Wednesday, January 06, 2010

Watchdog Warns IRS Is Overburdened

A government watchdog delivered a report to Congress earlier today warning that the IRS is being stretched too thin taking on new duties, and will not be able to serve taxpayers sufficiently this tax season. Among topics of concern were the IRS response rate, and their strategy for collecting owed tax debts.

The IRS's goal of responding to 71% of taxpayer calls in 2010 is "unacceptable," said Nina E. Olson, the National Taxpayer Advocate, in her annual report to Congress.

"In other words, the IRS is planning to be unable to answer about three of every 10 calls it receives," she wrote. Ms. Olson identified the IRS lack of responsiveness to telephone calls as the number-one problem currently facing taxpayers.

She also said the IRS lacks a successful strategy for collecting debts owed. One key problem is that the IRS uses an automated system to file liens against taxpayers, even when there are no assets for the lien to attach to and little chance of collecting the debt, Ms. Olson wrote.

Another problem is a preference for correspondence audits, which can produce more errors than face-to-face exams, she said.

At the root of some of these problems, Ms. Olson said, is that Congress keeps piling duties on the IRS through temporary stimulus programs and new social programs administered through the tax code.

Continue reading at WJS.com…