichannel taxpayer service environment that ensure all channels of communication are alive, active, and interconnected.

Despite technological advances, telephone calls remain an important way taxpayers chose to contact the IRS. The above-mentioned TAS Service Priorities Project survey, designed to identify the value of different services offered by the IRS to taxpayers, showed that over 20 percent of taxpayers – or about 15 million taxpayers – choose the IRS’s telephone lines as their primary channel of communicating with the IRS. Moreover, many taxpayers use the phone even when it’s not their first choice, as they’ve already tried using online resources but have been unable to resolve their issue or find an answer to a tax question on their own. For example, the IRS’s 2016 Customer Satisfaction Survey results for Accounts Management show that 46 percent of all callers reported using IRS.gov prior to calling its toll-free lines. Over the course of the full fiscal year 2017, the IRS received more than 95 million calls. Last filing season alone, the IRS received over 37 million calls on its Accounts Management (AM) lines, where taxpayers go for help with tax law and account inquiries.

This filing season, the IRS can expect to receive an even higher number of calls given the recent federal tax overhaul. The implementation of major tax reform legislation is always a heavy lift for the IRS. Following the Economic Stimulus Act of 2008, the IRS saw a 125 percent increase in incoming calls on its AM lines from 2007 to 2008, rising from about 67 million in Fiscal Year (FY) 2007 to about 151 million in FY 2008. Similarly, the new changes to the tax code will create a lot of issues for the IRS to work through, and taxpayers will have a lot of questions. The IRS has already witnessed taxpayer confusion about withholding changes, the deductibility of prepaid property taxes, and whether states can allow taxpayers to make charitable contributions in lieu of state and local taxes to claim larger tax deductions than would otherwise be allowed because of the new $10,000 cap on the state and local tax deduction.

Questions about tax reform aren’t just limited to newly enacted provisions. During my recent appearance on CSPAN’s Washington Journal call-in program, taxpayers asked whether the tax treatment of Social Security benefits had changed under the new law, whether the additional deduction for elderly or blind taxpayers has been retained, and whether the standard deduction for home office expenses was repealed. The IRS can expect to receive a significant number of similar questions over the coming year, especially after taxpayers file their 2017 returns and wonder how items will be treated for 2018. Yet since 2014, the IRS has refused to answer any tax law questions on the phone or in the TACs after the last day of the filing season, so after April 17th this year, taxpayers will be out of luck if they want to talk to their government about tax law questions. While I understand IRS budget constraints (probably better than most people), this position is just plain bizarre and inexcusable. I am aware of no other tax administration that refuses to talk to its taxpayers and answer their tax law questions. I don’t expect the IRS to give taxpayer-specific advice, but it must explain the basic outlines of provisions so taxpayers can determine (1) whether provisions apply to them and (2) whether they need to seek professional advice with respect to their specific situation. The IRS’s failure to answer tax-law questions is a violation of two important taxpayer rights – the right to be informed and the right to quality service.

In the Most Serious Problem discussion, I outlined ways the IRS can reduce the effort taxpayers must put forth simply to speak with a telephone assistor. To better serve taxpayers over the phone, the IRS should take advantage of new technology and follow the best practices of call centers in other government agencies and the private sector. For instance, robust routing capabilities or a system like a 311 non-emergency municipal services phone number available in many communities across the United States would connect taxpayers with the right telephone assistor to address their problems at the inception of a call. If no telephone assistors are currently available, taxpayers should be spared the burden of waiting in the calling que for lengthy periods, often ranging between 10 to 30 minutes, and instead be given the option to receive a call back either when the next IRS telephone assistor is available or at another time convenient for the taxpayer. Once a taxpayer connects with a telephone assistor, using information-retention software would allow the assistor to access information conveyed by a taxpayer during prior contacts, thereby relieving the taxpayer of the burden of repeating it.

While more funding and additional telephone assistors are necessary to allow the IRS to answer more calls, prioritizing these changes would make contacting the IRS easier for taxpayers even in an environment where resources are limited. In congressional testimony, I noted that it is particularly important that Congress establish priorities, like the ones described in this blog, for the IRS to meet. Congress has a significant role to play in ensuring that the IRS has adequate resources to do its job and that it allocates those resources wisely.

You can read more about my concerns with the IRS’s inadequate telephone service and my recommendations to improve it following industry best practices in the Most Serious Problem: Telephones – The IRS Needs to Modernize the Way It Serves Taxpayers Over the Telephone, Which Should Become an Essential Part of an Omnichannel Customer Service Environment. Next week, I will discuss in more detail some of our findings about private industry’s approach to omnichannel customer service and the implications of those findings for the IRS.